LI PING CHUN, THE CO ADMINISTRATRIX OF THE ESTATE OF LEUNG FOO SU (OR SHE), THE DECEASED AND ANOTHER v. LIANG TONGHUA

HCA 745/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 745 OF 2011

____________

____________

_______________

J U D G M E N T

_______________

Introduction

1.  This is a dispute about the beneficial ownership of the money in two joint bank accounts (the “BOC account” and the “HSB account”) of the Defendant and the Deceased.  The Defendant was a younger sister of the Deceased.  She withdrew all the money from the joint accounts and deposited to her own bank account a few months before the Deceased’s death. 

2.  The 1^st Plaintiff is the widow of the Deceased, suing as a co-administratrix of the estate of the Deceased.  The 2^nd Plaintiff is the other co-administratrix of the estate of the Deceased who is an old friend of the Deceased’s family. 

3.  It is the case of the Plaintiffs that all the money in the two joint accounts was beneficially owned by the Deceased.  The Defendant was in breach of an express and/or resulting trust in misappropriating the money.

4.  The Deceased’s and the Defendant’s parents were the late Mr Leung Sik Man (“the Father”) and the late Madam Chan Ngan Ping (“the Mother”).  They had altogether seven children.  The Deceased was the second son and the Defendant is the fifth daughter. 

5.  Before the Mother’s death, she maintained a number of fixed deposits in accounts in the joint names of the Mother and the Deceased at the Bank of China (“BOC”) and Hang Seng Bank (“HSB”).  The mandates of those accounts allowed each account holder to withdraw money from the accounts. 

6.  The Mother passed away in the United States (“USA”) on 24^th April 2002.  In the period between 4^th June 2002 and 6^th August 2002, all the money[1] in the joint accounts of the Mother and the Deceased was transferred to the BOC account and the HSB account, which were apparently opened for the purpose of the transfers. 

7.  In or about March 2006, the Deceased suffered his third stroke.  Subsequent to this, in the period between March and June 2006, the Defendant transferred all money in the BOC account and HSB account to her own bank account. 

8.  The Deceased passed away on 8^th June 2008.

The Plaintiffs’ case

9.  It is the Plaintiffs’ case that all the money in the joint accounts of the Mother and the Deceased belonged to the Deceased upon the Mother’s death by virtue of the principle of survivorship.  This also corresponds to the Mother’s intention expressed in a Chinese note (“the Chinese Note”) which was drafted by the Defendant in accordance with the Mother’s instructions. 

10.  On 29^th April 2002, without telling the Deceased about the Mother’s death and the contents of the Chinese Note, the Defendant asked the Deceased to transfer all the money in the joint accounts with the Mother to the newly-opened BOC account and HSB account purportedly on the Mother’s instructions. The Deceased gave instructions to the bank on that day to transfer the money to the HSB account upon the maturity of fixed deposits. 

11.  According to the 1^st Plaintiff, the Defendant had assured the Deceased and 1^st Plaintiff on the same day that all the money held in the BOC account and HSB account was solely belonged to the Deceased and the Defendant was named as a joint account holder simply for administrative convenience and the benefit of the Deceased.  The Defendant acknowledged that she was a mere trustee holding the money for the Deceased.   

12.  In 2008 when the 1^st Plaintiff was applying for probate for administration of the Deceased’s estate, she learnt that the Defendant had transferred all the money in the BOC account and HSB account to her own account as early as in 2006. As the transfers were unauthorized, the Defendant was in breach of trust to the Deceased.

13.  Alternatively, it is the Plaintiffs’ case that the money was transferred to the BOC account and HSB account under the Deceased’s mistaken belief that the transfers were pursuant to the Mother’s instructions.  Further or alternatively, the money was transferred under the undue influence exerted on the Deceased by the Defendant.

The Defendant’s case

14.  The Defendant maintained that the true intention of the Mother was that the money in the joint accounts of the Mother and the Deceased belonged to the Deceased in his lifetime but the ownership will pass to the Defendant upon the Deceased’s death.  

15.  Although the Defendant told the Deceased about the Mother’s death only on 1^st May 2002, she had already shown the Deceased the Chinese Note[2] before they went to open the HSB account on 29^th April 2002. 

16.  The transfers of the money to the BOC account were made separately in June and July 2002, after the Deceased’s return from the United States to attend the funeral of the Mother. The transfers had nothing to do with the Deceased’s ignorance of the Mother’s death.

17.  The Defendant had never made the alleged assurance to the 1^st Plaintiff or the Deceased.  She did not hold the money on trust for the Deceased.

18.  The transfers of the money to the BOC account and HSB account were in accordance with the Deceased’s wish and he intended that the money in the accounts to be belonged to the Defendant upon his death.  It was an inter vivos gift to the Defendant by the Deceased.

Issues

19.  The issues of the present case are purely factual.

20.  The main issue is the intention of the Deceased in transferring all money in the joint accounts with the Mother to the BOC account and HSB account.  Was it a trust created for the benefit of the Deceased?  Or was it an inter vivo gift from the Deceased to the Defendant?

21.  Regarding whether the money was transferred under any mistake and/or undue influence, as I will explain later in this judgment, these complaints are more speculative than substantive in view of the available evidence before me.

Factual background

22.  The following factual background is not much in dispute.

23.  The Father was a respectable professor in Mainland China.  He passed away in Guangzhou in1984. 

24.  The Mother owned a number of landed properties in Mainland China and Hong Kong.  In or about 1965, the Mother purchased three properties situated at the 5^th, 6^th and 7^th floor of 171 Sai Yeung Choi Street, Mong Kok.  (“the Property”)  At that time, the 5^th floor of the Property  (“5^th floor”) was occupied by the family[3] consisting of the Mother, the Deceased, the 3^rd sister (“Hong Wah”), the 5^th brother (“Francis”) and the 6^th sister (“Koon Wah”).  The 6^th and 7^th floors of the Property were rented out.

