Ho Ko Shing , The Administrator of the Estate of Ho Leung Hung, Deceased v. Ho Chee and Another

DCCJ 747/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 747 OF 2013

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JUDGMENT

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1.This is the action taken out by the plaintiff in his capacity as the administrator of the estate of his late father, Ho Leung Hung (“the Deceased”), to seek, in the main, equitable compensation against the 1^st defendant for breach of trust, and against the 2^nd defendant for knowing receipt of trust money and/or dishonest assistance.

2.The Deceased died intestate on 10^th May 2011 and letters of administration were granted to the plaintiff on 14^th February 2012.  The instant action was issued on 5^th March 2013.

3.The Deceased has 5 siblings and the 1^st defendant is his youngest brother.  The 2^nd defendant is the son of the 1^st defendant.  For convenience, I shall refer to the 1^st and 2^nd defendants hereinbelow collectively as “the defendants”.

THE PARTIES’ PLEADED CASES

4.Briefly, the plaintiff’s case is as follows:-

(a) The Deceased had maintained an account with Hang Seng Bank numbered 288-2-033166 (“the HS Bank Account”) during his lifetime and money was deposited and withdrawn from the HS Bank Account for his daily living expenses.

(b) On 10^th January 2005, the Deceased, for the purpose of minimizing the trouble of frequenting the bank to withdraw money from the HS Bank Account, nominated the 1^st defendant as a bare trustee and authorized him to act for and on behalf of the Deceased in controlling the HS Bank Account.  The 1^st defendant accepted the nomination and became the trustee of the Deceased’s money in the HS Bank Account. (“the Trust”)

(c) Since the creation of the Trust, the Deceased had, from time to time, requested the 1^st defendant to withdraw money from the HS Bank Account and deliver the withdrawn money to the Deceased for his daily living expenses.

(d) As at the date of death of the Deceased, the HS Bank Account had a balance of only HK$312.29.

(e) The plaintiff discovered from the Deceased’s passbook for the HS Bank Account and his inquiries with Hang Seng Bank that the 1^st defendant had made numerous large withdrawals and transfers of money from the HS Bank Account.  He has particularly singled out 2 transfers and 1 withdrawal to form the basis of his claim against the defendants.

(f) The 1^st transfer was on 12^th January 2008 where the 1^st defendant transferred HK$45,000.00 from the HS Bank Account to the 2^nd defendant’s bank account numbered 383-493780-888 (“the D2’s Bank Account”). The 2^nd transfer was on 28^th May 2008 where the 1^st defendant transferred HK$200,000.00 from the HS Bank Account to the D2’s Bank Account.  The withdrawal happened on 26^th February 2011 where the 1^st defendant withdrew HK$85,000.00 cash from the HS Bank Account.

(g) Having known that the money transferred was subject to the Trust and that the transfer was a breach of the Trust on the part of the 1^st defendant, the 2^nd defendant therefore held the money transferred on trust for the Deceased or the estate of the Deceased and/or was liable as an accessory on the ground of dishonest assistance.

(h) The Deceased had, from time to time, expressed his unequivocal intention that the money in the HS Bank Account would belong to the plaintiff upon his death. 

5.At trial, the plaintiff through his counsel, Mr. Yao, has abandoned his claim in respect of the HK$45,000.00 transferred on 12^th January 2008, and submitted in the opening that the 1^st defendant has misapplied the trust money by causing the transfer of HK$200,000.00 on 28^th May 2008 and the cash withdrawal of HK$85,000.00 on 26^th February 2011.  Mr Yao further submitted in the opening that the 1^st defendant had applied the HK$85,000.00 withdrawn for his own use and benefit, and that the 2^nd defendant had beneficially received the HK$200,000.00 transferred with knowledge of the misapplication and was therefore accountable to the plaintiff in equity.

6.In their defence, the defendants contrasted the close relationship between the Deceased and the 1^st defendant with the poor relationship between the plaintiff and the Deceased.  Their case is as follows:-

(a) The Deceased and the 1^st defendant came to Hong Kong from the mainland of China in about 1949.

(b) After they came to Hong Kong, they had lived and worked together in Tsuen Wan.

(c) They worked as hawkers selling daily necessities and the Deceased being the elder brother was in control of the money earned from the business.  The 1^st defendant had taken care of the Deceased by doing household chores.

(d) In about 1958, the 1^st defendant got married.  The Deceased continued to live with the 1^st defendant and his wife who started taking care of the Deceased by doing all the household chores.

(e) In 1971, the Deceased and the 1^st defendant purchased Flat J, 1^st Floor, Ko Wai Lau, No 38 Tak Wah Street, Tsuen Wan, New Territories, Hong Kong (“the Ko Wai Lau Property”) as tenants in common in equal shares.

(f) In about 1981, the plaintiff came to Hong Kong from China to reunite with the Deceased.  The plaintiff lived in the Ko Wai Lau Property and the 1^st defendant’s wife took care of him as well.

(g) In about 1989, the plaintiff’s wife came to Hong Kong from China to re-unite with the plaintiff.  Thereafter, their 3 children also came to settle in Hong Kong.

(h) In a bid to purchase a property to accommodate the plaintiff’s family and himself, the Deceased sold his half share in the Ko Wai Lau Property to the 1^st defendant in November 1989 and then purchased Flat C, 5^th Floor, Tak Yan Building, 325 Sha Tsui Road, Tsuen Wan (“the Tak Yan Building Property”) in December 1989.

(i) The Tak Yan Building Property was close to the Ko Wai Lau Property.

(j) Because of a long period of separation, the relationship between the Deceased and the plaintiff was plain and ordinary after re-union.  Their relationship turned for the worse after the Deceased and the plaintiff moved to live in the Tak Yan Building Property.  The plaintiff resorted to physical violence against the Deceased, culminating in the Deceased’s renunciation of his father-and-son relationship with the plaintiff in the presence of his relative, Mr. Ho Tau-ming (“Mr. Ho”), in about 2004.[1]

(k) After the renunciation, the plaintiff forced the Deceased to transfer the Tak Yan Building Property to him[2] and the Deceased had no alternative[3] but to do so by way of a deed of gift on or about 29^th November 2004 (“the Deed of Gift”).

(l) After the transfer, the Deceased was forced to leave the Tak Yan Building Property and he had no alternative but to return to Fogang (his home town) in China.

(m) After the renunciation, the 1^st defendant was the only close relative the Deceased could trust and rely on to take care of him. Against this background, the Deceased, whilst expressing his wish that he wanted the 1^st defendant to take care of him for the rest of his life while he was living in China and his funeral and burial matters after his death, offered to give his own savings of about HK$500,000.00 in the HS Bank Account to the 1^st defendant in consideration of the 1^st defendant’s promise and undertaking:-

(i) to pay his living and medical care expenses for the rest of his life while he was living in China or Hong Kong;

(ii) to pay his funeral service and burial expenses after his death;

(iii) to pay all miscellaneous expenses relating and incidental to handling the Deceased’s matters; and

(iv) to pay such expenses even after depletion of the HK$500,000.00 odd in the HS Bank Account.

