Fung Oi Ha v. Fung Pui on and Another
Read the full judgment text of HCA 17/2012 on BabelCite. This High Court CFI judgment was delivered on 6 June 2016.
1. Before the court is a dispute between siblings over the beneficial ownership and use of the family home.
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HCA 17/2012 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 17 of 2012 ____________________
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____________________ J U D G M E N T 1.Before the court is a dispute between siblings over the beneficial ownership and use of the family home. BACKGROUND 2.The factual background from which such dispute arose, which is uncontroversial unless otherwise indicated, can be stated as follows. THE FUNG FAMILY 3.Mr Fung Kau (封九) (“Father”) (whose estate represented by Mr Fung Pui On (“Pui On”), his son and the 1st Defendant, has been joined as the 2nd Defendant so that it would be bound by the outcome of this action[1]) and his wife, Madam Lo Yuk Ching (“Mother”), had 5 children (“Children”) in the following order of seniority:
Acquisition of the suit premises 4.Immediately prior to the acquisition of the suit premises, the Fung family comprising Father, Mother, the Children (except Pui On who had been studying in Canada since about 1980) and Father’s mother, Madam Wat Kim (“Grandmother”), lived at 5th Floor, 23A Luen On Street, Kwun Tong, Kowloon, a property owned by Grandmother. It is left unclear whether Father was a co-owner despite suggestion to that effect to Oi Ha in cross-examination. 5.By an Agreement for Sale and Purchase dated 20 January 1984 and an Assignment dated 5 March 1984, Father and Mother (“Parents” collectively) acquired as joint tenants the property known as 3rd Floor, 205 Tung Choi Street, Kowloon (“Property”) at $280,000 which was paid without the need for mortgage financing and which, according to the terms of the said Agreement for Sale and Purchase, were payable as follows:
Occupation of the Property and acquisition and use of other properties by members of the Fung family 6.The Fung family (except Pui On) moved into the Property in about May/June 1984 after having some renovations done to the same. 7.Pui On returned to Hong Kong and started to live at the Property sometime in 1987 after he graduated from university in Canada. 8.Oi Sheung left Hong Kong in about 1992 to further her studies in the UK after having won a scholarship. Grandmother also moved out in either 1992 to take up residence at a home for the aged (according to Oi Ha) or in 1993 to live with her other children (according to Pui On). 9.Even so, the Property was overcrowded with so many adult residents. Pui On did not have his own room and had to camp on the sofa in the living room. 10.By an Agreement for Sale and Purchase dated 6 June 1992 and an Assignment dated 25 February 1993, Father, Oi Chun, Pui On and Oi Yin acquired as joint tenants Unit G, 12/F, Wah Fung Garden, 274 Lai King Hill Road, Kwai Chung, New Territories (“Wah Fung Garden Flat”) at $1,788,000. The payment of the price and the costs and expenses incidental to purchase was financed partly by a mortgage loan of $1,000,000 from Hang Seng Credit Limited. The balance came from contributions by Father ($600,000 odd), Mother ($100,000) and the 3 children Oi Chun, Pui On and Oi Yin ($50,000 each). Oi Chun, Pui On and Oi Yin moved into the Wah Fung Garden Flat after completion, leaving the Parents and Oi Ha at the Property. While living at the Wah Fung Garden Flat, Oi Chun, Pui On and Oi Yin would each contribute $4,000 a month. Out of the monthly sum of $12,000 so collected, $8,000 odd would be used to repay the mortgage loan while $2,000 and $800 odd would be given to Father and Mother respectively as repayments of their said contributions. They also shared the other household expenses. 11.Oi Sheung returned to Hong Kong in 1994 and resumed residence at the Property until 2000 when she left again upon getting married. 12.Mother passed away on 28 May 1995 whereupon the Property became vested solely in Father by operation of the doctrine of survivorship. 13.By an Agreement for Sale and Purchase dated 27 February 1996 and an Assignment dated 29 March 1996, Oi Ha and Oi Yin acquired as joint tenants Flat C, 14/F and Roof, Ka Yee Mansion, 84-88 Prince Edward Road West, Kowloon (“Ka Yee Mansion Flat”) at $1,380,000, which was paid with the use of their own funds and with the assistance of a mortgage loan from The Chase Manhattan Bank National Association. 14.There is a dispute as to whether Oi Ha had moved out of the Property from 1996 to about June 2004 to live at the Ka Yee Mansion Flat. According to Pui On, she did because of her poor relationship and frequent quarrels with Father. Oi Ha, however, maintains that she had never lived at the Ka Yee Mansion Flat which was rented out from time to time until it was disposed of in April 2008 at a loss for $950,000. 15.In the meantime, in about 1994/1995, Oi Chun had emigrated to Canada where she has since remained. Oi Yin followed suit in 1997. The Wah Fung Garden Flat was disposed of in the first quarter of 1997 at $2,450,000. Pui On repaid Oi Chun and Oi Yin their contributions but not the Parents. He was apparently allowed to keep the balance of the proceeds of sale which he then applied to purchase in his sole name a new residence for himself at Sceneway Garden. Oi Yin returned to stay at the Property for a brief period in 1997 after the sale of the Wah Fung Garden Flat and before she went to Canada. 16.Oi Yin resettled in Hong Kong and returned to live at the Property in 2002. 17.Then, by an Agreement for Sale and Purchase dated 14 June 2004 and an Assignment dated 19 February 2005, Oi Ha and Oi Yin acquired as joint tenants Flat G, 18/F, Block 22, Park Island, 8 Pak Lai Road, Ma Wan, New Territories (“Park Island Flat”) at $2,415,400. Father contributed $200,000 towards the payment of the deposit of $600,000 but declined to be registered as an owner because of his old age. The balance was paid with the use of a mortgage loan from The Hongkong and Shanghai Banking Corporation. There is a conflict as to whether and, if so, the extent to which Oi Ha and Oi Yin had lived at the Park Island Flat from 2005 to 2009. Pui On suggests that Oi Ha and Oi Yin did move to the Park Island Flat after completion. According to Oi Ha and Oi Yin, the building of which the Property forms part has no lift and Father found it difficult to negotiate the stairs up and down the 3rd floor after suffering successive strokes in August 2003 and February 2004. He therefore asked Oi Ha and Oi Yin to find him a new residence with lift access. They had looked at numerous places before Father finally approved of the Park Island Flat when the development was still under construction. However, Father changed his mind after staying just one night at the Park Island Flat and insisted on returning to the Property the next day. As Father had by then become unable to take care of himself, Oi Ha and Oi Yin had to follow suit. However, in case he changed his mind again, the Park Island Flat was left vacant save for a period of 3 months in 2008 when Oi Ha and Oi Yin moved there temporarily while the Property was undergoing renovation. The Park Island Flat was rented out in 2009. 18.In the meantime, Father had started to attend a day care centre on Mondays, Wednesdays and Fridays and have meals delivered to him at the Property by social/voluntary workers on Tuesdays and Thursdays since August 2005. This continued for about a year until August 2006 when his attendance at the day care centre was extended to all weekdays. In about July 2007, Father was admitted to a home for the aged namely, the Eternal Elderly Home. 19.As at the trial of this action, only Oi Ha and Oi Yin were still living at the Property. Deteriorating health and death of Father 20.Father suffered a stroke on 28 August 2003 when he was about 75 years old. He was hospitalised until 11 October 2003. As a result of his stroke, Father suffered from hermiparesis of his left upper and lower limbs and need to walk with a walking stick. 21.In February 2004, Father suffered a second stroke for which he was hospitalised for about a month. 