Suen Shu Tai v. Tam Fung Tai

Press Summary (English)

Press Summary (Chinese)

FACV No 9 of 2015

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO 9 OF 2015 (CIVIL)

(ON APPEAL FROM CACV NO. 187 of 2013)

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REASONS FOR JUDGMENT

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Chief Justice Ma (giving the Reasons of the Court):

1.The present appeal was brought by the Defendant against the Judgment of the Court of Appeal[1] dismissing her appeal from the First Instance judgment of Recorder Horace Wong SC.[2]  Leave to appeal to this Court was granted by the Court of Appeal[3] under the former s 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance Cap 484 on the basis that the subject matter of the appeal concerned property over the value of $1 million; in other words, an appeal under the previous “as of right” provision in that Ordinance.[4]

2.After hearing counsel for the Defendant appellant,[5] we dismissed the appeal with costs,[6] stating that the Reasons for Judgment would be handed down in due course.  The appeal was wholly without merit.

3.The Plaintiff respondent is the mother of the Defendant, her daughter.  At the time of the trial before the learned Recorder, she was aged 85.  The case concerned the transfer of some properties by the Plaintiff to the Defendant in 1999.  As we shall presently see, the determination of the factual disputes between the parties by the Recorder on the evidence before him was critical to the outcome of the litigation.  The Court of Appeal upheld the trial judge’s findings of fact, so that there were concurrent findings of fact before this Court.  As the parties were reminded, the Court does not, save in rare and exceptional cases, review concurrent findings of fact.  It is no part of the Court of Final Appeal’s function to debate “yet again the factual findings made at first instance and previously reviewed by the Court of Appeal” in the hope on the part of an appellant of finally obtaining favourable findings.[7]  This was decisive in our dismissing the Defendant’s appeal.  We shall briefly explain why the Court arrived at this conclusion.

4.The dispute between the parties concerned two properties (“the properties”): a shop located in Che Cheung Building in Kowloon (“the shop”) and a flat located in Ha Heung Road, also in Kowloon (“the flat”). These properties were at one stage owned by the Plaintiff’s husband, Tam Yuk Lam (“Tam”), together with another property in Manning Theatre Building (“the Manning Theatre Building property”).  The Plaintiff and Tam had four children (three sons and their daughter, the Defendant), all born in the Mainland where the Plaintiff once lived.   In 1982, the Plaintiff and the Defendant settled in Hong Kong, the three sons remaining in the Mainland.  At the time, Tam was already living in Hong Kong and had taken a concubine, a Madam Lou Nui[8], with whom he had three children.

5.After the flat was purchased by Tam in 1986, the Plaintiff began to live there, with Tam staying there every other day.  The Defendant, who by this time had married, did not live in the flat.  She married in 1984 and had three children of her own.  In 1995, she divorced her husband.  From July 1984, she began to live on Comprehensive Social Security Assistance (“CSSA”).

6.In August 1997, having suffered a stroke in 1994, Tam divided his properties between the Plaintiff and Lou Nui.  The shop and the flat were transferred to the Plaintiff while the Manning Theatre Building property was transferred to Lou Nui.

7.In relation to the transfer of the properties to the Defendant in 1999, according to land search records, the shop was assigned by the Plaintiff to the Defendant on 22 September 1999 and the flat was assigned to the Defendant on 5 October 1999.  The Assignments were prepared by an executive in the offices of Messrs George YC Mok and Co. (“GYCM”).  The parties advanced at trial different versions of the circumstances surrounding these Assignments :-

(1) According to the Plaintiff, one day in early 1999, the Defendant went to the flat to show her a letter which indicated that Tam intended to reclaim both properties and to transfer them to Lou Nui. This letter was not produced at trial.  The Plaintiff was told by the Defendant that Tam had given her ten days to move out.  When the Plaintiff became worried at this, the Defendant then suggested that if the properties were to be  transferred into her (the Defendant’s) name, Tam would not then be able to claim the properties for himself.  The Plaintiff agreed.  There was, however, no intention on her part to transfer the beneficial title in the properties to the Defendant; it was merely a device to avoid Tam’s threatened claims.