(n) The Deceased also expressed his wish and intention that the 1^st defendant could use the HK$500,000.00 odd in the HS Bank Account as his own money as and when he thought fit and necessary and if there was any balance left behind in the HS Bank Account after his death, the balance would be given to the 1^st defendant.

(o) The 1^st defendant accepted the offer. (hereinafter referred to as “the Agreement”)

(p) In order to give effect to the Agreement,

(i) the Deceased executed a power of attorney[4] of his own free will in the presence and with the advice of a Hang Seng Bank staff on or about 10^th January 2005, giving the 1^st defendant full power to use the HK$500,000.00 odd in the HS Bank Account at his own absolute discretion as his own money; and

(ii) the Deceased handed over the passbook for the HS Bank Account to the 1^st defendant for his safe custody.

(q) Since about January 2005, the Deceased had been living in Fogang until he suffered a stroke in about March 2011.  He started living in a health-care centre in Tsuen Wan in about March 2011 until he died in May 2011.

(r) The 1^st defendant honoured and performed his obligations under the Agreement during the lifetime and after the death of the Deceased.

(s) After the execution of the power of attorney[5], the 1^st defendant, from time to time, withdrew money from the HS Bank Account to pay the daily living expenses of the Deceased.

(t) The defendants admitted the transfer of HK$45,000.00 and HK$200,000.00 from the HS Bank Account to the D2’s Bank Account on 12^th January 2008 and 28^th May 2008 respectively, and the cash withdrawal of HK$85,000.00 on 26^th February 2011.

(u) The defendants denied the existence of the Trust, any breach of Trust by the 1^st defendant, and the 2^nd defendant’s knowledge of the Trust and the 1^st defendant’s breach of the Trust.

7.The above is a synopsis of the respective case of the plaintiff and the defendants.  Before I move on to the issues and evidence of this case, I need to give my reasons for not allowing the plaintiff’s application to call one Ms Law Pi Tao (“Ms Law”) as factual witness at the eleventh hour.

A PRELIMINARY MATTER

8.On 10^th July 2015, the plaintiff took out a Summons for leave to call Ms Law at the trial of the instant action which was only 5 days apart. (“the Summons”)  The plaintiff had annexed to the Summons a 3-page witness statement of Ms Law (“Ms Law’s Witness Statement”).  At the hearing of the Summons, Mr. Yao (counsel representing the plaintiff), on further instructions, applied to delete the last sentence of para. 3 of Ms Law’s Witness Statement.[6]

9.By any yardstick, the Summons is a very late application.  Quite predictably, the defendants opposed the Summons.  After hearing counsel representing both parties before the commencement of the trial, I dismissed the Summons with costs to the defendants and the plaintiff’s own costs are to be taxed in accordance with the Legal Aid Regulations.  Immediately after my decision, I indicated to the parties that I would give the reasons for my decision in the Judgment of this action.  This I now do and the reasons are as follows:-

(a) The procedural history of the instant litigation showed that all along the plaintiff was the only witness and the plaintiff’s solicitors have confirmed in the timetabling and listing questionnaires that the plaintiff was the only witness.  In the listing questionnaire, the plaintiff’s solicitors confirmed that there would be no interlocutory applications.  The Opening Submissions filed by Mr. Yao on 2^nd July 2015 reiterated that the plaintiff would be the only factual witness at trial.  Until the service of the Summons, the defendants were led to believe that the only witness they had to meet would be the plaintiff and no doubt they had prepared their defence on such basis.  It goes without saying that the proposed introduction of Ms Law’s Witness Statement at the very late stage was a blatant flouting of the earlier case management timetable and that the defendants and their legal representatives must have been taken by surprise by the Summons filed shortly before the trial.  This procedural history clearly demanded an explanation from the plaintiff for such a prodigiously late application.  To my dismay, no supporting affirmation was filed to provide the court and the defendants with a full account of the lateness.

(b) Ms Law is the 2^nd wife of the plaintiff, and has been living with the plaintiff on amicable terms since 1997.  In other words, Ms Law was all along available to provide a witness statement had the plaintiff considered it useful to do so.  When Mr. Yao was asked why the plaintiff only applied to call his wife to give evidence at such a late stage of the proceedings, he explained that the plaintiff was advised not to call his wife (Ms Law) to give evidence at the early stage of the proceedings and that it was only after he saw the plaintiff in conference on 3^rd July 2015 that he advised the plaintiff to call his wife (Ms Law) and the plaintiff acted on his advice.  To be fair to Mr. Yao, he was only assigned by the Director of Legal Aid to be the counsel for the plaintiff in May 2015 and he was not the lawyer who advised the plaintiff not to call his wife.  Plainly, it was the plaintiff’s considered decision under his earlier legal advice not to call his wife (Ms Law) to give evidence.  In my view, there was no satisfactory reason for the egregious delay in taking out the present application.  On this ground alone, the Summons should be dismissed.

(c) The Court will take note of the presence or absence of any real prejudice to the defendants.  But the absence of any real prejudice does not ipso facto justify leave to be granted for the late application.  Delay itself can amount to real prejudice, and the later the applicant makes the application to adduce additional witness evidence, the more likely it is to cause real prejudice to the other party.

(d) On a reading of Ms Law’s Witness Statement, the evidence sought to be given by Ms Law is within a narrow compass.  After the Deceased returned to Fogang in 2005, Ms Law regularly visited the Deceased in Fogang in Ching Ming Festival and summer vacation.  Sometime, she would bring her 2 children to see the Deceased.  On every visit, she would pay about HK$1,000.00 to the Deceased.  About 2008, the Deceased fell down and suffered injuries at home in Fogang.  After being informed of the accident, the plaintiff’s whole family returned to Fogang to visit the Deceased.  In 2008 or thereabouts, the Deceased told Ms Law that he wished to return and live in Hong Kong.  The Deceased gave up his idea to return to live in Hong Kong after he was told that if he returned to Hong Kong, he would be required to live in an elderly home because the Tak Yan Building Property was not spacious enough to accommodate the Deceased.  When Ms Law visited the Deceased in the elderly home[7] one day in March 2011, the Deceased told Ms Law in the presence of a staff of the Elderly Home, among other things, that he had HK$330,000.00 which was now held by the 1^st defendant, that the bank passbook had written the name of the 1^st defendant and that she should get back the money from the 1^st defendant later.  A staff of the elderly home also told Ms Law that the Deceased had told her directly that he had HK$330,000.00 now held by the 1^st defendant.

(e) Mr. Yao submitted that the plaintiff was not adopting an underhand tactic in seeking a late application to call Ms Law to give evidence, and that the evidence to be given by Ms Law would be short and would not prolong the 5-day trial to any significant extent.  This may not be so.  Although Ms Law’s Witness Statement is only a short document, it does not necessarily mean that her time in the witness box will be short.  Ms Law who has been living with the plaintiff since 1997 and has personal knowledge of some important areas of controversy, may be cross examined for quite some time.  Furthermore, if leave was granted and the defendants needed time to take instructions on Ms Law’s Witness Statement, the Court would be inclined to give the defendants a short adjournment and the trial might not be able to finish within 5 days.