22.In about June 2004, he was first diagnosed as suffering from the early stage of dementia. Execution of wills and dispositions of the Property by Father 23.It appears that Father first made a will (“1996 Will”) on 28 May 1996. The 1996 Will was prepared by Messrs Bobby Tse & Co and its execution formally attested by a solicitor and trainee solicitor of that firm. There is a disagreement as to when Oi Ha became aware of the existence of the 1996 Will. According to Pui On, Oi Ha, Pui On and Oi Yin were all present on the occasion when Father made the 1996 Will. Pui On received the original of the 1996 Will and had at Oi Ha’s request given her a copy to keep. Both Oi Ha and Oi Yin deny being present when Father signed the 1996 Will or having been given a copy of the same. Oi Ha gave evidence that she first became aware of the existence and contents of the 1996 Will when she found it in a drawer at the Property when she went through Father’s papers after he suffered his first stroke in 2003. Oi Yin says she first knew of the 1996 Will on an occasion after Father’s first stroke in 2003 when he talked to her about arrangements of his property and showed her the 1996 Will. 24.By the 1996 Will, Father appointed Pui On as the sole executor of his estate (Clause 1); directed that his body should not be cremated but buried (Clause 2) and divided his estate into 10 shares which he then bequeathed as to 3 shares to Oi Ha (whose name had been misspelt as “Fung Oi Har”), 4 shares to Pui On and 3 shares to Oi Yin (Clause 3). 25.The 1996 Will did not make specific mention of the Property. At this point, subject to Oi Ha’s claim to a share of the beneficial interest in the Property, Father’s estate would prima facie include the Property. 26.On 13 August 2005, Father executed a new will (“2005 Will”), prepared by Messrs Hau, Lau, Li & Yeung (“HLLY”) and witnessed by their Ms Lam Man Kuen (“Ms Lam”), solicitor, and Mr Lai Wing Fai, legal executive. Apart from Pui On, Oi Yin says that she was also present when Father signed the 2005 Will though Pui On cannot recall Oi Yin’s attendance. However, there is no dispute that Oi Ha did not attend the signing of the 2005 Will. According to Oi Ha, she became aware of the 2005 Will shortly after its execution when Oi Yin showed her a copy of the document in about September 2005. 27.On its face, the 2005 Will was in the same terms as the 1996 Will save for the deletion of the direction for contained in Clause 2 of the 1996 Will that after his death Father’s body should be buried and not cremated and the correction of the spelling of Oi Ha’s English name. 28.There is some confusion as to what prompted the 2005 Will. Apparently, on the 10th anniversary of Mother’s death, in 2005, the remains of Mother, who was buried, were required to be exhumed and cremated. This put Father off the idea of a burial so that he wanted to delete Clause 2 of the 1996 Will. However, it has also been suggested that Oi Ha (who denies this) that she instigated the making of the 2005 Will. 2 reasons are given as to why Oi Ha would want to do so. First, she wanted the spelling of her English name in Clause 3 corrected. Second, Oi Ha had become suspicious that Father had entered into a relationship with a woman in mainland China after Mother’s death. Although such suspicion was never confirmed, Oi Ha remained worried over the years that Father might have married the woman or even have children with her and that such woman and/or children might make a claim to Father’s estate after his death. It was thought that the making of a new will by Father might pre-empt or defeat such claim. 29.As in the case of the 1996 Will, the 2005 Will did not make specific mention of the Property. Subject to Oi Ha’s claim to a share of the beneficial interest in the Property and but for the disposition in favour of Pui On to be mentioned in the next paragraph, Father’s estate would prima facie include the Property. 30.However, on the same day as the execution of the 2005 Will, by an Assignment dated 13 August 2005 (“2005 Assignment”), also prepared by HLLY, Father as vendor assigned to himself and Pui On as purchasers holding as joint tenants the Property for a stated consideration of $500,000, which was in fact not paid so that the transaction was in effect a gift of an interest in the Property as a joint tenant from Father to Pui On. With the 2005 Assignment, in the event of Father’s death, the entire interest in the Property would pass to Pui On by operation of the doctrine of survivorship. 31.It has been a matter of serious contention between the parties as to whether Oi Ha and Oi Yin were privy to this transaction. 32.Pui On, on the other hand, claims that Father, being a very traditional Chinese man, had long made known his wish to give the Property (the family home since 1984) to Pui On, his only son. In fact, they had explored means of achieving this with Messrs Bobby Tse & Co at the same time when the 1996 Will was being prepared. The idea was however not carried forward in 1996 because of the then relatively high property prices and therefore high transaction costs such as stamp duty and solicitors’ fees. As Father was then still in good health, they decided to wait. However, over the years, Oi Ha had from time to time nagged Pui On to take action to have his name added to the Property because of her abovementioned suspicion about Father’s liaison with a mainland Chinese woman. Eventually, in 2005, when the suggestion of having a new will made by Father came up, Pui On asked Father to convey the Property to him. To save on the transaction costs, it was resolved that the assignment should take the form of a transfer from sole ownership by Father into a joint tenancy of Father and Pui On. 33.Both sisters flatly deny having knowledge of the 2005 Assignment until after the present dispute with Pui On had arisen and Oi Ha conducted an online land search on the Property in about November 2011. Although Oi Yin was present when Father signed the 2005 Will, she says that she was told by Pui On to leave first as he had other matters to attend to at the solicitors’ offices and that he would take Father home afterwards. Oi Yin was therefore not present when Father signed the 2005 Assignment. According to Oi Ha and Oi Yin, save that Pui On was the only child accorded the luxury of an overseas education supported by the Parents, Father did not particularly favour Pui On and had no reason to give the whole of the Property to him. They also consider the 2005 Assignment to be inconsistent with the terms of the 1996 and 2005 Wills which dealt with all of Father’s real and personal property whatsoever and wheresoever, which would include the Property. They accuse Pui On of concealing the 2005 Assignment from them. 34.To complete this account, by an Assignment dated 17 October 2011 (“2011 Assignment”), Father and Pui On as vendors assigned to Pui On as purchaser the Property for a stated consideration of $950,000. This stated price was in fact not paid. Father had at the same time signed a note written in Chinese in the following terms: “本人願意把金額九十五萬不用收取，全數金額送給封沛安”. So again the transaction was in effect a gift by Father of his interest in the Property to Pui On. 35.Pui On admits that he procured Father to transfer his remaining interest in the Property to him in view of the prospect of a profitable disposal of the Property that had arisen in the last quarter of 2011 and the deterioration of his relationship with Oi Ha as a result. According to Pui On, he initially thought of asking Father to give him just a power of attorney authorising him to sign all the documents for the sale on his behalf. He consulted HLLY’s Ms Lam. Ms Lam advised that Father should consider simply transferring his remaining interest in the Property to Pui On after hearing from Pui On that he had “observed some unusual acts on the part of [Oi Ha] and he doubted that such acts might be driven by some ulterior motive”. Beginning of dispute between siblings 36.In this connection, shortly before the 2011 Assignment, a developer, Silver Grant Development Limited (“Developer”), had by notices dated September 2011 expressed interest in acquiring various properties along Tung Choi Street. First meetings were held among the owners of the properties targeted by the Developer on 15 October 2011 (which Oi Ha and Pui On both attended) and between those owners and the Developer on 23 October 2011 (which Oi Ha, Pui On and Oi Yin all attended). At one point, the Developer indicated that it was prepared to offer $4,516,000 for the Property if it could acquire not less than 91% of 205-209 Tung Choi Street. 