25.  In 1981, the eldest brother (“Foo Chung”) obtained a “one-way permit” to Hong Kong.  He and his family occupied the 6^th floor of the Property (“6^th floor”). Foo Chung passed away in 2001 leaving his widow (“Ms Lui”) and four children. Ms Lui and her children continued occupying the 6^th floor after Foo Chung’s death.

26.  Hon Wah moved out from the 5^th floor in 1966.  Francis and Koon Wah went to the USA to further their studies in 1970 and 1974.  Thereafter, it left only the Mother and the Deceased living together in the 5^th floor until 2000 when the Mother spent most of her time in the USA[4] since then.

27.  In early 1991, the Deceased married the 1^st Plaintiff in Guangzhou.  They gave birth to 2 daughters and a son respectively in 1992, 1994 and 1997.  Until 2004, the 1^st Plaintiff and the three children were living in Guangzhou while the Deceased was living in Hong Kong in the 5^th floor.

28.  The Defendant and her family immigrated to the USA in 1994.  When the Mother spent her time in the USA, she would stay at the Defendant’s home. 

29.  In or about 1995, the Deceased suffered his first stroke.

30.  On or about 24 January 2002, the Defendant recorded in her own writings on the Chinese Note the Mother’s wish for disposal of her money.  The Mother and the Defendant signed on the Chinese Note.

31.  The Mother died on 24^th April 2002 in the USA.  On or about 25^th April 2002, the Defendant telephoned the 1^st Plaintiff and informed her of the Mother’s death and asked the 1^st Plaintiff to go to Hong Kong.  The Defendant asked the 1^st Plaintiff not to tell the Deceased about the Mother’s death before the Defendant arrived. 

32.  On 29 April 2002, the Defendant and the Deceased went together to the bank to open the HSB account.

33.  In the evening of 1 May 2002, Professor Chan, an old friend of the Leung family, told the Deceased the death of the Mother, in the presence of the Defendant and the 1^st Plaintiff.

34.  In or about May 2002, the Defendant went together with the Deceased to Hong Kong Bank to open the safe deposit box of the Mother, which was in the joint name of the Mother and the Deceased.  The Defendant put the documents contained in the safe deposit box into a sport bag (“the Sport Bag”) she brought along with her.  The Sport Bag was then locked and put inside a wardrobe in the Defendant’s room in the 5^th floor.

35.  On 4 May 2002, the Deceased, the 1^st Plaintiff and the Defendant went to the USA to arrange and attend the Mother’s funeral.

36.  During the time between June and July 2002, the Deceased and the Defendant went to the banks to transfer the money in the joint accounts of the Mother and the Deceased into the BOC account and HSB account.

37.  In or about 2002, the Defendant applied for a letter of administration of the Mother’s estate.  In support of her application, the Defendant filed an affirmation listing out the beneficiaries to the Mother’s estate but Ms Lui and her children were left out from the list.

38.  On or about April 2003, Ms Lui instructed solicitors to file and register a caveat at the probate registry against the Defendant’s probate application.

39.  The Deceased suffered his second stroke in June 2004.  The 1^st Plaintiff and the Deceased’s children came to Hong Kong to live with him thereafter.

40.  In or about March 2006, the Deceased suffered his third stroke.  Thereafter, the Deceased was unable to speak or write.  Francis told the 1^st Plaintiff to lock the wardrobe where the Sport Bag was placed.

41.  Francis came to Hong Kong in May 2006. 

42.  On 19 October 2006, the Sport Bag was opened on the 5^th floor in the presence of all interested parties.  In the Sport Bag, amongst other documents, the Mother’s will made in 1976 (“the 1976 Will”) was discovered.  All the documents the parties considered important were put back to the Sport Bag and taken away by Mr Lo[5], the then solicitors for Francis and the 1^st Plaintiff.

43.  The Sport Bag was opened again on 21 October 2006 at the office of Mr Lo.  Copies of all the documents in the Sport Bag were provided to all parties.

44.  On 7 December 2007, the Defendant’s application for a probate of the Mother’s estate was dismissed.

45.  The Deceased died intestate on 8 June 2008.

Evidence

46.  In this trial, among the siblings, Francis was on the side of the Plaintiffs while Hon Wah and Koon Wah were on the side of the Defendant.  They all gave evidence.

47.  Apart from the Plaintiffs, Madam Leung King Ying (“Madam Leung”), a cousin of the siblings, also gave evidence for the Plaintiffs.  The Defendant’s husband (“Mr So”) gave evidence for the Defendant.

2^nd Plaintiff’s evidence

48.  The 2^nd Plaintiff, Madam Ng, had been a very good friend of the Mother for over 30 years.  She was 86 years old at the time of the trial and also a witness to the Mother’s will made in1998.  Similar to the situation of the Mother, Madam Ng has children migrated to the United States and Hong Kong.  During the Mother’s lifetime, they often travelled together between the Mainland, Hong Kong and the USA.  As such, Madam Ng has been very familiar with the matters of the Mother’s family.

49.  According to Madam Ng, the Mother concerned the Deceased most among her children as the Deceased was less self-sufficient when compared with his siblings.  He could hardly secure any stable job.  In or about 1990, the Mother got worried that the Deceased could not form his own family.  On her initiative and through the help of her relatives in the village, the Deceased was arranged to meet with the 1^st Plaintiff.  They then got married in 1991.

50.  The 1^st Plaintiff and their three children were all born in Guangzhou.  Although they have all successfully applied for a “one-way permit” to entitle them to live in Hong Kong permanently, they continued staying in Guangzhou due to the objection of the Defendant.  In Guangzhou, the 1^st Plaintiff had to take care of the three children and also mend clothes for others to earn a humble income to help support their livings. 

51.  The Mother had told Madam Ng that the Mother always felt sorry about the 1^st Plaintiff having to live a tough life in Guangzhou by herself.  The Mother said she had set aside about one million Hong Kong dollars for the Deceased and his family so that they do not have to worry about their children’s educational expenses in the future.