(f) Mr. Yao further submitted that the evidence of Ms Law had already been alluded to by the plaintiff in his witness statement filed on 29^th September 2014, and that the purpose of calling Ms Law was to call her to give evidence on matters in respect of which she had direct personal knowledge, and the plaintiff’s evidence on the same matters would only be hearsay evidence.  Be that as it may, this factor may only suggest that the plaintiff and his legal representatives had not been taken aback.  This factor per se however does not justify the granting of leave to file Ms Law’s Witness Statement and to call Ms Law as a factual witness.

10.Deputy High Court Judge Marlene Ng has given a clear exposition of legal principles on late application for additional witness statement in Nam Ching Wun v Tsun Un Pawn Shop and Others, HCA 2151/2008 (Unreported), see paras. 54-59.  To avoid repetition, I only need to echo her exposition of legal principles.

ISSUES

11.The issues culled from the pleadings and evidence transpired at trial are as follows:-

(a) Whether the 1^st defendant was a bare trustee of the Deceased’s money/credit balance in the HS Bank Account. (“Issue A”)

(b) If the answer is in the affirmative, whether the 1^st defendant was in breach of the Trust by:-

(i) transferring HK$200,000.00 from the HS Bank Account to the D2’s Bank Account on 28^th May 2008; and/or

(ii) withdrawing cash of HK$85,000.00 from the HS Bank Account on 26^th February 2011. (“Issue B”)

(c) Relevant to issues (a) and (b) above, whether the Deceased and the 1^st defendant had entered into the Agreement and the 1^st defendant had honoured his obligations under the Agreement. (“Issue C”)

(d) Whether the Deceased had consented to the transfer of HK$200,000.00 to the D2’s Bank Account as a loan. (“Issue D”)

(e) Whether the 2^nd defendant had repaid the Deceased the sum of HK$200,000.00 borrowed. (“Issue E”)

(f) If the 1^st defendant was in breach of the Trust,

(i) whether the 2^nd defendant knew that the 1^st defendant was a bare trustee under the Trust and that the transfer of HK$200,000.00 to the D2’s Bank account was in breach of the Trust; and/or

(ii) whether the 2^nd defendant received the HK$200,000.00 dishonestly. (“Issue F”)

12.Issues D and E above are not apparent from the pleadings.

EVIDENCE

13.The plaintiff and the defendants have given evidence at trial.  Their evidence can be summarized as follows.

The plaintiff

14.The plaintiff was born in Fogang on 13^th August 1949 and is now aged 66.  He is the only son of the Deceased and came to Hong Kong in 1985.

15.The plaintiff has 2 marriages and his present wife is Ms Law.  Ho Kin Fai (“Kin Fai”) is the elder son born to the plaintiff’s 1^st marriage.  The plaintiff has 2 children to his 2^nd marriage with Ms Law.

16.The Deceased came to Hong Kong in about 1949 and had only returned to Fogang to visit his family twice before the plaintiff came to Hong Kong in 1985.  The Deceased had maintained contact with his family by sometimes writing to the plaintiff’s mother.  The Deceased had told the plaintiff that he worked with the 1^st defendant selling fish in Hong Kong.

17.After the plaintiff came to Hong Kong in 1985, he had lived with the Deceased and the 1^st defendant’s family in the Ko Wai Lau Property.  The 1^st defendant introduced the plaintiff to work in a textiles factory, and the plaintiff had worked in the textiles factory until 2003 when the textiles factory was relocated to the mainland of China.  At that time, the Deceased and the 1^st defendant each held 50% interest in the Ko Wai Lau Property.

18.The plaintiff and the Deceased purchased a house in Fogang and vested the house in the name of the plaintiff’s mother (“the Fogang House”).  The plaintiff and the Deceased each contributed to half of the purchase price of the Fogang House.

19.After the plaintiff came to Hong Kong, he had applied for his 1^st wife and Kin Fai to come to Hong Kong.  In order to provide a better living environment for the plaintiff and his family, the Deceased purchased the Tak Yan Building Property which was at a 2 to 3 minutes’ walking distance from the Ko Wai Lau Property.  The Deceased had discussed the matter with the 1^st defendant before he decided to purchase the Tak Yan Building Property.

20.Between late 1989 and 1990, the Deceased and the plaintiff moved to the Tak Yan Building Property.  Shortly afterwards, the plaintiff’s 1^st wife and Kin Fai (then 10 odd years old) came to Hong Kong and lived with the Deceased and the plaintiff in the Tak Yan Building Property.  Because the Tak Yan Building Property was not spacious and the Deceased and Kin Fai were sleeping in the same room, they began to have disputes.

21.Because the plaintiff’s relationship with his 1^st wife had encountered problems, the plaintiff divorced his 1^st wife in 1996.  The plaintiff frankly admitted that because of the disobedience of Kin Fai and the problems with his 1^st wife, he could not control his temper and had been impolite to the Deceased.  The Deceased felt unhappy and possibly, the Deceased had told the 1^st defendant about that.  The plaintiff agreed that because of that, the 1^st defendant had scolded him.

22.In 1997, the plaintiff married Ms Law.  In the same year, the plaintiff’s mother died.

23.The plaintiff admitted that on one occasion when the Deceased had a dispute with Kin Fai over the latter’s noisy music, the plaintiff raised his voice to talk to the Deceased.  This caused the Deceased to leave the Tak Yan Building Property for the Ko Wai Lau Property.  The plaintiff remembered that the Deceased had returned to the Tak Yan Building Property the same night. The plaintiff agreed that the 1^st defendant and the Deceased’s relative, Mr. Ho, had come to the Tak Yan Building Property to mediate between him and the Deceased, and that during the mediation, the Deceased and the plaintiff were very agitated.  The plaintiff however denied that they had renounced their father-and-son relationship.

24.The plaintiff did not know Mr. Yau Kong Chiu (“Mr. Yau”) who, according to the defendants, was a close friend and had seen and warned the plaintiff not to further assault the Deceased.  Neither had the plaintiff heard of the name of Mr. Yau.  The plaintiff flatly denied that he had used physical violence against the Deceased and that because of the use of physical violence, the Deceased left the Tak Yan Building Property.

25.The plaintiff said that his relationship with the Deceased was not bad.  Because of the dispute with Kin Fai over Kin Fai’s noisy music (resulting in the Deceased’s sleeplessness), the Deceased returned to live in Fogang.

26.Before the Deceased returned to live in Fogang, he asked the plaintiff for HK$400,000.00. But the plaintiff could only give him HK$375,000.00 for his future livelihood (養老金) in Fogang.  On 9^th December 2004, the plaintiff transferred HK$270,000.00 from his account with the China State Bank Ltd, and HK$105,000.00 from his account with Standard Chartered Bank to the HS Bank Account.  Before those transfers, the plaintiff did not know the financial position of the Deceased.