37.Pui On was unhappy about the keen interest that Oi Ha and Oi Yin were taking in the matter as he considered that it was none of their business. At a meeting at the Property on 13 November 2011, he asked his sisters not to interfere in the sale as the Property was his. According to Oi Ha, she questioned such assertion of ownership and retorted that the Property was Father’s or in Father’s name. 38.Further, although the Developer stopped ceased pursuing the acquisition sometime in 2012, Pui On had in consequence of the prospect of making a profitable sale of the Property, started to ask Oi Ha and Oi Yin to vacate the Property, which they have refused to do. 39.On one occasion, Pui On who then had keys to the Property turned up with a suitcase, intending to stay. Oi Ha and Pui On gave different accounts of what happened exactly on that occasion. But what is clear is that an altercation followed, with the result that Oi Ha changed the lock(s) of the Property. Despite a demand made by Pui On through Messrs W K To & Co’s letter dated 1 August 2012 to Messrs Choi & Liu, Oi Ha has refused to give Pui On duplicate(s) of the new key(s) to the Property. Commencement of litigation 40.On 5 January 2012, Oi Ha issued the Writ of Summons herein against Pui On to seek the following relief:
The counterclaim 41.Pui On disputes Oi Ha’s claims and counterclaims for the delivery up of vacant possession of the Property and damages for the loss and damage caused to him by Oi Ha’s refusal or failure to vacate the Property. Death of Father 42.Prior to the trial of this action, Father passed away on 15 March 2014 at the age of 86. OI HA’S CLAIM FOR A SHARE OF THE BENEFICIAL INTEREST IN THE PROPERTY & RIGHT TO LIVE THERE RENT FREE FOR LIFE Factual and legal bases of Oi Ha’s claim 43.The factual bases upon which Oi Ha claims a share in the beneficial interest in the Property and the right to live at the Property rent free for life can be broadly outlined as follows:
44.On such facts, Oi Ha rests her claim on the following 3 alternative bases:
The evidence and findings 45.I shall turn first to the facts and evidence. 46.As partly demonstrated by my above summary of the background, Oi Ha and Oi Yin on one hand and Pui On on the other contradict each other on numerous points. Many of these matters are on proper analysis of peripheral importance (save that a conclusion one way or another may perhaps function in generating an impression of the general credibility of the witnesses), or even immaterial, to the real questions that I have to decide. I have reviewed and considered all differences of this nature put to the witnesses in cross-examination and addressed in closing submissions by Counsel. However, to maintain the focus of this judgment, and with no disrespect to Counsel, I hope I can be forgiven for not setting out and resolving each and every point of disagreement between the witnesses and for addressing only those having a material effect on the findings that I have to make. 47.On this note, insofar as Oi Ha’s claim for a share of the beneficial interest in the Property and a right to live there rent free for life is concerned, the key witnesses are Oi Ha and Oi Yin. 48.Pui On (who was studying in Canada from 1980 to 1987) is admittedly not privy to the purchase of the Property by the Parents or the financial arrangements that the Parents made for that purpose. He can only try to cast doubt on his sisters’ testimony by making points such as that until the outbreak of the present dispute he had not been told by anyone in the family including Oi Ha that Father had borrowed money from Grandmother or anyone to finance the purchase of the Property or that the Parents had paid monies to Grandmother for repayment of any loans; that Grandmother had in fact been maintained by the Parents and would not have been able to lend the Parents such a large sum of money; and that Father had sufficient income and assets so that it was not necessary for him to borrow from Grandmother. With the exception of the matter of Father’s financial situation on which there is some objective evidence, I do not find these allegations by Pui On, without more, to be any more credible or reliable than those made by Oi Ha and Oi Yin. It is basically a situation of “he says she says”. Further, apart from Father’s financial situation, the other matters spoken of by Pui On are in any event too circumstantial to be of real help to me. 49.However, it does not follow from the defence’s inability to adduce direct contrary evidence that I have to accept Oi Ha’s and Oi Yin’s evidence without question. 50.To the contrary, I am very mindful of the fact that the bulk of Oi Ha’s and Oi Yin’s testimony are made up of bare assertions, the veracity of which I cannot gauge or test against any documentary evidence or undisputed/indisputable facts and circumstances of the case. Of course, I am not saying that the court cannot or should not act on oral evidence alone. Indeed, the court is entitled to, and often does, accept the oral testimony of a witness, but only where it is able to form a favourable view of the witness’ credibility and reliability. In the present case, I see the need to scrutinise Oi Ha’s and Oi Yin’s evidence with great care and I am in the final analysis not persuaded that their evidence is either reliable or sufficient. 51.To explain, I need to set out how Oi Ha’s case has unfolded over the years. The starting point is the matters that she sought to put on the record in her letter before action, a letter dated 20 December 2011 from Messrs Choi & Liu to Pui On. Paragraphs 1 to 7 of that letter read as follows:
52.Oi Ha then formally articulated her case in the Statement of Claim indorsed on the Writ of Summons dated 5 January 2012 as follows:
53.For the sake of completeness, at Pui On’s requests, Oi Ha provided further and better particulars of the Statement of Claim on 24 February and 29 August 2012. Insofar as it is material for present purpose, Oi Ha added the following:
Oi Ha, however, refused to answer whether there were receipts for the Loan or the monthly repayments, saying that it was a request for evidence to which Pui On was not entitled by way of particulars of pleading. 54.Then, on 12 November 2012, Oi Ha filed her Witness Statement dated 6 October 2012, setting out, inter alia, the following:
55.On 23 May 2014, Pui Ha was granted leave to amend the Writ and the Statement of Claim. Apart from the joinder of Father’s estate as the 2nd Defendant, the only amendment effected was to add “the Plaintiff’s mother” after “the Plaintiff’s father” so that there were 4 persons said to be contributing to the repayment of the Loan to Grandmother. 56.It can be seen that Oi Ha’s factual case has evolved and changed in the following crucial aspects even before her testimony in court:
57.As it turns out, Oi Ha personally had nothing to do with borrowing the Loan from Grandmother or making repayment of the same to her. She was not present on the occasion when Grandmother was approached for and agreed to the Loan or on any of 48 to 60 monthly occasions over the 4 to 5 years following the purchase when repayments were made to Grandmother. According to Oi Ha’s evidence in court, she learnt of the borrowing of the Loan because Mother told her and Oi Chun so and asked them to help with the repayment after securing the Loan from Grandmother (though this conversation was mentioned in the Amended Statement of Claim or Oi Ha’s Witness Statement). It is also Oi Ha’s evidence in court that she in fact never knew how much the Parents borrowed from Grandmother or how much was repaid to Grandmother every month. She claims to have asked Mother but she would not tell her. In this regard, the statements made in the Further and Better Particulars of the Statement of Claim that Oi Ha “has no recollection” can be regarded as misleading. 58.I am unimpressed by the fact that Oi Ha initially saw fit to make assertions as to the amount of the Loan and the amount of the monthly repayments without any knowledge thereof and without making clear that she has no personal knowledge of the borrowing and repayment of the Loan or disclosing the source(s) from which she asserted these matters. 59.I do not accept Oi Ha’s explanation that she was not in possession of all the relevant information at the times of the letter before action and the Statement of Claim. First, one does not just make up figures because one does not have the necessary information. Second, I cannot see what further information Oi Ha has come into possession of since the despatch of the letter before action or the issue of the Writ of Summon herein. 60.Nor can I follow the logic of the “deduction” that is said to lead Oi Ha to arrive at the monthly repayment figure of $6,000 first pleaded in the Statement of Claim. According to Oi Ha, she started with the assumption that a sum of $250,000 was borrowed from Grandmother. Repayment took 4 to 5 years from about May 1984 to 1988. And there were 4 shares. With these, she then leaped to the conclusion that the monthly repayments should be about $6,000 each. When it is pointed out to her by the court that $250,000 divided by 5 years would give $4,167 per month and divided by 4 years would yield a monthly sum of $5,208, Oi Ha responds that Grandmother charged interest but she does not know at what rate or in what amount. My impression is that it is pure guesswork. 61.The net effect of Oi Ha’s evidence is that:
62.With regard to the second-mentioned difficulty, I have to assess whether Mother did tell Oi Chun and Oi Ha as alleged and, if so, what weight I should attach to such hearsay evidence. 63.There is really very little objective material before me to go on. The only exception is perhaps Father’s financial position. Oi Ha and Pui On have painted markedly different pictures of Father’s work and income. 64.According to Oi Ha, at the time of the purchase of the Property, Father worked as a chef at the staff canteen at Wenweipo (文匯報). The pay was not high and Mother had to supplement the family income with low pay employment. Father retired from this job in 1988. Thereafter, he would only work at banquets at various restaurants on a casual and part-time basis. He would also prepare a snake feast at the teahouse union (茶居公會) once a year to help that organisation raise operation funds. He was paid very little for this annual one-off engagement. Father stopped working altogether in 2002. 65.In contrast, Pui On asserts in paragraph 4 of his Witness Statement that before 1983 Father ran a cooked food business at Oi Man Estate with a friend earning about $30,000 per month; that between 1983 and 1988, he worked as a cook at Wenweipo with a monthly income of about $10,000 to $20,000; and that Father continued to work as a freelance snake feast cook after his retirement in 1988. 66.In view of their obvious self-interests, I take both Oi Ha’s and Pui On’s evidence as to Father’s income with a pinch of salt. I am convinced by neither. In the case of Pui On, it became clear in the course of his cross-examination that he does not really know how much Father made. For the pre-1983 earnings, Pui On claims to have asked Mother who told him that the cooked food business was profitable yielding to Father a few tens of thousand dollars (幾萬蚊) every month but Mother was not more specific. He puts down $30,000 because of a Chinese saying “無三不成幾”. As for the 1983-1988 period, he had asked Father’s co-worker in Wenweipo (a Mr Ho) after 2011 and he was told that Father was paid about $10,000 per month by Wenweipo. When asked why he puts down $10,000-$20,000, he says it would mean that it was at least $10,000! 67.It is unnecessary for me to rely on either Oi Ha’s or Pui On’s testimony. Although I have not been presented with a complete picture of Father’s financial position in the 1980’s, there is no dispute that:
68.Given the agreement that Father retired from full-time employment in 1988, one would have expected the assets mentioned in the last paragraph, or the bulk thereof, to have been acquired and accumulated before his retirement in 1988. Further, given that there is no suggestion that Father came into some sudden fortune after the purchase of the Property (like hitting the Mark Six or receiving an inheritance), it may even be further inferred that some such assets were brought forward from before the purchase of the Property. 69.Indeed, Pui On has produced certificates of 11,024 shares in Hong Kong Electric Holdings Limited that were acquired by Father before or near the time of the purchase of the Property and that had been retained by Father up to the date of his death (and which formed only a part of Father’s share portfolio):
It is agreed between Oi Ha and Pui On that shares in Hong Kong Electric Holdings Limited were traded in January to March 1984 at between $2.83 and $3.88 per share, as shown in exhibit D1, giving this lot a total value of between $31,198 and $42,773. 70.Pui On has also produced proof of purchase of gold by Father: 4 taels at $14,100 on 1 November 1983; 2 taels at $8,004 on 10 August 1988 and another 2 taels in September 1988. For the sake of completeness, Oi Ha says that these gold nuggets did not all belong to Father. 71.In light of such undisputed evidence of Father’s finances, I am unable to picture Father borrowing a quarter of a million dollars from his elderly mother in 1984 and then repaying it over 4-5 years by monthly instalments of a few thousand dollars which he could only scrap together by pooling together the family resources from his wife and 2 eldest daughters who were apparently in modest employments. 72.As for the initial omission of Mother from the list of contributors, Oi Ha maintains that she has always known that Mother also contributed to the repayment of the Loan but cannot explain why she had left her out until she made her Witness Statement. 73.With regard to Oi Ha’s own contributions to the repayment of the Loan, I read Oi Ha’s said letter before action, pleading and witness statement as suggesting that she gave up a sum of $1,500 (out of a salary of $3,000) every month which was wholly applied to the repayment of Loan (as did Father, Mother and Oi Chun). This impression is reinforced when Mr Kelvin K H Liu, Counsel for Oi Ha, specifically draws my attention in his oral opening submissions to what Lord Bridge said in Lloyds Bank Plc v Rosset [1991] 1 AC 107 at 132G-133B (though to support an inference of the common intention required for the creation of a constructive trust from conduct):
74.The picture that emerges from Oi Ha’s testimony in court is quite different:
75.In support, Oi Ha has produced the passbooks of the savings account into which her monthly salary from her job with Wing Lung Bank Limited (which lasted from 7 October 1982 to 20 July 1985) were deposited. The following table sets out the credit and debit entries identified by Oi Ha as deposits of her salary and as withdrawals that included the contributions paid to Mother:
76.To put the withdrawals in context, Oi Ha would retain what she needed for her personal expenditure for the month (which was modest in the region of $100-$200 except when she had to pay tuition fees) before paying the balance over to Mother. Sometimes she would take out more to cater for special expenditure. An example given is Chinese New Year for purchase of new clothes etc. 77.The table in paragraph 75 shows that:
78.In view of the evidence given in court by Oi Ha, insofar as it may be necessary for Oi Ha to invite the court to infer the necessary common intention from conduct, Mr Liu has in his closing submissions noticeably shifted reliance from Lord Bridge’s above quoted statement in Lloyds Bank Plc v Rosset to Fox LJ’s judgment in Burns v Burns [1984] Ch 317 at 328H-329C:
Mr Liu seeks to bring his client’s case within the fourth of Fox LJ’s 4 categories of financial contributions. 79.Oi Ha has not, whether on pleading or in evidence, spelt out the exact interest that she is claiming. In his oral closing submissions, in answer to my question, Mr Liu contends for a 30% interest, which is said to be based on a total contribution of about $80,000 over a period of 4 years by Oi Ha. I note right away that Mr Liu is in effect asking the court to treat all the money that is claimed to have been paid by Oi Ha to Mother in the 4 years following the purchase of the Property as having been applied to the repayment of the Loan. This is clearly unsound, even on Oi Ha’s own evidence. 80.Lastly, there is also Father’s alleged representation that Oi Ha would have a share of the Property and could live at the Property for as long as she wished. Oi Ha’s evidence in court is that the first time Father said so was in August or September 1988 which was after the Loan had been fully repaid to Grandmother. This does not sit well with the answers given by Oi Ha to Pui On’s requests for further and better particulars of the Statement of Claim (see paragraph 53 above) and the impression induced by paragraphs 18, 44 and 54 of Oi Ha’s witness statement (see paragraph 54(9) above). 81.I have set out and analyse the evidence relevant to each of the components that make up Oi Ha’s case on the facts. Having regard to the reservations I have expressed above as to the nature, quality and contents of Oi Ha’s evidence, I am not satisfied on a balance of probabilities that the Parents purchased the Property with a loan from Grandmother. It follows that I am also not persuaded on a balance of the probabilities:
82.In so finding, I have not overlooked Oi Yin’s (corroborative) evidence that she understands:
83.I do not treat Oi Yin as a disinterested independent witness. Apart from Oi Ha, she is at present the only other resident of the Property to the exclusion of Pui On. She is also a 30% beneficiary of Father’s estate under Clause 2 of the 2005 Will. If Oi Ha should succeed in either of her claims, Oi Yin would also benefit. Her interest insofar as the Property is concerned is aligned with that of Oi Ha. 84.Oi Yin’s evidence, as summarised in paragraph 82 above, suffers from the same problems as Oi Ha’s. This is so because, like Oi Ha, Oi Yin has no personal knowledge of how the purchase of the Property was financed. She claims to have learnt about the borrowing of a loan from Grandmother and the repayment of such loan only from hearing Mother grumble on occasions about how Grandmother had been chasing her for the monthly instalments. She does not know how much was borrowed, how much was repaid per month and when full repayment was achieved. Oi Yin further says she knows that Oi Chun and Oi Ha assisted in repaying Grandmother because Mother told her so. I do not see how such evidence could improve Oi Ha’s case on the facts. 85.For the avoidance of doubt, I do accept that Oi Ha did continue to pay Mother a portion of her salary after the purchase of the Property. What I am unable to find is that these payments were applied to any extent to repay a loan used to finance the purchase of the Property. 86.For the sake of completeness, I have relatively little difficulty in accepting that Oi Ha, together with Oi Yin, have been discharging the outgoings and expenses of the Property since Father’s retirement. 87.Further, there is no question in my mind that, among the Children, Oi Ha was the person who took up the main responsibility of taking care of Father in poor health since his first stroke in August 2003. Effects of the findings 88.It should follow from my findings as set out in paragraph 81 above that Oi Ha’s claim for a share of the beneficial ownership of the Property and for the right to live at the Property rent free for life must fail on the facts. 89.However, in case this matter should be taken further and I be shown to have erred on my said findings, I hope my following analysis and observations would be of assistance. Constructive trust 90.With regard to Oi Ha’s claim under a common intention constructive trust, both Mr Liu and Mr Matthew Ho (for Pui On) adopt Godfrey Lam J’s formulation in Liu Wai Keung v Liu Wai Man [2013] 5 HKLRD 9 at [46] of the elements that a claimant has to be prove in order to establish a constructive trust in his favour. It is hence common ground that Oi Ha has to prove:
91.And as Godfrey Lam J continue to summarise at [47], [49] and [50]:
92.Oi Ha’s case of constructive trust is, in the first stance, grounded upon an express oral representation by Father that those of his children who had contributed to the repayment of the Loan (meaning Oi Chun and Oi Ha) would have shares in the Property and that they could, jointly with all their other siblings (who would necessarily include Pui On), also enjoy the use of the Property. 93.Even if I were wrong in rejecting Oi Ha’s evidence of such representation by Father, her case should still fail because, on her own case, the first time Father made the representation was in August or September 1988 after the Loan had been fully repaid to Grandmother. That being the case, it is not open to Oi Ha to say that she had relied on Father’s representation (even if made) in acting to her detriment by contributing to the repayment of the Loan (even if true) so making it unconscionable for the Parents and Pui On, as their successor-in-title, to assert ownership in reliance on their legal title to the Property. 94.Mr Liu has made it clear that, where necessary, as where the court rejects Oi Ha’s case based on an express agreement, arrangement or understanding with Father, he would invite the court to infer the common intention from conduct, the conduct relied on being initially Oi Ha’s (direct) contributions to the repayment of the Loan and payment of the outgoings of the Property, which was later shifted to her contributions to the household expenses which enabled the Parents to repay the Loan as well as discharge the outgoings of the Property. 95.Even if I erred in rejecting Oi Ha’s factual case on contributions, the law has moved on and away from focusing just on financial contributions. 96.In Stack v Dowden [2007] 2 AC 432 at 459 [69], Baroness Hale advocated a holistic approach and gave a long list of examples of factors relevant for establishing the parties’ intention for the purpose of a constructive trust (though in the context of joint legal ownership of a home):
97.Her Ladyship made it clear in [70] that this is not an exhaustive list. 98.This same holistic approach was applied by the Privy Council in a context where only the husband was registered as the sole owner of the property in Abbott v Abbott [2008] 1 FLR 1451. 99.In Hong Kong, see Chan Chui Mee v Mak Chi Choi [2009] 1 HKLRD 343 per Johnson Lam J at 350-351 [16]-[21]. 100.Given the multifactorial nature of the question of intention, just as there are cases where the proof of financial contributions by one who is not the legal owner or in excess of one’s share of legal ownership may readily justify the inference of an intention to share beneficial ownership, there would conceivably be instances where the establishment of financial contributions do not support the inference of a common intention to share beneficial ownership. I am inclined to think that this present case is just such an instance. 101.Each case turns on its own facts and circumstances and depends on its context. This is not a case involving a couple in a marriage or a marriage like relationship in which they set to build a life together so that in Baroness Hale’s words: “It will be easier to draw the inference that they intended that each should contribute as much to the household as they reasonably could and that they would share the eventual benefit or burden equally.” 102.The relationship with which I am concerned is that between parents and children in what appears to be a conventional Chinese family practising traditional family values. In such a setting, the parents raise and provide for the children until adulthood. It is then commonplace for the children, after they attain financial independence or some measure thereof, to share with the parents a portion of their income. This may be done for a variety of reasons. Sometimes, the children are acting out of natural love and affection for the parents. Sometimes, they are required to do so by the parents. Sometimes, they volunteer to perform their filial duties to the parents. Sometimes, they are motivated by a moral obligation to help with the care of younger siblings who are still at school. Sometimes, the burden of the family expenses may require sharing. The children’s contributions may or may not happen to be used to discharge mortgage loan payments and outgoings and expenses of the family home. I daresay, in a lot of these cases, the parents (and probably the children too) would be taken aback if they be told that, even in the absence of an express agreement or arrangement or understanding, the children’s contributions could be used to support the inference of an intention to share the beneficial interest of the parents’ property (which may be the parents’ only shelter in old age) if such contributions should happen to be applied toward the mortgage payments of the property. 