52.  On 21 October 1998, Madam Ng witnessed a will (“the 1998 Will”) of the Mother.  According to the 1998 Will, the 5^th floor is to be succeeded by Foo Chung and his two sons; the 6^th floor is to be succeeded by the Deceased; the 7^th floor is to be succeeded by Francis; a property in To Kwa Wan is to be succeeded by Hong Wah, the Defendant and Koon Wah; and a property in Sham Shui Po is to be succeeded by Foo Chung, the Deceased, Francis, Hong Wah, the Defendant and Koon Wah.

53.  In or about 2006, when Madam Ng was in the USA, Koon Wah came to her and told her that the Defendant had taken away all the money left by the Mother to the Deceased.  She told her that the Deceased suffered his third stroke and the Deceased’s family needed help.  Koon Wah had told Francis about the Deceased’s family’s situation.

54.  After the Deceased’s death, the 1^st Plaintiff invited Madam Ng to be a co-administratrix of the estate of the Deceased.

Francis’s evidence

55.  Francis is residing in Chicago, the USA.  He is a Professor of Computer Science. 

56.  At the time of the Mother’s purchase of the Property, the Mother signed three Declaration of Trusts in respect of the 5^th floor, 6^th floor and 7^th floor to hold the respective properties for the benefit of Foo Chung, the Deceased and Francis. 

57.  The 7^th floor was all along rented out to generate incomes.  Francis had promised the Mother to give the rental incomes of the 7^th floor to the Deceased’s family.  In 2003, the Defendant convinced Francis to allow Hong Wah to occupy a room in the 7^th floor.  They promised Francis that the rental incomes of the 7^th floor will be provided to the Deceased.

58.  In or about January or February 2006, Koon Wah telephoned Francis from Hong Kong and told him that Hong Wah did not pay the rental incomes of the 7^th floor to the Deceased for long and that the Defendant had hidden the documents from the Mother’s safe deposit box in a locked sport bag.  Francis was very concerned. He telephoned the Defendant and Hong Wah many times to ask for an explanation but they all ended up in quarrels. 

59.  Francis had also telephoned the Deceased to understand what happened but the Deceased said he did not want to trouble Francis on the matters and said he would take care of it by himself.  Francis decided to go to Hong Kong to deal with the matters in the coming summer holiday.

60.  Unfortunately, in or about March 2006, the Deceased suffered his third stroke.  The 1^st Plaintiff told Francis on the phone that the Deceased suffered his third stroke right after he had a telephone conversation with the Defendant asking the Defendant to pay him back his money.  The 1^st Plaintiff told Francis that the Defendant had taken away the Deceased’s money in the joint accounts with the Mother.  Francis thought there might be important documents inside the Sport Bag and asked the 1^st Plaintiff to lock the wardrobe in the room of the 5^th floor where the Sport Bag was placed.

61.  Francis went to Hong Kong immediately after the end of school term in May 2006.  He went to see the Deceased and the Deceased burst into tears when seeing him.  Francis asked the Deceased if it was the case that he suffered stroke right after he had a telephone conversation with the Defendant asking her to pay him back his money.  The Deceased nodded his head.  He asked whether the Defendant had taken away the money left by the Mother to him, the Deceased nodded vigorously.  He asked whether the amount was at least 1 million dollars, the Deceased nodded. He asked whether it was 1.1 million, the Deceased shook his head.  Francis tried other amounts and the Deceased nodded vigorously again when he asked whether it was 1.7 million.

62.  As Francis thought that the Mother might have made a will and suspected that it might be inside the Sport Bag, he requested the Defendant to open the Sport Bag but, despite his numerous requests, the Defendant did not agree.

63.  Francis had also met the Defendant in person several times.  He questioned the Defendant about the Deceased’s money and the Defendant had once agreed to give the money back or set up a foundation for the education of the Deceased’s children.  However, in the end the Defendant refused to return the money saying that the 1^st Plaintiff has no right to succeed the estate of the Leung family as she was not one of them.  Francis and the 1^st Plaintiff then decided to instruct solicitors to protect their interests.

64.  As agreed by Francis, the 1^st Plaintiff, the Defendant and Ms Lui, the Sport Bag was finally opened at the 5^th floor on 19 October 2006 in the presence of Francis, the 1^st Plaintiff, Ms Lui and her son, the Defendant and Mr So, Hong Wah, and the parties’ solicitors and witnesses including Professor Chan.  Inside the Sport Bag, the 1976 Will was found together with other important documents including the title deeds of the Mother’s properties and the relevant Declaration of Trusts.

65.  All parties agreed that the Sport Bag and the important documents inside be brought back by Mr Lo to his office.  Copies of all the documents were provided to all parties on 21 October 2006 at Mr Lo’s office.

66.  It was not until 2009 that Francis discovered that amongst the documents found inside the Sport Bag there existed the Chinese Note which was signed by the Mother and the Defendant.  In particular, paragraph 3 of the Chinese Note stated that :

“Money in the account under [the Mother’s] and [the Deceased’s] names be succeeded by [the Deceased], out of which HK$330,000 be changed to be deposited into the account under the names of [the Deceased] and [the Defendant]. HK$230,000 of the money in the account under [the Mother’s] and [the Deceased’s] names be succeeded by [the Deceased] and [the1^st Plaintiff] together and shall be deposited into the account under the names of [the Deceased] and [the 1^st Plaintiff]. The remaining amount of the money in the account under [the Mother’s] and [the Deceased’s] names shall be deposited into the account under the names of [the Deceased] and [the Defendant], to be succeeded by [the Deceased].”[6]

1^st Plaintiff’s evidence

67.  The 1^st Plaintiff married the Deceased on 25 January 1991.  In 2000 she obtained the “One-way Permit” to go to Hong Kong but due to the objection of the Defendant, she continued staying in Guangzhou with her children.

68.  During the time when the 1^st Plaintiff and her children were living in Guangzhou, the Deceased from time to time came to Guangzhou to see them.  The Mother and Madam Ng also visited them from time to time.  As Madam Ng’s house in Guangzhou was very near to where the 1^st Plaintiff lived, Madam Ng visited them quite often.