27.At the suggestion of the Deceased and on his own volition, the Deceased transferred the Tak Yan Building Property to the plaintiff by the Deed of Gift.  The whole arrangement was made and decided by the Deceased and the solicitors firm who prepared the Deed of Gift was also appointed by the Deceased.  The plaintiff was only told by the Deceased to attend the solicitors firm to sign on the Deed of Gift.  The plaintiff denied that he had forced the Deceased to transfer the Tak Yan Building Property to him and that in consideration of the transfer of the Tak Yan Building Property to him, he would pay the Deceased HK$375,000.00.  The plaintiff denied knowledge that the Deed of Gift was entered into to avoid stamp duty.

28.In January 2005 (before Chinese Lunar New Year), the Deceased returned to live in Fogang.  In Fogang, the Deceased lived in the Fogang House and a “live-in” servant was employed to take care of the Deceased.

29.Whilst the Deceased was in Fogang, the plaintiff did not know whether the 1^st defendant had maintained contact with the Deceased.

30.Because the plaintiff was very busy to earn a living in Hong Kong, he only returned to Fogang to visit the Deceased once between 2005 and 2011[8].  During that period of time, the plaintiff had not asked the Deceased whether he had enough money to live on.  Neither had the Deceased asked him for money.  The plaintiff’s 2^nd wife, Ms Law, regularly visited the Deceased in Fogang in Ching Ming Festival and summer vacation.  Sometime, she would bring her 2 children to see the Deceased.  On every visit, she would pay about HK$1,000.00 to the Deceased.

31.Because the plaintiff was busy with his work, he did not know when the Deceased had returned to Hong Kong between 2005 and 2011.

32.About 2008, the Deceased fell down and suffered injuries at the Fogang House.  After the accident, the plaintiff’s whole family had returned to Fogang to visit the Deceased in the same year.  During the visit, the Deceased told the plaintiff at the Fogang House that his money was held by the 1^st defendant because it would be convenient for the 1^st defendant to remit money to him in China.  On that occasion, the Deceased did not tell the plaintiff how much money the 1^st defendant was holding for him.

33.On 18^th February 2011, the Deceased fell down again at the Fogang House and a relative in Fogang telephoned the plaintiff informing him that the Deceased had been admitted to Fogang Hospital.  The plaintiff went to visit the Deceased at Fogang Hospital immediately, and at Fogang Hospital, a doctor told him that the Deceased was suffering from “腦梗塞” (brain infarction).  At Fogang Hospital, the Deceased told the plaintiff that he had HK$330,000.00 held by the 1^st defendant and asked the plaintiff to get back from the 1^st defendant the HK$330,000.00.  After discussing the matter with the relatives, the plaintiff brought the Deceased back to Hong Kong for medical treatment.

34.The plaintiff denied that what the Deceased had told him at Fogang Hospital in February 2011 was a fabrication.

35.In Hong Kong, the Deceased stayed in Northern District Hospital for about 2 weeks.  Thereafter, the Deceased was transferred to Tai Po Hospital to continue his medical treatment.  In March 2011, the Deceased was admitted to the Elderly Home where the Deceased had stayed until his death on 11^th May 2011.  The Elderly Home was a private government-subsidized elderly home.

36.When the Deceased was in Northern District Hospital, the plaintiff told the 1^st defendant that the Deceased was in Northern Hospital and the 1^st defendant went there to visit the Deceased.  On 26^th February 2011, the 1^st defendant withdrew HK$85,000.00 cash from the HS Bank Account.

37.In mid-April 2011, one Ms Chan, a staff of the Elderly Home, asked the plaintiff to give her the Deceased’s passbook to verify whether or not the Deceased had money so that she could help the Deceased apply for assistance from the Social Welfare Department.  The plaintiff went to the Ko Wai Lau Property and got back from the 1^st defendant the Deceased’s passbook for the HS Bank Account.  That was the first time he read the Deceased’s passbook and discovered that the HS Bank Account had not much money.

38.In respect of the expenses incurred for the medical treatment of the Deceased at Fogang Hospital and for bringing the Deceased to Hong Kong, the 1^st defendant has reimbursed the plaintiff for those expenses in the sum of HK$14,000.00.  It is not in dispute that the 1^st defendant has paid the Elderly Home expenses and the funeral and burial expenses.  But the 1^st defendant only paid the funeral and burial expenses after the plaintiff pressed the 1^st defendant for payment.

39.As at the date of death of the Deceased, the HS Bank Account  had a credit balance of only HK$312.29.

40.After the plaintiff was granted the letters of administration, he inquired the state of the HS Bank Account from Hang Seng Bank and obtained documentation relevant to all the withdrawals by the 1^st defendant during the period when the 1^st defendant held the money in the HS Bank Account on trust for the Deceased.  The plaintiff discovered problematic withdrawal and transfers.

41.The plaintiff never heard of anyone mentioning the Agreement and denied the Agreement.  The plaintiff denied that the HK$200,000.00 transfer and HK$85,000.00 cash withdrawal were done with the consent of the Deceased.  The plaintiff also denied that the 2^nd defendant had returned by instalment the HK$200,000.00 borrowed to the 1^st defendant who then used all the money returned on the Deceased.

The 1^st defendant

42.The 1^st defendant, now in his late eighties, had 4 siblings and the Deceased was the 1^st defendant’s elder brother.

43.The 1^st defendant is married and had 5 children.  The 2^nd defendant is his 4^th child.

44.About 1949, the Deceased and the 1^st defendant moved to Hong Kong from Fogang to try to earn a better and stable living.  The 1^st defendant had a good relationship with the Deceased and they lived and worked together in Tsuen Wan, Hong Kong.  They carried on their own small business of selling daily necessities as hawkers in Tsuen Wan.  The Deceased was in charge of the money generated from the business and responsible for depositing the money into the Deceased’s bank account whilst the 1^st defendant was responsible for the day-to-day business.  The 1^st defendant also took care of the Deceased’s daily life and did the household chores.

45.About 1958, the 1^st defendant got married, and the Deceased continued to live with the 1^st defendant’s family.  The 1^st defendant’s wife took care of the Deceased’s daily life by doing all the household chores for him and respected him as her elder brother-in-law.

46.On 31^st December 1971, the Deceased and the 1^st defendant used the proceeds of the business to purchase the Ko Wai Lau Property as tenants in common in equal shares.

47.Quite some time after the China’s Open-Door Policy in the 1980’s, the plaintiff came to Hong Kong from Fogang to reunite with the Deceased.  The plaintiff moved into the Ko Wai Lau Property and the 1^st defendant also took care of the plaintiff’s daily life by doing all the household chores for him.

48.About 1989, the plaintiff’s wife came to Hong Kong from Fogang to reunite with the plaintiff, and later followed by their 3 children.  The Deceased decided to purchase a flat of his own in Tsuen Wan near the Ko Wai Lau Property to accommodate the plaintiff’s family and himself.  The Deceased sold his half share of the Ko Wai Lau Property to the 1^st defendant, and then purchased the Tak Yan Building Property at HK$350,000.00 on 6^th December 1989.  The Tak Yan Building Property was very close to the Ko Wai Lau Property so that the 1^st defendant and his wife could take care of the Deceased when necessary.