103.In the present case, all 5 children of the Fung family were required to being home to Mother a portion of their income after they started gainful employment. It is clear from Oi Ha’s evidence that in increasing her contributions after the purchase of the Property, she was just obeying Mother and she never thought about the incidence of the beneficial ownership of the Property. Indeed, she stresses that she had not taken what Father said to heart even after he promised her a share of the Property. She continued to regard the Property as remaining entirely his to deal with in any way he liked. That was why Oi Ha did not think it strange that Oi Chun (who according to Oi Ha was a contributor to the repayment of the Loan) was left out from the 1996 and 2005 Wills. Father could have just changed his mind about who to give a share of the Property. The idea that she is a 30% beneficial owner of the Property did not take root in Oi Ha’s mind until she saw the 1996 Will. Had Father not included her in his wills or had he given her a smaller share, she would have just accepted it. Resulting trust 104.Despite the allegation of express representation and actual intention as to the incidence of the beneficial interest in the Property, should I reject the evidence on intention (whether actual or inferred) which I have done, Mr Liu also prays in aid the presumption of resulting trust which, he says, is raised by Oi Ha’s contribution to the repayment of the Loan to Grandmother. In this regard, Counsel refers me to Lord Browne-Wilkinson’s statement in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 at 708A-B:
105.Even if I have erred in rejecting Oi Ha’s evidence on her contributions to the repayment of the Loans, it cannot be stressed enough that the presumption arises upon proof of contribution to the purchase price only in the absence of evidence of the parties’ actual intention. The fact being presumed is that of the intention of the provider of the purchase-money. That being the case, there is no place for such a resulting trust if there is evidence of an actual intention on the part of the provider of the purchase-money to benefit the holder of the legal title. See Re Superyield Holdings Ltd at 106E-107E. I believe what I have said in paragraphs 102 and 103 above appears to me to be equally relevant to divining Oi Ha’s intention for the purpose of a resulting trust analysis. Proprietary estoppel 106.Turning then to Oi Ha’s further alternative case based on proprietary estoppel, Mr Liu accepts in the course of his oral opening submissions that Oi Ha’s claim to a share of the beneficial ownership of the Property based on the doctrine of proprietary estoppel would rise and fall together with such claim based on a constructive trust and clarifies that his reliance on this doctrine goes only to Oi Ha’s right to remain at the Property. 107.As noted by Lord Walker in Thorner v Major [2009] 1 WLR 776 at 786 [29], although there is not a comprehensive and uncontroversial definition of proprietary estoppel, there is general consensus that the doctrine is based on these 3 main elements (though variously expressed):
108.On this, Mr Liu also reminds me of what his Lordship had previously said in Gillett v Holt [2001] Ch 210 at 225C-E:
109.That said, Mr Liu however accepts that there must be a sufficient causal link between the promises relied upon and the conduct which constitutes the detriment: per Robert Walker LJ in Gillett v Holt at 230D and 232E-F. 110.Oi Ha relies primarily on her monetary contributions that are referable to the Property. Such case must fail in view of Oi Ha’s evidence in Court about the timing of Father’s promise to let Oi Ha stay at the Property for life. 111.Oi Ha also relies on the care that she had given to Father in the final 10 years or so of his life. However, there is no evidence or suggestion before me that Oi Ha took up Father’s case in return for the right to remain at the Property. OI HA’S CLAIM TO SET ASIDE THE 2005 AND 2011 ASSIGNMENTS Oi Ha’s locus 112.Mr Ho questions whether Oi Ha, not being Father’s personal representative, can challenge the validity of the 2005 and 2011 Assignments, the cause of action to recover the Property being vested in Father’s estate. This can be answered in 2 ways. 113.In Re Estate of Luk Kim Ying [2008] 5 HKLRD 743, the plaintiff sued in her personal capacity as a purported beneficiary of the deceased’s unadministered estate to recover properties said to belong to such estate. Jeremy Poon J held at [22]-[29] that what the plaintiff was entitled to in respect of her rights in the estate is a chose in action, capable of being invoked for any purpose connected with the proper administration of the estate. Whether the 2005 and 2011 Assignments should be set aside and the Property reverted back to Father’s estate is a matter that need to be determined for the purpose of properly administering Father’s estate. 114.Alternatively, I refer to Lewin on Trusts (19th Ed), p 2114 [43-006]:
And p 2115 [43-008]:
115.There is patently a conflict between the duty of Pui On as the executor of Father’s estate and his interest as the assignee under the 2005 and 2011 Assignments. That being the case, Oi Ha is entitled to sue in the derivative form for the setting aside of the 2005 and 2011 Assignments. Although this action has not been instituted as a derivative action, I propose to treat it as such. In this regard, Father’s estate has been joined as the 2nd Defendant so as to be bound by the outcome of this action. Ground for setting aside 116.In paragraphs 23 and 24 of his written closing submissions, Mr Liu questioned whether the 2005 Will or the 2005 Assignment had been properly explained to Father. 117.I am afraid such argument is not open to Oi Ha. Her case for the setting of the 2005 and 2011 Assignments is set out in paragraph 22 of the Amended Statement of Claim:
118.As I see it:
Agreed invalidity of the 2011 Assignment 119.Dr Chen (for Oi Ha) and Dr Edmund K W Woo (“Dr Woo”) (for Pui On) are in agreement that Father would be suffering from a moderate degree of dementia as at 17 October 2011 and that his mental capacity was likely to be compromised at the time when he executed the 2011 Assignment. Pui On does not contest this opinion. And I find Father mentally incapable of entering into the 2011 Assignment which should be set aside. 120.However, this conclusion does not assist Oi Ha as the 2005 Assignment, if valid, would operate to vest the Property solely in Pui On upon Father’s death on 15 March 2014 by operation of the doctrine of survivorship. 121.Hence, the issue remains whether Father was mentally incapable of entering into the 2005 Assignment. Whether proof of matters other than Father’s loss of capacity (such as Pui On’s knowledge of Father’s incapacity) is required? 122.Mr Ho urges upon me:
123.Imperial Loan Co v Stone and Hart v O’Connor are readily distinguishable on the basis that the transaction sought to be avoided in each of those cases was a contract. 124.Although the terms of the 2005 and 2011 Assignments suggest the exchange of values between Father and Pui On, the stated considerations were in fact not paid, and were not intended to be paid, by Pui On to Father. What were being intended were inter vivos gifts to Pui On of Father’s interest in the Property. 125.I have not been shown any authority that suggests that the donee of an inter vivos gift must have knowledge of the donor’s incapacity before the gift can be avoided. On the contrary, Deputy High Court Judge Nugee QC expressly rejected such a suggestion in Sutton v Sutton [2009] EWHC 2576 (Ch) at [40]. The editors of Chitty on Contracts (32nd Ed), Volume 1 similarly rejected such a proposition in §9-100. 126.In any event, if Father had been rendered incapable by reason of his dementia, I doubt if Pui On could have denied knowledge of such impairment. This is so because the doctor at Kwong Wah Hospital (“KWH”) who attended Father at the follow-up consultation on 28 September 2004 had recorded in his notes that Father was accompanied by his son (who must be Pui On); that he had explained in the son’s presence that Father was referred from Prince of Wales Hospital Psychiatric Department for early dementia; that he recommended a drug for the treatment of dementia and that Father agreed to try it. What must a donor of an inter vivos gift be capable of understanding? 127.There appears to be no fixed answer to this question and the Court will look at all the circumstances. 128.The leading authority is Re Beaney [1978] 1 WLR 770 in which Deputy High Court Judge Nourse QC said at 774E-F:
129.Similarly, in Masterman-Lister v Brutton & Co (Nos 1 and 2) [2003] 1 WLR 1511, where the issue was whether a plaintiff who had suffered serious injuries from an accident had the mental capacity to compromise a court action, Kennedy LJ, after referring to Beaney, said at [27] and [29]:
130.It may be useful to see how the principles in Re Beaneyhave been applied in practice. 131.In Re Beaneyitself, a mother gifted a house to her daughter shortly before her death. The Court found (at 772F) that the mother’s estate was worth £15,151, of which £14,600 represented the value of the house. The Court therefore concluded (at 773D and 774G) that it was necessary for the mother to understand not just that she was gifting her house to her daughter, but also that the transaction would deprive her other two children of any real interest in her estate. 132.In Bernard Pesticcio v Alan William Huet [2003] All ER (D), the court had to decide whether a mentally disadvantaged person (Bernard) lacked capacity when he gifted a house to his sister. Neuberger J found at [33] that the house represented over 90% of Bernard’s assets and, applying Re Beaney, held at [71]–[76] that Bernard must be capable of understanding (1) he was giving his house to his sister and (2) the effect of the transaction was that his mother (who was very close to Bernard) could be required to leave the house at any time. 133.In Sutton v Sutton, the deceased gifted his house to his son about 8 years before he died. DHCJ Nugee QC found at [9] that the house was the deceased’s principal (although not only) asset of value and, applying Re Beaney, held at [27] that the deceased must be capable of understanding not only that he was giving away his house to his son, but also that the effect of this would be to deprive himself and his wife (if he predeceased her) of any entitlement to the house or legal right to stay there. 134.In Gorjat v Gorjat [2010] EWHC 1537 (Ch), the deceased transferred, several months before he died, funds in his bank accounts into accounts held in the joint names of himself and his wife. Deputy High Court Judge Asplin QC recognised at [138] that (1) the funds represented “by far” the deceased’s “greatest asset” and (2) the transaction was not an outright gift because the deceased remained equally entitled to the balances in the accounts, albeit the wife would succeed to the entire balance. Therefore, applying Re Beaney, the Court held at [129] and [151] that it must be shown that the deceased understood (1) the nature and effect of the transaction, (2) the extent of the property to which the transaction related, and (3) the effect which the transaction would have upon his children who might hope to benefit on his death. 135.InRe Smith (deceased) [2015] 4 All ER 329, a mother gifted to her daughter proceeds of sale of a house about 18 months before she died. The court, following Re Beaney, found at [193]-[194] that the proceeds “very likely” represented a “substantial proportion” of the mother’s assets and that the gift would have the effect of largely depriving the beneficiaries under her existing will. The Court therefore concluded at [195] that the mother must be able to understand “all claims of all potential donees and the extent of the property she was disposing of, and the effect upon her own life”. 136.The parties have not adduced any independent evidence as to the open market value of the interest transferred by the 2005 Assignment. Nor have they given me a list of Father’s other assets and their values as at 13 August 2005. However, doing the best I can, what is available suggest to me that what passed under the 2005 Assignment was a very substantial asset of Father, especially if one takes into the account the effect of survivorship. In the circumstances, following the Re Beaney line of authorities, I hold that Father must be able to understand:
The last point would, I believe, incidentally address Mr Liu’s point that the 2005 Assignment was signed on the same occasion as the 2005 Will so that the 2 instruments should be viewed as constituting a single transaction. Was Father capable of understanding? 137.Oi Ha and Oi Yin have given evidence of various incidents and matters occurring after Father had suffered the second stroke in February 2004 which, they believe, demonstrate Father’s cognitive impairment. In particular, Mr Liu reminds me of the following in his closing submissions:
138.On the other hand, Pui On has mentioned instances in which Father’s behaviour can be said to be more consistent with a normal mental state. 139.I have duly reminded myself of such evidence and taken the same into account. However, I am also mindful that such contradictory accounts by the parties and witnesses in the context of hostile litigation would inevitably contain an element of subjectivity, sometimes even exaggeration. Some of the incidents mentioned, while disturbing, may have no or little relevance to the question at hand. An example is Father’s refusal to bathe and shampoo. As explained by Dr Woo, this is a behaviourial problem relevant to diagnosing dementia but is not indicative of and has no correlation with impairment in cognitive functions. The parties and witnesses’ accounts are also somewhat lacking in the precision needed for a reliable retrospective qualitative and quantitative assessment of the patient’s mental capacity on a particular day years in the past. 140.Fortunately, in this case, the court has a lot more to work on. Father’s deterioration was detected and addressed right from the start. In consequence, there is an abundance of medical records documenting the exact path of Father’s illness. Such objective contemporaneous records deserve to be accorded significant weight. 141.On this note, I turn to the medical evidence. The parties have placed the following medical evidence before me:
142.I have read and considered these reports. Dr Chen and Dr Woo have very helpfully set out in section A of their joint report Father’s medical history since his first stroke in August 2003 as revealed by the medical reports and records listed out in paragraph 141(1) to (7) above. It is not necessary for me to repeat the same. For present purpose, it is sufficient for me to highlight the information that is relevant to Father’s mental capacity in August 2005. 143.Father first underwent the Mini-mental State Examination (“MMSE”) in April 2004 while he was recuperating at the Wah Tai Sin Hospital after he suffered the second stroke in February 2004. On that occasion, he achieved the full score of 30/30. 144.Father was first found to have a significant deterioration in memory suggestive of early senile dementia at a screening test for senile dementia conducted by the psychiatrists at HKCU on 9 June 2004. He was referred to KWH for expert assessment and management. 145.Father was hospitalised at KWH from 3 to 11 October 2004 following a complaint of dizziness. He showed no abnormal neurological signs. He was administered the MMSE on 5 October 2004 with a score of 22/30.[3] More particularly, he failed completely the serial-7 subtraction subtest (which requires the subject to count down from one hundred by sevens for 5 times) and had minor errors in subtests of orientation, recall and constructional ability. CT and MRI brain scans showed no acute infarct but there was multi-infarct atrophy. He could walk unaided. 146.Father was seen at the Memory Clinic of KWH on 1 November 2004. A series of tests were administered.