(2) The Defendant’s version was that the Plaintiff intended to make a gift of the properties to her.  According to the Defendant, it was the Plaintiff who told her about the letter and Tam’s intentions regarding the properties.  The Plaintiff said she wanted to make a gift of them to her for essentially two reasons:  first, Tam had already made provision for the Defendant’s brothers but not her and therefore the Plaintiff wanted to ensure that the Defendant was also looked after; secondly, in any event the Plaintiff would rather her daughter benefited from having the properties than Lou Nui.   The Defendant claimed she was at first reluctant to agree to this transfer (albeit the beneficial interest in the properties would pass to her) since she would no longer be able to receive CSSA.  It was only when the Plaintiff agreed to let her have the rental incomes for the properties as well[9] (less $1,000 for the Plaintiff’s own use) that the Defendant was persuaded to agree to the transfer.

8.The Assignments of the properties showed on their face a purchase by the Defendant of the Plaintiff’s interest in them.  The consideration for the shop was said to be $300,000, the consideration for the flat, $500,000.  The Plaintiff also signed receipts for these amounts.  It was common ground that the Plaintiff did not receive these (or any) amounts from the Defendant, evidently so because on both sides’ cases, the Assignments did not intend and were never intended to reflect the true arrangements between them.  This is a point of some importance as it effectively disposed of one of the Defendant’s arguments sought to be raised in this appeal, namely, that the Plaintiff was estopped by deed from denying the contents of the two Assignments.

9.Subsequent to these transfers, the Plaintiff continued to live in the flat, paying the various expenses associated with the flat such as rates and telephone bills.  She also (as the Recorder eventually found) paid the Defendant the rental income of the two properties less $1,000 for herself.  From 2003 to 2009, the Plaintiff lived intermittently in the flat, dividing her time between Hong Kong and the Mainland (where her sons lived).  She lived in Huidong from June 2007 to June 2009.  When she returned to Hong Kong, she found that the locks to the door in the flat had been changed.  In August 2010, the Defendant sold the flat to a third party, Land Crown International Limited, for $2,988,000, with an additional $1,328,000 as “decoration and removal expenses”.

10.The trial judge heard evidence[10] from 4 witnesses: the Plaintiff, the Defendant, and a conveyancing executive and solicitor from GYCM who had handled the assignment of the properties.  In a 48-page judgment, the Recorder analyzed the evidence, assessed the credibility of the witnesses and concluded that the Plaintiff’s intention in making the Assignments was merely to avoid Tam’s threatened actions (accepting the Plaintiff’s version) but not to make a gift of the properties to the Defendant (rejecting the Defendant’s version).  The legal effect was that the properties were held by the Defendant on resulting trust for the Plaintiff.  Apart from making declarations to this effect, the Recorder also ordered the Defendant to provide an account of her dealings with the properties and that there should be the liberty to apply in relation to both the declarations and the order for an account.[11]

11.In his judgment, Recorder Wong SC gave detailed reasons for his conclusions.  It is not necessary to go through them in detail; they are amply set out in the written judgment.  He found the Plaintiff to be a credible witness but doubted the credibility of the Defendant and found her to be evasive.  Wewould only by way of example highlight some of the reasoning:-

(1) There was no sensible reason for the Plaintiff to make an outright gift of the properties to the Defendant.  She had four children and the Recorder saw no justification for the Plaintiff to favour the Defendant above her brothers.  There was, moreover, no evidence to suggest that Tam had made any provision for the sons as the Defendant had alleged. 

(2) While the Recorder found that the Plaintiff allowed the Defendant to keep the rental income from the properties subsequent to the Assignments, it did not however make sense to divest herself of the beneficial interest in the properties.  They were, after all, her only source of wealth, she having no other income.  She also continued to pay the rates and other expenses of the flat.

(3) The Defendant’s version was found to be unconvincing.  In particular, the Recorder found it difficult to believe the Defendant when she claimed to hesitate to receive a gift of the properties on the ground she would then lose her entitlement to CSSA: as the Judge remarked, the value of the properties far outweighed any CSSA to which she may have been receiving.[12]  Further, on the Defendant’s version, her hesitation was eventually overcome only when the Plaintiff agreed to let her have the rental income for the properties (less $1,000).  As stated earlier, the Judge did find as a fact that the Defendant was permitted to keep the rental income, but this was clearly consistent with the Plaintiff’s version of events.  It was however inconsistent with the Defendant’s version: if she was indeed to take the beneficial interest in the properties, it could not have been any additional incentive to have the rental income as well.  She would surely be entitled to such income as beneficial owner.