49.In cross examination, the 1^st defendant said that he very much liked the Deceased to live with the plaintiff so that the plaintiff could take care of the Deceased.  It was the 1^st defendant who suggested to the Deceased to buy the Tak Yan Building Property.  Before the purchase, the Deceased and the 1^st defendant had viewed the Tak Yan Building Property, discussed over the matter and finally made a decision to purchase.  At that time, the 1^st defendant did not feel dislike for the plaintiff.

50.The relationship between the Deceased and the plaintiff’s family however deteriorated after they all moved into the Tak Yan Building Property.  The deterioration of their relationship was attributable to the crowded living condition and financial matters.

51.About 2004, during a visit by Mr. Yau, the Deceased in the 1^st defendant’s presence complained to Mr. Yau, who was then a police officer and his close friend, that the plaintiff had scolded and assaulted him from time to time.  The reason, as Mr. Yau was told, was that the plaintiff did not want to take care of the Deceased and wanted to force him to leave the Tak Yan Building Property so that the plaintiff’s family could occupy the entire Tak Yan Building Property.  The Deceased asked Mr. Yau to mediate and warn the plaintiff not to scold and assault him again.  Mr. Yau then accompanied the Deceased back to the Tak Yan Building Property where he warned the plaintiff not to assault the Deceased any more otherwise a report would be made to the police.

52.The plaintiff paid no heed to Mr. Yau’s warning.  In about 2004, the plaintiff threatened to chop the Deceased by brandishing a knife in the heat of a quarrel.  The Deceased ran away from the Tak Yan Building Property to the Ko Wai Lau Property wearing only his underpants.  At the Ko Wai Lau Property, the Deceased sought help from the 1^st defendant and asked the 1^st defendant to harbor him.

53.In cross examination, the 1^st defendant said that he did not actually see the plaintiff wielding the knife, but was only told by the Deceased about the event.  This was the only incident where the plaintiff had assaulted the 1^st defendant.  The 1^st defendant further said in cross examination that the Deceased returned to the Tak Yan Building Property with only his underpants on after he stayed in the Ko Wai Lau Property for about 2 hours.  The 1^st defendant had not reported the incident to Mr. Yau or Kai Fong Welfare Association.  Neither had the 1^st defendant suggested to the Deceased to come to live with him.

54.The conflicts, quarrels and domestic violence still subsisted between the plaintiff and the Deceased.  In about the 2^nd half of 2004, the Deceased told the 1^st defendant that he had renounced the father-and-son relationship with the plaintiff in the presence of Mr. Ho and that a written document to such an effect had been drafted by Mr. Ho and signed by the Deceased and the plaintiff.  The Deceased also related to the 1^st defendant the contents of the written document signed by him.  The 1^st defendant however did not see the written document himself.

55.After the Deceased and the plaintiff renounced their father-and-son relationship, the plaintiff forced the Deceased to transfer the Tak Yan Building Property to him.  The Deceased felt that he was not safe to live in the Tak Yan Building Property under the plaintiff’s threat of violence.  The Deceased had no alternative but to transfer the Tak Yan Building Property to the plaintiff by the Deed of Gift on 29^th December 2004.  The Deceased had told the 1^st defendant that he was not willing to transfer the Tak Yan Building Property to the plaintiff, but was only threatened to do so.

56.In cross examination, the 1^st defendant said that it was only after the plaintiff had forced the Deceased to transfer the Tak Yan Building Property to him that the plaintiff proposed to renounce his son-and-father relationship with the Deceased.

57.After the transfer, the plaintiff also forced the Deceased to leave the Tak Yan Building Property.  The Deceased had no alternative but to return to Fogang.  The 1^st defendant explained in cross examination that because the Deceased could no longer live with the plaintiff and had been forced to transfer the Tak Yan Building Property to him, he had no alternative but to return to Fogang.  In re-examination, he further explained that it would be life-threatening to continue living in the Tak Yan Building Property.

58.The 1^st defendant referred to the Agreement and described the Agreement in Chinses as “生養死葬” agreement.  All the 1^st defendant’s children including the 2^nd defendant agreed to take care of the Deceased and supported the Agreement.  The 2^nd defendant would keep the 1^st defendant’s “生養死葬” promise even though the money in the HS Bank Account was not enough.  Thereafter, the Deceased and the 1^st defendant executed a power of attorney/ “Addition/Change of Information of Authorized Person of Personal Account” form (“the Pro Forma Form”) in the presence and with the advice of a Hang Seng Bank staff on or about 10^th January 2005, and the Deceased gave the 1^st defendant his passbook for the HS Bank Account for the latter’s safe custody.

59.In cross examination, the 1^st defendant said that they went to the bank to execute the Pro Forma Form first before the Agreement.  The 1^st defendant said that before the execution of the Pro Forma Form, the Deceased told him in the bank that he could withdraw the money from the HS Bank for his living expenses in the mainland of China.  They only came to the Agreement after they returned to the Ko Wai Lau Property.  After a few days, the Deceased met with the defendants at the Ko Wai Lau Property.  The 1^st defendant told the Deceased that all his children would be responsible for the Deceased’s living expenses notwithstanding that the money in the HS Bank Account was depleted.  The 2^nd defendant supported what the 1^st defendant had told the Deceased and further comforted the Deceased not to worry and said that since the 1^st defendant had no income, he would support the Deceased’s livelihood.

60.When the Deceased was in need of money, he would telephone the 1^st defendant and the 1^st defendant would arrange for the money to be remitted to him.  The 1^st defendant also kept cash at home.  Sometime therefore when the Deceased came to Hong Kong, he would give cash to him.

61.In 2008, when the 1^st defendant was in Fogang, he obtained the verbal consent of the Deceased to allow the 2^nd defendant to borrow HK$200,000.00 from the HS Bank Account so that the 2^nd defendant could purchase a property in Hong Kong.  On that occasion, the 2^nd defendant talked to the Deceased over the phone and the Deceased gave him the verbal approval to borrow HK$200,000.00.

62.On 28^th May 2008, the 1^st defendant transferred HK$200,000.00 from the HS Bank Account to the D2’s Bank Account.

63.The 2^nd defendant repaid HK$5,000.00 cash per month (around the time when the 2^nd defendant was paid salary).  The 1^st defendant asked the 2^nd defendant to repay the money to him.  The 1^st defendant kept those money repaid at home so that he could remit money to the Deceased at the exchange shop whenever the Deceased required money.  In cross examination, the 1^st defendant said that the 2^nd defendant had more or less repaid all the money borrowed.  Since the 1^st defendant had not kept any record of the repayment, he could not clearly work out whether the 2^nd defendant had fully repaid the money borrowed.

64.In early 2011 and before the plaintiff brought the Deceased back to Hong Kong on 20^th February 2011, the Deceased had told the 1^st defendant over the phone that his health was not good and asked the 1^st defendant to help him apply for a place in a government-run elderly home in Hong Kong so that he could stay in such kind of elderly home with subsidy.  The Deceased further asked him to withdraw all the money from the HS Bank Account so that he could pass the means test of the application.  After that telephone conversation, the 1^st defendant had forgotten to do what the Deceased had asked him to do until the Deceased came to Hong Kong in February 2011.  Thereafter, he withdrew HK$85,000.00 from the HS Bank Account on 26^th February 2011 and kept the money in his bank account.  The HK$85,000.00 withdrawn had been used to pay the Deceased’s medical expenses, transportation expenses, the Elderly Home expenses, and the funeral and burial expenses.