The diagnosis was probable mild vascular dementia with a possible element of depression (though the geriatric depression scale was only 4/5). He was prescribed donepezil, an anti-dementia drug. 147.Father was admitted to KWH from 16 to 19 December 2005 for seizures. He had 2 episodes of loss of consciousness in the preceding 2 months. He was found to have impaired attention and responsiveness on the day of admission. Examination in hospital, however, showed that he was alert and oriented with a full Glasgow coma scale of 15/15. There were no focal neurological deficits. His score on the MMSE (administered by an occupational therapist) was 23/30. He failed completely in the serial-7 subtraction subtest and made 2 errors in the subtests of orientation. His Abbreviated Mental Test (“AMT”) score was 8/10. More particularly, he could indicate correctly his age, date of birth and address and the name of the hospital. He was oriented to person; he knew the date for the Mid-Autumn Festival and he could count backwards from 20 to 1. He could tell the time but not the year. He could not name the Chief Executive. 148.Dr Chen and Dr Woo agree that Father had dementia which was most probably due to a combination of cerebrovascular disease and Alzheimer disease. 149.And based on the MMSE score in the range of 21-23/30, they both place Father’s dementia at the mild stage around August 2005. 150.They however differ in their assessment as to whether Father had mental capacity for the purpose of executing the 2005 Assignment on and around 13 August 2005:
151.I prefer Dr Woo’s conclusion for the following reasons. 152.First, Dr Chen was not shown the 2005 Assignment at the times when he prepared his reports and it appears to me that he has proceeded on the basis that any legal documents are complex and difficult. However, Dr Chen does not see the need to reconsider his conclusion after being shown and explained the legal effects of the 2005 Assignment in court. I have set out in paragraph 136 above the matters that Father was required to understand in entering into the 2005 Assignment. I believe it is fair to characterise the 2005 Assignment as being relatively uncomplicated, though I readily acknowledge that this should in the final analysis be judged from the point of view of the person signing the same. 153.Second, apart from taking into consideration Oi Ha’s account of Father’s illness (along the same line as that set out in paragraph 137 above), Dr Chen based his assessment essentially just on Father’s repeated failure of the serial-7 subtraction subtest of the MMSE on 5 October 2004 (0/5) and 19 December 2005 (0/5). According to Dr Chen, such failure shows marked impairment in calculation and attention, which would significantly compromise the ability to manage complicated financial and legal tasks. 154.I am afraid I am not persuaded. 155.First of all, I accept Dr Woo’s evidence that Father’s failure of the serial-7 subtraction sub-test most probably reflects an impairment in calculation only and not attention.
156.That leaves only the impairment in calculation (which apparently fluctuated as Father scored 4/5 under the serial-7 subtest on 1 November 2004). On this, I accept Dr Woo’s opinion that an impairment in calculation by itself does not pose any limitation on one’s mental capacity. This seems to me to be a reasonable and logical view. Given the cut-score of 23/30 for a diagnosis of dementia, a failure to score any point in the serial-7 subtraction subtest (which carries 5 points) is not diagnostic of dementia if the test subject manages to gain full or near full marks under the other subtests. 157.Dr Chen’s approach in focusing on the score of just one of the subtests of the MMSE, a commonly used instrument in clinical practice to ascertain the presence and degree of impairment in the multiple domains that make up a person’s cognitive profile, inherently does not appeal to me. 158.In contrast, I see more sense in Dr Woo’s more holistic review by considering the following:
159.For these reasons, I find Father to have the necessary mental capacity to understand on 13 August 2005 that by entering into the 2005 Assignment:
160.The 2005 Assignment is thus not invalid for want of capacity on the part of Father. THE COUNTERCLAIM 161.With the 2005 Assignment upheld, the Property devolved unto Pui On solely upon Father’s death on 15 March 2014. 162.As the legal and beneficial owner of the Property, Pui On is entitled to possession of the premises. Other than the matters raised in support of her claims, Oi Ha has not advanced any other defence to Pui On’s counterclaim. Following the dismissal of Oi Ha’s claims, there is no reason why Pui On should not recover the Property. 163.Pui On also claims damages in relation to Oi Ha’s refusal or failure to vacate the Property. According to paragraph 36 of Mr Ho’s written opening submissions for Pui On, at the pre-trial review hearing on 23 May 2014, the parties have agreed for the quantum of the counterclaim to be assessed at a separate hearing should liability be determined in Pui On’s favour. Although this agreement is not recorded in the Order made by Anthony Chan J on 23 May 2014, Mr Ho informs me that his Lordship has indicated that he had marked the agreement in the court’s notes. ORDERS 164.For the above reasons, I set aside the 2011 Assignment but dismiss Oi Ha’s remaining claims. 165.I allow Pui On’s counterclaim and order Oi Ha to deliver up vacant possession of the Property to Pui On and pay damages to be assessed for the loss and damage suffered by Pui On as a result of Oi Ha’s refusal and/or failure to vacate the Property. 166.I also made an order nisi that Oi Ha should pay Pui On’s costs of the action on a party and party basis, to be taxed if not agreed.
Mr Kelvin H K Liu, instructed by Choi & Liu, for the plaintiff Mr Matthew Ho, instructed by W K To & Co, for the 1st and 2nd defendants [1] Pursuant to paragraphs 1 to 3 of the Order made by Anthony Chan J on 23 May 2014. [2] If Oi Ha should establish her beneficial interest in the Property whether under an implied trust or a proprietary estoppel, Pui On, as the Parents’ successor-in-title and a volunteer, would have to take the Property subject to such interest even if the 2005 and 2011 Assignments be upheld. [3] The threshold for a diagnosis of dementia is 23/30. |
Cases cited in this judgment
Further hearings and rulings under HCA 17/2012