69.  In or about 1995, the Deceased suffered his first stroke.  Thereafter, the Deceased had become more financially dependent on the Mother.  The Mother had announced times and again to the Deceased’s brother and sisters that she had set aside a large sum of money for the Deceased’s future livings, and that there was over one million dollars in the joint accounts of the Mother and the Deceased. 

70.  Besides, Francis has agreed to provide the rental incomes of the 7^th floor to the Deceased as his living expenses.  However, since after 2004, Hong Wah ceased paying the Deceased the rental incomes generated by the 7^th floor.

71.  On 25 April 2002, the 1^st Plaintiff received a telephone call from the Defendant who was then in the USA.  The Defendant told her that the Mother passed away in the USA and asked her to go to Hong Kong immediately.  The Defendant told the 1^st Plaintiff not to tell anybody about the news especially the Deceased.  The Defendant said she worried that the Deceased would be unable to cope with it if he learnt about this.  The 1^st Plaintiff agreed.

72.  The 1^st Plaintiff arrived at Hong Kong on 27 April 2002 and the Defendant arrived on 28 April.  Both of them stayed at the 5^th floor with the Deceased.

73.  On or about 29 April 2002, the 1^st Plaintiff, the Defendant and the Deceased went together in the morning to a restaurant for dim sum.  Afterwards the Defendant told the 1^st Plaintiff to go to the market to buy food for dinner and said she would accompany the Deceased home.  Instead, as she was told by the Deceased that night, the Defendant brought the Deceased to the BOC and HSB to transfer all the money in the joint accounts of the Mother and the Deceased to the joint accounts of the Deceased and the Defendant.  The Deceased said the Defendant told him that that was the instructions of the Mother.  The 1^st Plaintiff was very surprised as she heard the Mother said the money in the accounts was for her and the Deceased.  The Deceased then questioned the Defendant about this and the Defendant assured them that :

(a)   Notwithstanding that the accounts are joint accounts of the Defendant and the Deceased, all the money therein belong to the Deceased.  The Defendant will not take any money;

(b)   The Defendant merely wants to help the Deceased manage the accounts; and

(c)   The Defendant merely holds the money on trust for the Deceased.

74.  The Defendant kept all the bank documents including the deposit slips of the fixed deposits accounts. The 1^st Plaintiff and the Deceased trusted the Defendant and thought the Defendant will give them the deposit slips should they find it necessary to use the money in the accounts.  They thought that they must produce the deposit slips to the bank if they want to deal with the money in the accounts.

75.  On 1 May 2002, the 1^st Plaintiff, the Deceased and the Defendant went to the Hong Kong Bank to open the safe deposit box of the Mother.  There were many documents contained in the safe deposit box.  Among the documents, the 1^st Plaintiff noticed an envelope with her name written on it.  Inside the envelope there were 3 pay-in-slips to 3 bank accounts[7] of the BOC.  The total deposited amount was HK$305,000.

76.  The 1^st Plaintiff believed that this HK$305,000 should be the HK$300,000 which the Mother had previously mentioned she had set aside for the 1^st Plaintiff.

77.  The Defendant then put all the documents into the Sport Bag.  When they were back to the 5^th floor the Defendant took the Sport Bag inside her room.  At that time the 1^st Plaintiff and the Deceased believed that all the arrangements were the idea of the Mother and the Defendant would help the Deceased to take care of his financial affairs properly.

78.  In or about June 2004, the Deceased suffered his second stroke and was hospitalized for more than a month.  He was unable to walk properly without aid.  As a result, the Defendant no longer objected to the 1^st Plaintiff and the children staying together with the Deceased.  In July 2004, the 1^st Plaintiff and the children moved into the 5^th floor.

79.  Since their moving in to the 5^th floor, the Defendant came to Hong Kong every 6 months and each time she stayed at the 5^th floor.  The 1^st Plaintiff had seen the Deceased asking the Defendant many times to give him the deposit slips of the bank accounts but the Defendant did not accede to his requests, giving all sort of excuses.  The Defendant promised to provide photocopies of the deposit slips to the Deceased but in the end she did not do it.  Both the Deceased and the 1^st Plaintiff thought that they need to produce the deposit slips to the banks if they want to deal with the bank accounts.

80.  In or about January or February 2006, Koon Wah came to Hong Kong and visited the Deceased.  Koon Wah noticed that the Deceased’s family was not living in a good condition.  She asked the 1^st Plaintiff to let her see the Deceased’s bank statements so that she could teach the 1^st Plaintiff how to manage the money left to the Deceased by the Mother.  The 1^st Plaintiff then told Koon Wah about the Defendant taking the Deceased to transfer money and putting the Mother’s documents into the Sport Bag.  Koon Wah was very surprised and told the 1^st Plaintiff that the Mother had prepared to leave over a million dollars to the Deceased for his livings.  Subsequently, Koon Wah telephoned Francis and told him about what the Defendant did.  Koon Wah also told Madam Ng when she came back to the USA.

81.  On or about 1 March 2006, the Deceased told the 1^st Plaintiff that he scolded the Defendant in a telephone conversation with the Defendant for cheating his money.  The Deceased told the 1^st Plaintiff that the Defendant said it was the 1^st Plaintiff who has withheld the deposit slips from the Deceased.  This made the Deceased very angry and caused him to become very suspicious about the Defendant having misappropriated his money.  On the same day, the Deceased suffered his third stroke.  In a subsequent telephone conversation with Francis, the 1^st Plaintiff told Francis about the above incident.  Francis told the 1^st Plaintiff to lock the wardrobe where the Sport Bag was placed.

82.  In or about the end of May 2006, Francis came to see the Deceased at the 5^th floor.  The 1^st Plaintiff saw Francis asked the Deceased about his money and the Deceased’s responded to him as described in Francis’s evidence under paragraph 63 above.

83.  The 1^st Plaintiff gave similar evidence to Francis’s evidence on how the Sport Bag was opened and the 1976 Will was discovered.