65.In cross examination, the 1^st defendant admitted that after he withdrew HK$85,000.00 from the HS Bank Account, he had not made any application for the admission of the Deceased to one of the government-run elderly homes in Hong Kong.

66.The 1^st defendant has overspent the amount of money in the HS Bank Account (at the time when the Deceased and the 1^st defendant executed the Pro Forma Form) for the use and benefit of the Deceased.

The 2^nd defendant

67.The 2^nd defendant confirmed the truthfulness of the contents of his witness statement filed in this action and adopted the same as his evidence in chief.  I note that although he had adopted the contents of the 1^st defendant’s witness statement dated 24^th September 2014 in his own witness statement, I don’t think the 2^nd defendant has personal knowledge of everything mentioned by the 1^st defendant in the latter’s witness statement.  Thus, he is not able to testify as to the truth of everything said by the 1^st defendant in the 1^st defendant’s witness statement.  This is particularly so since he testified that he had been living in rental properties apart from the 1^st defendant for quite some time before he purchased and moved to live in Room 1402, 14^th Floor, Block Q, Allway Gardens, Tsuen Wan, Hong Kong (“the Allway Gardens Property”) around September 2008.

68.The 2^nd defendant, now of the age of 50, said that in early 2008, he intended to purchase a flat because of rental hike, and brought this matter up for a discussion with the 1^st defendant.  He told the 1^st defendant that he lacked HK$200,000.00 for the down-payment.  The 1^st defendant told him that the Deceased had some spare money and he could ask the Deceased to lend him money for the down-payment.

69.In March 2008 when the 1^st defendant was in the mainland of China, he telephoned the 2^nd defendant, told him that he was with the Deceased in the Fogang House and let him talk to the Deceased over the phone.  Over the phone, the 2^nd defendant asked the Deceased to lend him HK$200,000.00 for the down-payment of the purchase and told the Deceased that the money borrowed would be repaid by monthly instalment of no less than HK$4,000.00 to the 1^st defendant.  In the same telephone conversation, the Deceased signified his agreement.

70.In cross examination, the 2^nd defendant said that it was the 1^st defendant who suggested to him that the money borrowed from the Deceased should be returned to the 1^st defendant since at any rate the 1^st defendant had to go to the bank to withdraw money for the Deceased.

71.When the 2^nd defendant asked the Deceased to lend him the money, he did not have any targeted property to purchase.  He only intended to purchase a property within the price range between HK$1.5 million and HK$1.8 million, and to obtain a bank loan to pay 90% of the purchase price.  The amount intended to borrow from the Deceased was on the high side to take into account the payment of stamp duty and other miscellaneous expenses incidental to the purchase.

72.The 2^nd defendant signed the provisional agreement to purchase the Allway Gardens Property at HK$1,520,000.00 around May 2008 and the formal sale and purchase agreement on 6^th June 2008.

73.The 2^nd defendant started repaying the Deceased in June 2008.  In view of his financial position, the 2^nd defendant could only afford to repay the loan by HK$5,000.00 per monthly instalment.  He had paid the 1^st defendant HK$5,000.00 cash every month.  He had paid a total of 40 instalments and his last instalment payment was made in September 2011.

74.Around September 2008, the 2^nd defendant moved to the Allway Gardens Property.

75.The 2^nd defendant remembered the meeting between the Deceased and the defendants at the Ko Wai Lau Property where the 1^st defendant told the Deceased that all his children would be responsible for the Deceased’s living expenses notwithstanding that the money in the HS Bank Account was depleted.  In cross examination, he denied that the Agreement was a fabrication to answer the plaintiff’s claim in this action.

76.In cross examination, the 2^nd defendant said that he did not witness the plaintiff assaulting the Deceased, and neither was he present when the Deceased and the plaintiff renounced their father-and-son relationship.

ISSUES A AND C

77.Before I resolve Issues A and C, I need to determine whether the relationship between the Deceased and the plaintiff had deteriorated and become so bad that the plaintiff had even on one occasion assaulted the Deceased, and whether the plaintiff had forced the Deceased to transfer the Tak Yan Building Property to him.

78.It is indeed a hard reality that family members, because of the need to strive for a better livelihood, have to leave their family and live apart in a place where they are total strangers.  This occurred to the Deceased and the plaintiff; the Deceased left his family for Hong Kong when the plaintiff was born only 100 days.  Because of political reason, the Deceased was not able to return to Fogang to see his family frequently.  Against this reality and background, it is natural that the relationship between the Deceased and the plaintiff was not close.  After the plaintiff came to Hong Kong, he lived together with the Deceased and the 1^st defendant’s family in the Ko Wai Lau Property and later moved to the Tak Yan Building Property.  The Tak Yan Building Property, a 2-room property, witnessed the reception of the plaintiff’s family, the breakup of the plaintiff’s first marriage, the plaintiff’s second marriage and the birth of the plaintiff’s children to his second marriage.  Throughout all those chapters of the plaintiff’s life, the Deceased was with the plaintiff and his family.  One would reasonably expect that the plaintiff and his family members would have disputes with the Deceased over some family matters, like the dispute over Kin Fai’s noisy music.  But I reject the case and the evidence of the defendants that the plaintiff had been violent to the Deceased and that the father-and-son relationship between the Deceased and the plaintiff had been deteriorated to such an extent that they formally renounced their father-and-son relationship before Mr. Ho.

79.I have heard the plaintiff and the 1^st defendant giving evidence on this aspect of the case.  I accept the plaintiff’s evidence as credible.  On the contrary, I reject the 1^st defendant’s evidence on the following grounds:-

(a) Although the 1^st defendant said that he did not see the plaintiff wielding a knife in front of the Deceased, that incident, he said, was the only assault he knew the plaintiff had committed against the Deceased.  When the 1^st defendant was confronted in cross examination with para. 14 of his witness statement where he alleged that the Deceased complained to Mr. Yau that the Deceased had been scolded and assaulted from time to time by the plaintiff, he attempted to explain that on those occasions of assault, the plaintiff only clinched his fist and did not use knife.  Therefore, he testified that the plaintiff had not assaulted the Deceased on those occasions.  Again, the 1^st defendant was not present when the plaintiff clinched his fist to threaten the Deceased.  When the 1^st defendant was further questioned, he varied his account as to whether the plaintiff had threatened the Deceased on those occasions.  In the end, he said that on those occasions, the plaintiff had only clinched his fist and had not threatened the Deceased. In my view, the 1^st defendant had been prevaricating all along.

(b) The 1^st defendant said that the Deceased fled to the Ko Wai Lau Property in his underpants after the plaintiff wielded a knife threatening to chop him.  It is incredible that the 1^st defendant would let the Deceased return to the Tak Yan Building Property in his underpants after 2 hours without even bother to see whether it would be safe for the Deceased to do so.  This was particularly so since, according to the 1^st defendant, there were previous incidents of “assault” and the relationship between him and the Deceased was very close.  It is equally incredible that after the “knife-wielding” incident, the 1^st defendant has not followed up on the incident for the well-being of the Deceased.  It is amazing to note that the 1^st defendant has behaved as if nothing detrimental to the Deceased has happened.