12.The Court of Appeal could not fault the Recorder’s analysis of the evidence.  This is conveniently summarized in one paragraph in Cheung JA’s judgment (with whom the other Judges agreed) :-

“8.3 The defendant is challenging the Recorder’s finding of fact. The principle is clear that the appellate court will not disturb a finding of fact by the trial Judge who had the benefit of hearing and observing the evidence at first hand, unless the finding is plainly wrong. In our view the defendant has failed to overcome this high threshold. As the Recorder had made it plain, he decided the issue without reliance on presumptions. His express finding is that the plaintiff did not intend to benefit the defendant when she transferred the properties to her and it was solely done to avoid the properties coming into the hands of Lou Nui. He observed that there really was no reason why the plaintiff should suddenly give the properties to the defendant in 1999 when they were her only valuable assets and she was dependent on them. He also found that the defendant was aware of the plaintiff’s intention at that time.”

13.There being concurrent findings of fact along these lines, the Judge and the Court of Appeal were fully entitled to reach the legal conclusion they did, namely, that despite the Assignments, the Defendant held the properties on resulting trust for the Plaintiff.

14.Despite recognizing this difficulty, Mr Chu sought first to maintain before us that the analysis and assessment of the evidence by the Recorder was faulty and that his erroneous approach had been perpetuated by the Court of Appeal.  This was hopeless and amounted to no more than a third attempt by the Defendant to seek to persuade a court to try the case again.

15.Various attempts were made in the Appellant’s written Case and in the oral submissions before us to raise legal issues to undermine the decisions of the lower courts.  They were all, in ourview, equally hopeless (with some points all but abandoned when Mr Chu made his submissions before us).  Weneed only deal with them briefly:-

(1) First, it was said that a resulting trust had not been properly pleaded by the Plaintiff.  Both the trial Judge and the Court of Appeal rejected this argument and were right to do so. The Statement of Claim specifically pleaded that the properties were assigned to the Defendant at her suggestion to avoid Tam’s claims and that accordingly, the Defendant held them as trustee for her.[13]  The Defendant was under no misapprehension as to what claim she was facing.  In her Defence and Counterclaim, in denying the Plaintiff’s claim, she pleaded facts to make out her case that the assignment of the properties represented a gift.  The object of pleadings is “fairly and precisely to inform the other party or parties in the litigation of the stance of the pleading party (in other words, that party’s case) so that proper preparation is made possible, and to ensure that time and effort are not expended unnecessarily on other issues.”[14]  The Plaintiff’s pleadings in the present case did exactly that.

(2) Next, in the Appellant’s Case, Mr Chu argued that the Recorder and the Court of Appeal failed to consider the impact of Chinese customary law on the issue whether the Plaintiff ought to have been believed when she said she only agreed to transfer the properties to the Defendant so as to put them out of Tam’s reach.  The point sought to be derived from this reliance on Chinese customary law was that the threat on the part of Tam to reclaim the properties was an empty and legally unsustainable one.  This was an entirely new point raised for the first time in this Court (and unpleaded as well) without the benefit of the views (not to mention, assessment) by the Recorder or the Court of Appeal.[15]  It was also pointless: it will be remembered that as part of the defendant’s own case, there was a threat by Tam to reclaim the properties.[16]  It was immaterial whether this claim had merit or not.  It was enough that the threat was regarded by both Plaintiff and Defendant as a real one. 

(3) Thirdly, the Defendant relied on estoppel by deed, meaning that the Plaintiff was bound by the terms of the two Assignments of the properties as well as the receipt clauses in which the Plaintiff confirmed receipt of the purchase monies.  Quite apart from the principle that the law will not permit instruments such as an assignment to be used as an instrument of fraud,[17] the Defendant’s own case at trial was that the Assignments did not represent what they purported to say.

(4) Fourthly, before us, Mr Chu sought to argue that the Plaintiff had not come to court with clean hands.  This was again a point never raised before and therefore not developed or dealt with by the courts below.

16.Finally, weshould just briefly mention the presumption of advancement.  Both the Judge and the Court of Appeal discussed this doctrine at some length before coming to the view that in any event the presumption, even if it applied, was displaced by the evidence before the court. Interesting though the question may be, in particular whether a modern view should be taken of the presumption to include transfers from  mother to daughter (this presumption, if it applies, is of course usually relevant only for evidential purposes), a detailed consideration was and is simply not called for in the present case.  We would reserve a detailed consideration of this doctrine for another occasion.

17.For these reasons, the appeal was dismissed.

Mr George Chu, instructed by Joseph Li & Co, assigned by Director of Legal Aid, for the Defendant / Appellant

Ms Josephine Tjia, instructed by Tsangs, assigned by Director of Legal Aid, for the Plaintiff / Respondent