84.  In or about November 2006, the Defendant and Hong Wah instituted legal proceedings in Guangzhou against the 1^st Plaintiff accusing her of misappropriating the rental incomes of a 5-storey building in Guangzhou (“the Guangzhou Property”) which was succeeded jointly by the Leung siblings from the Mother.  It is the 1^st Plaintiff’s evidence that the Defendant and Hong Wah had falsely commenced the proceedings in the name of the Deceased, Francis and Koon Wah without their authorities.  On 14 December 2006, Francis and Koon Wah signed a declaration stating that the Defendant had without their authority instituted legal proceedings in their names and used the Guangzhou Property as security for the litigation.  They also declared that the rental incomes of the Guangzhou Property have been properly accounted for by the 1^st Plaintiff.  The Deceased also signed an “appointment letter” appointing the 1^st Plaintiff to act as his agent to deal with the Guangzhou Property on his behalf and at the same time revoked the authority he has previously given to the Defendant to deal with the same.

85.  Since April 2006, the Defendant had retained all rental incomes generated from the Guangzhou Property.  The 1^st Plaintiff claimed on behalf of the Deceased, Francis and Koon Wah against the Defendant for the rent she received at the Guangzhou court.

86.  On or about 6 January 2007, the 1^st Plaintiff and Ms Lui, accompanied by a solicitor, went to the police station to report that the Defendant had given false information in her affirmation for the application for a probate to administer the Mother’s estate.

87.  After the Deceased passed away, in the course of her application for a probate to administer the Deceased’s estate, the 1^st Plaintiff discovered, through her solicitors, that the money transferred to the BOC account and the HSB account had all been transferred away by the Defendant during the period between March and June 2006.

Madam Leung’s evidence

88.  Madam Leung said the Mother treated her like her own daughter.  She knew that the Mother loved the Deceased most and she always worried about him being unable to support himself and his family.  The Mother told Madam Leung that she had set aside a sum of money for the Deceased to use it for his children’s education expenses.

89.  In or about 2000, the Mother introduced the 1^st Plaintiff to Madam Leung in Hong Kong. She had never heard the Mother saying anything bad about the 1^st Plaintiff.

The Defendant’s evidence

90.  At the time of the trial the Defendant was 66 years old.  Among her siblings, she was the one who took care of the parents most.  In Guangzhou, she took care of the Father; and in the USA, she took care of the Mother.

91.  The Guangzhou Property was originally purchased by the Defendant’s grandfather in 1947.  It was however confiscated by the government in 1952.  In 1982, the Father started to campaign to the government to return the Guangzhou Property to him but at the time when the Father died in 1984, it was still in vain. 

92.  In the period between 1984 and 1987, the Defendant had been vigilant in pursuing the Father’s quest. With her hard work the Guangzhou Property was finally returned to the Mother in October 1987.  At that time it was a 4-storey building.  In 1996, the Defendant had successfully sought permissions to build one more storey onto the building.

93.  Under the Father’s will, there is a paragraph saying that, as the Defendant had taken care of the Father for over 20 years, the Father’s savings in his bank accounts in Guangzhou and Hong Kong shall be succeeded by the Defendant.  At the time when the Father died the Defendant was still living in Guangzhou, the money succeeded by the Defendant from the Father had to be deposited into the joint accounts of the Mother and the Deceased at Hang Seng Bank.  The amounts of the deposits were respectively USD18,804.88 and USD7,024.02.

94.  In 2001, the Mother told Hong Wah that her money in the joint account with the Deceased shall be transferred to the joint accounts of the Deceased and the Defendant.  The money shall be belonged to the Deceased when he is alive but the money will be belonged to the Defendant if the Deceased died.

95.  On 24 January 2002, in a hospital in the USA where the Mother was admitted to, the Defendant recorded the Mother’s wish on the Chinese Note.  The Mother mentioned two deposits in the Chinese Note.  The amount of USD36,943.61 is reserved to pay for the funeral expenses of the Mother and the amount of USD14,076.35 is to be succeeded together by the Defendant and Hong Wah.

96.  The Defendant asked the Mother if there is any money in the US dollars accounts left to the Deceased and the Mother answered “no”.

97.  In relation to the money in the Hong Kong dollars accounts, it was the intention of the Mother that the money is to be deposited to the joint accounts of the Defendant and the Deceased.  The money shall be belonged to the Deceased when he is alive but it will be belonged to the Defendant if the Deceased died.  The Mother also asked the Defendant to take out the money once the health of the deceased deteriorated.  The Mother said she had the money only because of the Defendant’s effort to take back the Guangzhou Property for the family.  She wanted the Defendant to have the money.

98.  The reason why the Mother had such an arrangement was that the Mother did not like and did not trust the 1^st Plaintiff.  The 1^st Plaintiff had misappropriated the rent she received on behalf of the family for the family’s properties in the Mainland.  The Mother had asked the 1^st Plaintiff to return the money but the 1^st Plaintiff refused.  Therefore, the Mother did not want to leave any money to the 1^st Plaintiff.  The Mother had also warned the Deceased not to trust the 1^st Plaintiff on money matters and as a result the Deceased did not tell the 1^st Plaintiff about the money in the joint accounts and did not use any of the money for the 1^st Plaintiff in his life.

99.  Under the Chinese Note, the Mother had left two hundred odd thousand dollars for the Deceased and his children and the money is to be held jointly by the Deceased and the 1^st Plaintiff.  However, the Deceased did not want the 1^st Plaintiff to know about this.  He wanted to give the money to the Defendant.

100.  The Mother died on 24 April 2002 but the Defendant and the other siblings agreed not to tell the Deceased about the Mother’s death immediately.  They worried about the impact on the Deceased will be too great as the Deceased had the closest relationship with the Mother among all siblings.  The Defendant decided to invite Professor Chan to tell the Deceased the sad news when the Deceased is accompanied by others.

101.  On 29 April 2002, the Defendant went together with the Deceased to HSB to open a joint account.  She had shown the Deceased the Chinese Note before that and the Deceased knew full well that the money in the Mother’s account belonged to the Defendant. However, as the fixed deposits had not matured yet, no transfer was done on that day.  As the common intention was that the Defendant can withdraw money from the joint account anytime at her own will, it was mandated that either account holder can withdraw money from the account.