(c) Although, according to the tenor of the 1^st defendant’s witness statement, it was after the plaintiff and the Deceased had renounced their son-and-father relationship that the Deceased was forced to transfer the Tak Yan Building Property to the plaintiff, the 1^st defendant said quite the reverse in cross examination.  Plainly, it would be less probable if the plaintiff forced the Deceased to transfer the Tak Yan Building Property to him after they had renounced their father-and-son relationship.

(d) If the relationship between the plaintiff and the Deceased had been so bad as to coming close to a formal renunciation before a witness (Mr. Ho), the plaintiff would not have given the Deceased HK$375,000.00 as “養老金” for his future livelihood around that time.  I reject the case of the defendants that HK$375,000.00 was a consideration for the Deceased to transfer the Tak Yan Building Property to the plaintiff.  By reason of the terms of the Deed of Gift and the timeline of the things happening, it is improbable that HK$375,000.00 was a consideration for the transfer.  If the plaintiff was a violent and domineering person, he would not have allowed the sum of HK$375,000.00 to be paid to the Deceased first before the Deceased conveyed the Tak Yan Building Property to him almost 3 weeks later.  Furthermore, there was a suggestion during cross examination of the plaintiff that the reason to camouflage a sale of the Tak Yan Building Property as a gift was to save stamp duty.  I have some reservation about this suggestion as I suspect that the stamp duty chargeable on the sale of the Tak Yan Building Property would not be much.

80.I also reject the defendants’ evidence that the Deceased was forced by the plaintiff and had no alternative but to transfer the Tak Yan Building Property to him.  The defendants’ case on this aspect does not sit comfortably with the fact that the plaintiff first gave the Deceased HK$375,000.00 as “養老金” and after a lapse of almost 3 weeks, the Deceased arranged for the Deed of Gift to be prepared and signed by him and the plaintiff.  On the contrary, it is quite natural and indeed very probable that the Deceased intended to settle his affairs and gave the Tak Yan Building Property to the plaintiff who was his only son before he left Hong Kong for Fogang.  I do not accept that the reason why the Deceased returned to Fogang was that proffered by the defendants.

81.I find as facts that the plaintiff’s 2^nd wife and their children had returned to Fogang to visit the Deceased from time to time and the plaintiff’s 2^nd wife had also given pocket money to the Deceased when she visited him.  The plaintiff had to work hard to make ends meet and there was nothing unusual for the plaintiff having only visited the Deceased once with his family after the Deceased returned to Fogang.

82.Against the foregoing finding of facts, it is not probable that the Deceased had come to the Agreement with the 1^st defendant before the Deceased set off for Fogang.  An important feature of the Agreement was that the 1^st defendant would pay the Deceased’s living, medical, funeral and burial expenses[9] even after the HK$500,000.00 odd in the HS Bank Account had been depleted.  It is improbable that the 1^st defendant who was retired and of old age at that time would have undertaken such onerous obligations vis-à-vis the Deceased.  Also quite contrary to the pleaded case, the 1^st defendant testified that the Agreement was reached at the Ko Wai Lau Property after the Deceased and the 1^st defendant went to the bank to execute the Pro Forma Form.  Furthermore, if the Deceased had reached the Agreement with the 1^st defendant, the effect of which was to enable the 1^st defendant to use the money in the HS Bank Account as his own money as and when he thought fit and necessary, it would have been very easy for the Deceased to add the name of the 1^st defendant to the HS Bank Account and it would also not have been necessary for the defendants to obtain the consent of the Deceased before the 2^nd defendant borrowed HK$200,000.00 from the HS Bank Account for the down-payment.  According to the defendants’ case, the defendants found it necessary to ask the Deceased for consent to borrow HK$200,000.00 from the HS Bank Account.  In my view, it does not add up although the 1^st defendant in cross examination has given an explanation as to why he sought consent from the Deceased to the borrowing by the 2^nd defendant.  Put simply, I reject the defendants’ case and evidence on the Agreement.[10]

83.I find as facts the following:-

(a) Because of Kin Fai’s noisy music and his sleeplessness as a result, the Deceased decided to leave the Tak Yan Building Property for Fogang.

(b) Before the Deceased returned to Fogang,

(i) he asked the plaintiff for a sum of money as “養老金” for his future livelihood and the plaintiff gave him HK$375,000.00;

(ii) in order to settle his affairs, he engaged his solicitors to prepare for the execution of the Deed of Gift so as to transfer his entire interest in the Tak Yan Building Property to the plaintiff;

(iii) he arranged for the 1^st defendant to be added as an authorized person of the HS Bank Account for convenience, so that the 1^st defendant could remit the money in the HS Bank Account to the Deceased in Fogang at his direction when he was in need of money for his living expenses in Fogang;

(iv) he and the 1^st defendant executed the Pro Forma Form in the presence and with the advice of a bank staff in January 2005; and

(v) also for convenience, he gave the 1^st defendant his bank passbook for the latter’s safe custody and operation of the HS Bank Account.

(c) As at the time when the Deceased and the 1^st defendant executed the Pro Forma Form, the bank balance of the HS Bank Account stood at HK$509,227.94 made up of the HK$375,000.00 “養老金”.

84.I have been reminded that no particular form of expression is necessary for the creation of a trust if, on the whole, it can be gathered that a trust was intended, and that it is even not necessary for the settlor to use the word “trust”.[11]  By appointing the 1^st defendant as the authorized person to operate the HS Bank Account and giving the bank passbook to the 1^st defendant, the Deceased has given the 1^st defendant access to operate his repository, and, in my view, vested the bank balance of the HS Bank Account in the 1^st defendant on a bare trust.  The 1^st defendant was only authorized to withdraw the money from the HS Bank Account as directed by the Deceased for the latter’s living expenses.

85.Accordingly, I hold that the 1^st defendant was at the material time a bare trustee of the bank balance of HK$509,227.94 in the HS Bank Account.

ISSUES B, D AND E

86.The defendants said that before the transfer of HK$200,000.00 from the HS Bank Account to the D2’s Bank Account, they had obtained the consent from the Deceased to such a transfer and had informed the Deceased of the reason why such a sum of money was required by the 2^nd defendant.  They both said that the nature of the transfer was a loan advanced by the Deceased to the 2^nd defendant so as to enable the 2^nd defendant to pay the down-payment for the purchase of a real property, and that the 2^nd defendant had repaid the HK$200,000.00 loan by 40monthly instalments to the 1^st defendant[12].

87.As I have observed, this important part of the defendants’ case on the transfer of HK$200,000.00 has not been pleaded in their Defence.  This part of the case of the defendants only has its first appearance in the witness statements of the defendants both dated 25^th September 2014.  In their witness statements, the defendants both said that the 2^nd defendant had repaid not less than HK$4,000.00 per month directly to the 1^st defendant.  If the truth were that the 2^nd defendant had made full repayment of the loan by 40 monthly instalments of HK$5,000.00 each no more and no less, the defendants would have said so in their witness statements.  It is also surprising to note that the defendants have produced no documentation whatsoever to support any of the 40 monthly HK$5,000.00-instalments.  Although, according to the defendants, all the 40 monthly instalments were paid by cash, there might be record showing how the 2^nd defendant got the HK$5,000.00 to pay each monthly instalment.