102.  On 4 May 2002, they went back to the USA to attend the funeral of the Mother.  The Defendant showed the Chinese Note to all siblings and told them the Mother’s intention.

103.  In accordance with the Mother’s intention, in the period between June and July 2002, the Deceased brought the Defendant to the BOC and HSB to transfer money to the BOC account and HSB account.  As all the money was originally fixed deposits, they have to wait until the different maturity dates to go for transfers.  The money transferred to the BOC account was on 3 months’ fixed deposit and therefore, deposit slips of the account would be sent to the Deceased’s address in an interval of three months.  There is no question of the Defendant keeping all deposit slips from the Deceased and the Deceased knew full well that he can withdraw money at any time in his own name.

104.  According to the Defendant, the Deceased had told her many times that she should withdraw the money immediately if his condition of health got worse.  The Deceased knew that the 1^st Plaintiff had misappropriated the rental incomes of the family and he felt very guilty about that.  This was the reason why he did not use any money left to him by the Mother and decided to give all the money to the Defendant.  The Deceased did not have to worry about his children’s livings as the 1^st Plaintiff had control of a lot of money from the rental incomes.

105.  The Deceased suffered his third stroke on 1 March 2006.  On that day the 1^st Plaintiff was out from home all day leaving the Deceased alone with one of the children. This caused the Deceased missed the golden time for treatment. 

106.  In or about mid-March 2006, the Defendant came to Hong Kong to look after the Deceased.  The Deceased at that time had still a clear mind and he asked the Defendant to withdraw the money.  In June 2006, the Defendant withdrew all the money from the accounts as she was told by the Deceased.

107.  Regarding the documents retrieved from the Mother’s safe deposit box, she went to the bank together with the Deceased after the pronouncement of the Mother’s death by Professor Chan and before the departure to US for the funeral.  She put the documents into the Sport Bag in order to bring the documents for inspection by solicitors.  She and Hong Wah had looked at the documents at the solicitors’ office in the presence of a solicitor.  However, they did not notice any will of the Mother.  At the time when the Defendant applied for a probate to administer the Mother’s estate, she mistakenly believed that, as Foo Chung had predeceased the Mother, she did not have to mention Ms Lui and her children in the affirmation in support.  She had later rectified the mistake by another affirmation. 

108.  Since after the 1^st Plaintiff came to settle down in Hong Kong in 2004, the Defendant and the Deceased had been asking the 1^st Plaintiff to account for the rental incomes she received.  But the 1^st Plaintiff did not accede to their requests. 

109.  In 2005, the Deceased asked the Defendant to help him prepare a will and the Defendant recorded the Deceased’s wish in her personal notebook.  However, the 1^st Plaintiff secretly read the Defendant’s notebook and photocopied the relevant pages.  The 1^st Plaintiff then accused the Defendant of misappropriating the Deceased’s money before Koon Wah that triggered the unfortunate disputes among the family members.

Hong Wah’s evidence

110.  Hong Wah is a retired principal of a primary school.  She gave evidence that on or about 4 June 2002, the Deceased told her and the Defendant that should the Deceased encounter any misfortune, the Defendant must at once withdraw the nine hundred and twenty odd thousand dollars from the BOC account. 

111.  Hong Wah gave similar evidence as the Defendant in relation to the money in the HSB account.  She said the 1^st Plaintiff had planned to snatch the money left by their ancestors from the Leung family.

112.  Hong Wah said the Defendant contributed a lot to the Leung family.  With her hard work the Defendant claimed back from the Chinese Government the Guangzhou Property.  The Defendant also spent immense effort and vast amount of money in litigations to vacate the occupiers from the Guangzhou Property after it was returned.  The Defendant even allowed the Deceased to use her own unit in the Guangzhou Property as his matrimonial home. 

113.  On the other hand, the 1^st Plaintiff enjoyed all benefits from the Leung family without any giving.  The Mother treated her especially well but the 1^st Plaintiff did not listen to her. 

114.  Hong Wah basically corroborated the Defendant’s evidence without giving many particulars.

Koon Wah’s evidence

115.  In her evidence, Koon Wah praised the Defendant as the person contributed most to the Leung family. Without the Defendant, the Leung family would not be successful in claiming back the Guangzhou Property and the Leung family would not have such amount of savings. 

116.  According to Koon Wah, on a day in 2006, at the 5^th floor she confronted the 1^st Plaintiff about her keeping of the rental incomes of the Guangzhou Property.  The 1^st Plaintiff admitted to her that she had kept the money and that a relative taught her to do this.  The 1^st Plaintiff asked Hong Wah not to disclose the name of the relative.

Mr So’s evidence

117.  Mr So reiterated the 1^st Plaintiff’s misdeed of misappropriating the rental income of the Guangzhou Property.  He said the 1^st Plaintiff was unwilling to go to Hong Kong to take care of the Mother and the Deceased until the Deceased suffered a stroke.

118.  Mr So said the 1^st Plaintiff changed the lock of the 5^th floor to block away the Defendant from the Deceased.  She also allowed her children to occupy the Defendant’s room in the 5^th floor.  Moreover, the 1^st Plaintiff also gave instructions to the elderly home not to allow the Defendant to visit the Deceased when the Deceased was staying there.

Discussion

119.  Having considered the evidence, I find Madam Ng, Francis and Madam Leung are honest and credible witnesses.  On the contrary, I am not satisfied that the 1^st Plaintiff and the Defendant are honest witnesses. Regarding Hong Wah, Koon Wah and Mr So, I do not think they have told the whole truth to the court.

120.  Madam Ng was an old friend of the Mother and has no personal interest whatsoever in the present proceedings or any other disputes between members of the Leung family.  There is no reason to doubt her evidence,  in particular, her evidence about the Mother’s feeling towards the 1^st Plaintiff and that the Mother had set aside more than a million dollars for the Deceased’s family. 

121.  The evidence of Madam Ng is consistent with the evidence of Madam Leung who has also no personal interest in the present proceedings. 

122.  The evidence of the Defendant and Hong Wah about the relationship between the Mother and the 1^st Plaintiff is contradictory to the evidence of Madam Ng and Madam Leung.

123.  Francis impressed me as a forthcoming witness who always gives straight forward answers in the witness box.  He has no direct interest in the subject matter of the present proceedings.  Although he has a dispute with the Defendant and Hong Wah about their occupation of the 7^th floor, I do not think this will lead him to furnish false evidence to the court.

124.  I have no reason to believe Francis would fabricate the whole incident about his questioning of the Deceased as to whether the Defendant has taken his money and whether he suffered stroke after he had quarreled with the Defendant on the phone.  It happened in May 2006 and according to the Defendant’s evidence[8], the Deceased had a clear mind in mid-March 2006.  There is no reason to suggest any misunderstandings existed in the communications between Francis and the Deceased.

125.  Although a medical report dated 22 May 2008 recorded that the Deceased was admitted to a hospital in May 2006 and was diagnosed to be suffering from dementia, that was the first record of the Deceased suffering from the decease and there is no evidence to suggest that a person started to be suffering from dementia would be incapable of communicating in a way as described by Francis.

126.  The responses of the Deceased to Francis’s questions are wholly inconsistent with the Defendant’s evidence that the Deceased willingly gifted to her the money in the joint accounts and asked her to withdraw the money after he suffered from the third stroke.

127.  Mr Kwong, counsel for the Defendant, queried the credibility of Francis by saying that he did not disclose anywhere before his oral testimony he has withheld an investment sum of USD80,000 from the Deceased.  In my view, there was simply too little information before the court to draw any conclusion on this matter against Francis.  I do not think it is sufficient to cast doubt on Francis’s evidence on the whole.

128.  On the other hand, many aspects of the Defendant’s evidence are inherently improbable. 

129.  First of all, as submitted by Ms Ling, counsel for the Plaintiffs, it would be very unusual that the Deceased would give away all his money to the Defendant instead of saving the money for the benefits of his three small children, knowing that the Defendant was herself not without means.

130.  Secondly, the whole idea that the money in the BOC and HSB accounts belonged to the Deceased when he is alive but belonged to the Defendant after the Deceased death can make little sense.  With such an arrangement, it would be entirely up to the Deceased whether to leave any money to the Defendant by not using up or giving away all the money in his life time, which he would be perfectly entitled to do.  There would be no safeguard of any money left to the Defendant which was inconsistent with the Defendant’s evidence that the Mother wanted the Defendant to have the money.

131.  Besides, such an arrangement does not conform to the plain meaning of the Mother’s intention recorded in the Chinese Note that the money be “succeeded” by the Deceased.  It was not mentioned anywhere in the Chinese Note that the money was to be “succeeded” by the Defendant.  The Defendant’s explanation in her oral evidence that the Chinese Note does not record accurately the Mother’s wish is simply incredible in that it was herself who heard directly from the Mother and written it down on the Chinese Note.

132.  The Defendant changed her evidence in cross-examination to a new proposition that both the Mother and the Deceased intended that the money belonged jointly to the Defendant and the Deceased.  Quite apart from it being a new proposition coming up late without explanation, it is still inconsistent with what was written on the Chinese Note.

133.  Thirdly, the Defendant’s explanation as to why she has to transfer the money out from the joint accounts to her own account is unconvincing.  There is no reason why the Deceased would tell the Defendant to withdraw the money if his condition of health gone worse.  The 1^st Plaintiff was not a signatory to the BOC and HSB accounts and she could do nothing about the money.  If the Deceased’s distrust against the 1^st Plaintiff was to such an extent that the 1^st Plaintiff would force him in an inappropriate way to take out the money for her, and the Deceased really had the intention to gift the money to the Defendant, there is no reason why the Deceased would not simply ask the Defendant to transfer all the money to herself right away but to wait until his health gone worse.

134.  As submitted by Ms Ling, the Defendant had at many times changed her evidence or even her case to try to explain away inconsistencies and contemporaneous documents.  Examples include:

(a)   Her original case in her Defence was that she denied going to the banks with the Deceased on 29 April 2002 and requested the Plaintiffs to produce proof.   However, upon seeing the HSB account application form dated the same date with her signature on it, she changed her case to having gone to the HSB with the Deceased on 29 April 2002.

(b)   Her original case in her Defence was that she did notgo to the banks to transfer the money to the BOC and HSB accounts prior to telling the Deceased about the Mother’s death.   However, upon seeing the said HSB account application form she changed her case.

(c)   In relation to the Mother’s probate, the Defendant’s original explanation in her witness statement as to excluding Ms Lui and her children was that she thought she did not have to mention them. However, in order to explain away her own notes on being advised by lawyers that Ms Lui and her children had an interest in the Mother’s estate, she changed her evidence and blamed it on another lawyer[9] in telling her that they did not have any interest, which is stated nowhere in her witness statement.

135.  As submitted by Ms Ling, there are many other aspects in the Defendant’s evidence which are unclear, unbelievable, unreliable and/or illogical.  Examples include:

(a)   She said that despite the Mother intended that one of the Mother’s properties in Hong Kong[10] belong to her solely but, for the sake of showing the Mother that the siblings had good relationship with each others, she put down in the Chinese Note that the property was to be inherited by the siblings jointly.

(b)   She said the 1^st Plaintiff refused to come to Hong Kong because she did not want to take care of the Mother and the Deceased. This is inconsistent with the fact that the 1^st Plaintiff came to Hong Kong immediately after the Deceased had his second stroke.  The Defendant admitted that one of the reasons why the 1^st Plaintiff moved to Hong Kong was because of the Deceased’s illness.

(c)   She can hear the Deceased crying at the 5^th floor despite the fact that she was then at the 7^th floor.