88.The defendants’ case and evidence on the transfer of HK$200,000.00 from the HS Bank Account to the D2’s Bank Account is not credible at all.  As I have opined, this aspect of the defendants’ case is also inconsistent with their case regarding the Agreement under which the 1^st defendant could have regarded the money in the HS Bank Account as his own money, and could use it as and when he thought fit and necessary.  Unhesitatingly, I reject their case and evidence on this aspect.

89.I am also driven to reject the defendants’ case that the 2^nd defendant has fully repaid the HK$200,000.00 loan by 40 monthly HK$5,000.00-cash-instalments.

90.On the withdrawal of HK$85,000.00 from the HS Bank Account on 26^th February 2011[13], the 1^st defendant’s evidence was that he was instructed by the Deceased to withdraw all the money from the HS Bank Account so that he could apply for the admission of the Deceased to one of the government-run elderly homes in Hong Kong, and that he had forgotten to do so until the Deceased was brought back to Hong Kong for medical treatment in February 2011.  Again, this part of the defendants’ case has not been pleaded.  In cross examination, the 1^st defendant admitted that after the withdrawal of HK$85,000.00, he had not applied for the admission of the Deceased to any elderly home, let alone government-run elderly home.  If the reason why the 1^st defendant withdrew HK$85,000.00 from the HS Bank Account was to assist the Deceased in applying for a place in one of the government-run elderly homes, it is odd that after the withdrawal of the money, the 1^st defendant had not taken any step to carry out the instruction of the Deceased.  The 1^st defendant was taxed on this improbability and changed his evidence[14] during cross examination.  I do not believe the 1^st defendant’s evidence on this aspect of the defendants’ case.  Accordingly, I reject the 1^st defendant’s case on the withdrawal of HK$85,000.00 from the HS Bank Account.

91.Having rejected the defendants’ case, I find as facts that the 1^st defendant was in breach of trust and fiduciary duty by:-

(a) transferring the HK$200,000.00 from the HS Bank Account to the D2’s Bank Account on 28^th May 2008; and/or

(b) withdrawing the HK$85,000.00 from the HS Bank Account on 26^th February 2011.

92.I also find that the aforesaid transfer and withdrawal were not for the use and benefit of the Deceased.

93.For completeness sake, I do not accept the defendants’ case advanced in paras. 53-56 of the 1^st defendant’s witness statement that the 1^st defendant has overspent HK$509,227.94, i.e. the amount of money in the HS Bank Account (at the time when the Deceased and the 1^st defendant executed the Pro Forma Form) for the use and benefit of the Deceased.  The 1^st defendant’s evidence on this aspect is, to say the least, inconsistent, confusing and evasive. Furthermore, according to para. 53 of the 1^st defendant’s witness statement, the 1^st defendant had spent HK$66,000.00 in 2007.  But according to the passbook for the HS Bank Account, the 1^st defendant only withdrew HK$35,000.00 from the HS Bank Account for the Deceased. There was no reason why the 1^st defendant had to use his own resources to pay for the Deceased when the HS Bank Account had a credit balance which was more than sufficient to pay for the excess.  The same occurred in the subsequent years, and more so in 2009 when the 1^st defendant, according to para. 53 of the 1^st defendant’s witness statement, had spent HK$86,000.00, but according to the passbook for the HS Bank Account, had not withdrawn any money from the HS Bank Account.

ISSUE F

94.The plaintiff’s claim against the 2^nd defendant is twofold:-

(a) Knowing or unconscionable receipt; and

(b) Dishonest assistance.

95.A claim for knowing or unconscionable receipt requires the following to be established[15]:-

(a) Assets held under a trust or fiduciary relationship;

(b) A transfer of those assets in breach of that trust or fiduciary relationship;

(c) To a third party who beneficially receives those assets (i.e. for its own sake and not as agent for others); and

(d) In circumstances where the recipient’s knowledge of the particulars of the transfer is such that it would be unconscionable to permit that party to retain those assets.

96.A claim for liability for dishonest assistance requires the following elements to be established[16]:-

(a) There must be a trust or fiduciary relationship;

(b) That trust or fiduciary relationship must have been breached;

(c) That breach must have been procured, induced or assisted by the defendant; and

(d) The defendant must have acted dishonestly[17] in so acting.

97.Liability for dishonest assistance derived from the defendant’s wrongful conduct in assisting a breach of trust or fiduciary duty whereas the liability for unconscionable receipt arose from the receipt of trust monies.

98.As I have found that the 1^st defendant was in breach of trust and fiduciary duty to transfer the HK$200,000.00 from the HS Bank Account to the D2’s Bank Account.  It is also beyond dispute that the 2^nd defendant was in receipt of the HK$200,000.00 credit in the D2’s Bank Account on 28^th May 2008.

99.On the evidence transpired and accepted by me, I find that the 2^nd defendant knew (a) that the money in the HS Bank Account was the Deceased’s money, (b) that the 1^st defendant was only authorized to withdraw the money from the HS Bank Account as directed by the Deceased for the latter’s living expenses in Fogang, (c) that the 1^st defendant stood in a fiduciary relationship with the Deceased and held the Deceased’s money/credit balance in the HS Bank Account as bare trustee for the Deceased, and (d) that the HK$200,000.00 was not transferred to the D2’s Bank Account for any authorized purpose.

100.Accordingly, I hold that to receive the HK$200,000.00 from the HS Bank Account for a purpose other than the authorized purpose and without the consent of the Deceased must be dishonest and unconscionable, and that the 2^nd defendant is liable to the estate of the Deceased for knowing/unconscionable receipt and dishonest assistance.

CONCLUSION

101.In view of my findings, I hold the following:-

(a) that the 1^st defendant is liable to compensate the estate of the Deceased in equity the sums of HK$200,000.00 and HK$85,000.00; and

(b) that the 2^nd defendant is liable to compensate the estate of the Deceased in equity the sum of HK$200,000.00.

102.Accordingly, I give judgment in favour of the plaintiff:-

(a) against the 1^st defendant and the 2^nd defendant jointly and severally for the sum of HK$200,000.00 with interest at judgment rate from the date of writ until payment; and

(b) against the 1^st defendant for the sum of HK$85,000.00 with interest at judgment rate from the date of writ until  payment.

103.I will further make a costs order nisi that the defendants do pay the plaintiff’s costs of the action, with certificate for Counsel, to be taxed on the usual party-and-party basis if not agreed.  The plaintiff’s own costs are to be taxed in accordance with the Legal Aid Regulations.

104.Last but not least, I thank counsel for their assistance.

Mr. Eric Yao, instructed by Choi, Leung & Associates, for the plaintiff

Miss Maria So, instructed by Wong & Co, for the 1^st and 2^nd defendants