(d)   Her evidence in cross-examination, which appears nowhere in her witness statement, that she went to HSB together with the Deceased to withdraw money for the Mother’s funeral on 29 April 2002, despite that she was hiding from the Deceased about the Mother’s death at that time.

(e)   Her evidence that she was not jealous of her brothers even though the Mother favoured her sons more than her daughters was flatly contradicted with the letter she wrote to, inter alia, the Mother and the Deceased, in which she complained about the same.

136.  In my view, the Defendant is not an honest witness and her evidence shall not be relied upon.

137.  Regarding the 1^st Plaintiff, there are certain areas in her evidence which I am uncomfortable with that made me reluctant to rely on her evidence completely. 

138.  As submitted by Mr Kwong, the 1^st Plaintiff admitted in court for the first time that she had secretly photocopied the Defendant’s notebook.  This piece of document is relevant to the present proceedings and should have been disclosed much earlier.  There is no reason to explain the late disclosure. In cross-examination, the 1^st Plaintiff initially said that she photocopied the notebook out of curiosity but later admitted that that was because she thought it may be relevant to the arrangement of her husband’s estate.  Besides, no explanation was given by the 1^st Plaintiff as to why she did not ask the Deceased about the matters recorded on the notebook.

139.  It was the 1^st Plaintiff’s evidence that the visit to the Hong Kong Bank to open the safe deposit box was on the same day as Professor Chan informed the Deceased of the Mother’s death. However, 1 May 2002, the day on which the Deceased was told the sad news, was a public holiday in Hong Kong and all banks were not open on that day.  Besides, the description of how she copied the account numbers of the 3 bank deposit slips in split seconds is simply incredible.

140.  I am not satisfied that the 1^st Plaintiff is an honest witness.  Her evidence cannot be relied on alone without other corroborative evidence.

141.  The alleged assurance given by the Defendant on 29 April 2002 can only be proved by relying on the 1^st Plaintiff’s evidence alone.  I am not satisfied that it did happen.  In any case, the suggestion that the Defendant would assure that she was holding the money on trust is incredible in that it would be improbable that the Defendant or any of them had a proper understanding of the concept of a trust relation in law.

142.  The evidence of Hong Wah and Koon Wah as set out in their witness statements is vague and lack of particulars.  There are also inconsistencies in their witness statements with their oral testimonies.  I do not find their evidence useful for resolving the present dispute.

143.  As regards Mr So’s evidence, it is more or less a repetition of the Defendant’s evidence and originated from the Defendant.  I do not find his evidence of any assistance.

Conclusion

144.  The followings are my findings of essential facts:

(a)   The Mother had a number of joint accounts with the Deceased in Hong Kong dollars and in US dollars in the BOC and the HSB;

(b)   The Mother intended to let the Deceased succeed all the money in their joint accounts out of the Mother’s affection to the Deceased, the 1^st Plaintiff and their children;

(c)   It was the intention of the Mother that the money in their joint accounts was jointly owned by the Mother and the Deceased in that all the money will be owned by the Deceased upon the Mother’s death by virtue of the principle of survivorship;

(d)   The Chinese Note recorded the true intention of the Mother;

(e)   As recorded in the Chinese Note, it was the intention of the Mother to open joint accounts in the names of the Deceased and the Defendant to manage the Deceased’s money.  The purpose of naming the Defendant as one of the account holders was merely to allow the Defendant to assist the Deceased in managing his money;

(f)   The Deceased and the Defendant opened the BOC account and the HSB account to implement the Mother’s intention under para (e) above;

(g)   The Deceased and the Defendant transferred the money in the joint accounts of the Mother and the Deceased to the BOC account and the HSB account to implement the Mother’s intention under para (e) above;

(h)   The Defendant has no beneficial interest in the money transferred to the BOC and HSB accounts.  As a signatory of the joint accounts, she held the money on trust for the Deceased;

(i)   The Deceased has at any time no intention to gift away any part of the money to the Defendant;

(j)   The relationship between the 1^st Plaintiff and the Defendant later turned sour, possibly because of  their disputes in relation to the rental incomes of the Guangzhou Property and/or the Defendant’s administration of the Mother’s estate;

(k)   The Defendant was unwilling to share the assets of the Leung family to the 1^st Plaintiff, including the money of the Deceased in the BOC and HSB accounts;

(l)   Conflicts developed between the Deceased and the Defendant about the operations of the BOC and HSB accounts;

(m)   In order not to allow the 1^st Plaintiff to share or enjoy the Deceased’s money, the Defendant transferred all the money out from the BOC and HSB accounts into her own account without the authority from the Deceased.

145.  Mr Kwong submitted that it is unbelievable that the Deceased and the 1^st Plaintiff would think that they need the deposit slips to enquire with or operate the BOC and HSB accounts.  I agree with Mr Kwong to a certain extent but on balance, this defect on the part of the 1^st Plaintiff’s evidence does not on the whole affect my above factual findings based mainly on the evidence of Francis, Madam Ng, Madam Leung, and documentary evidence.

146.  I make no findings on whether the 1^st Plaintiff had admitted to Koon Wah she was taught by a relative to keep away the rental incomes of the Guangzhou Property as it is in my view not material to the issues I need to resolve in this judgment.

147.  In the circumstances, I find the Defendant in breach of an express trust in misappropriating the Deceased’s money in the BOC and HSB accounts.  The Defendant is liable to return all the money to the estate of the Deceased.

148.  As I mentioned previously in this judgment, there is no evidence to suggest that the Deceased transferred the money to the BOC and HSB accounts out of any mistakes or any undue influence from the Defendant.  I am satisfied that the Defendant withheld the sad news of the Mother’s death from the Deceased only out of good will for the benefit of the Deceased and not otherwise. 

Dispositions

149.  I order that the Defendant shall give an account of what is due to the Deceased’s estate and pay to the Deceased’s estate the amounts found due on taking the account.

150.  I make a costs order nisi that costs of the proceedings be to the Plaintiffs to be taxed if not agreed.  This order nisi shall become absolute upon the expiry of 14 days from the date of this judgment.

151.  I thank counsel for their able assistance.