Yeung Hock Wai also known as Yeung Hock Wi v. Chan Wai Man the Administratrix of the Estate of Yeung Hung Hei Patrick, Deceased

HCA 2812/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2812 OF 2015

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(By Original Action)

AND BETWEEN

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DECISION

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1.By para 1 of the summons dated 21 March 2017 the plaintiff (by original action) and the defendants (by counterclaim) apply for leave to appoint Mr Robert Radley (“Mr Radley”) as their handwriting expert, so as to prepare an expert report:

“…on whether the purported signature of the Plaintiff (by Original Action) appearing on a purported reference letter issued by Katat Plastic Manufactory Limited dated 31 December 2014 (sic) is authentic…” ‌

2.This is the hearing of the summons.

3.These proceedings are in relation to the beneficial ownership of two landed properties:

(1)   25% interest in Factory Units A & B on 1/F Kapok Industrial Building, No. 373 To Kwa Wan Road, Kowloon (“the Tokwawan Property”); and

(2)   25% interest in Town House No. 49, Sunderland Estate, No 1 Hereford Road, Kowloon (“the Sunderland Property”).

4.The Tokwawan Property and the Sunderland Property are collectively referred to as “the Properties”.

5.The plaintiff (by original action), who is the 1^st defendant (by counterclaim) (“the Father”) is the natural father of Yeung Hung Hei Patrick (“Patrick”).  Patrick is the son of the Father and his ex-wife Madam Chan Mei Yip. 

6.Patrick passed away prematurely and suddenly due to sickness at the age of 49 years on 12 March 2015.

7.The defendant (“Vivian”) is the widow and the administratix of the estate of Patrick.

8.The Father and his ex-wife divorced when Patrick was about 10 years old.

9.Vivian married Patrick on 19 February 1997.  They were living together as husband and wife until Patrick’s untimely death.

10.The Father married his second wife Asavayong Unruen in about 1979.  She is the 2^nd defendant (by counterclaim) (“Mrs Yeung”).

11.Yeung Ka Hei (“Jeffrey”) is the son of the Father and Mrs Yeung who was born on 28 May 1980.  Jeffrey is the 3^rd defendant (by counterclaim).

12.By an assignment dated 14 April 1999 the Father assigned his rights and interests of and in the Sunderland Property to (1) himself, (2) Mrs Yeung, (3) Patrick and (4) Jeffrey as tenants in common in equal shares at a stated consideration of HK$8,250,000.

13.By another assignment dated 10 August 1999 the Father assigned his rights and interests of and in the Tokwawan Property to (1) himself, (2) Mrs Yeung, (3) Patrick and (4) Jeffrey as tenants in common in equal shares at a stated consideration of HK$700,000.

14.Prior to entering into the said assignments the Father was the sole registered owner of the Properties.

15.As a result of the said assignments Patrick acquired a 25% interest in the Properties.

16.Patrick died intestate.  On his death his 25% interest in the Properties formed part of his estate.

17.Letters of administration were granted to Vivian on 16 October 2015. 

18.By this action the Father claims against Vivian as the administratrix of the estate of Patrick for a declaration that:

(i)  all such rights or interests that Patrick held in the Properties have reverted back to the Father since 2004;

(ii)   Patrick (and upon his death his estate) held and still holds Patrick’s share on trust (either resulting or constructive) for the sole benefit of the Father since 2004.

19.Consequential orders are also claimed.

20.There is no dispute that none of the assignees under either of the said assignments paid any part of the stated consideration to the Father.  The said assignments were intended by the Father to, and did, take effect as a gift (“the Gift”) to Mrs Yeung, Patrick and Jeffrey each taking a 25% interest in the Properties.

21.The Father’s case is that the Gift was subject to conditions subsequent (“the Conditions”) as pleaded in the re-amended statement of claim.  This is denied by Vivian and she counterclaims against the Father, Mrs Yeung and Jeffrey for an order that the Properties be sold pursuant to the Partition Ordinance (Cap 352).  Consequential orders are also claimed.

22.As set out in the submissions of Mr Paul Shieh SC, with Ms Alice Lau, for the Father, Mrs Yeung and Jeffrey, the Conditions were:

(1) Patrick would reside with the Father and care for him during his lifetime, or in the event that the Father should survive Patrick, for as long as the Father would live; and

(2) Patrick would continue to assist the Father in the business and operations of Katat Plastic Manufactory Ltd (“Katat”), which was the family business involved in the manufacturing and trading of plastic toys and other plastic products, until the death of the Father, or in the event that the Father should survive Patrick, for as long as Patrick should live.

23.As pleaded at para 13 of the re-amended statement of claim, the Father’s case is that Patrick acted in breach of or otherwise failed to fulfill the Conditions because:

(1) In or around 2004, Patrick moved out and ceased to reside with the Father at the Sunderland Property;

(2) Shortly after moving out, Patrick ceased to work at Katat and ceased to be involved in its business and operations;

(3) Since then, the Father had not been cared for by Patrick, whether financially or otherwise.

24.The Father’s case is that as a result the Gift failed and reverted to the Father.  His case is that since around 2004 Patrick held the 25% interest in the Properties on a resulting or constructive trust for the sole benefit of the Father.

25.The Father’s case is denied.  As pleaded in the amended defence and counterclaim, Vivian’s case is that the Gift made by the Father to Patrick was an absolute gift not subject to the Conditions as alleged or at all.  Vivian’s case is that she had never heard of the alleged Conditions and was only made aware of the same for the first time by the Father issuing the writ on 1 December 2015. 

26.Vivian admits that she and Patrick moved out of the Sunderland Property and that Patrick ceased to work at Katat in or around early January 2005 and that since then Patrick had not given any money to the Father who did not need any financial assistance.

27.Vivian also asserted that the Father never demanded the return of Patrick’s 25% interest in the Properties during the lifetime of Patrick.

28.The Father admits that he did not demand the return of the 25% interest in the Properties during the lifetime of Patrick as he harboured a secret wish, which did not materialize, that one day Patrick would return home and work at Katat in which event he would have reconciled with Patrick and would not have demanded the return of the 25% interest in the Properties.

29.Although there are other defences raised as to whether there was an intention to create legal relations between a parent and his child, whether it was a contract for disposition of land which required to be evidenced in writing to be enforceable, and whether the claims are time‑barred, these are not material for the purposes of this application.

30.The only dispute between the parties is whether or not the transfer of the Properties was made subject to the Conditions.  The Conditions were oral conditions without any documents evidencing the same.  This is a factual dispute.

31.It is common ground that Patrick returned from Canada after emigrating there when he was young.  Patrick returned from Canada in about 1992 and resided at the Sunderland Property with the Father, Mrs Yeung and some of Patrick’s sisters.  Patrick also worked at Katat with the Father and he was appointed a director.

32.Vivian first met Patrick in Hong Kong in about December 1992.  They were married on 19 February 1997 after which Patrick and Vivian moved to live also at the Sunderland Property.  Vivian also started to work at Katat.

33.In or about 2002 Jeffrey returned to Hong Kong from Canada and also lived at the Sunderland Property.  He also worked at Katat.

34.Jeffrey married his wife Mimi in July 2004 and they lived at the Sunderland Property after their marriage.  Mimi also started to work at Katat.

35.There is no dispute that both Patrick and Vivian moved out of the Sunderland Property in early January 2005.  Patrick ceased to work at Katat after moving out.

36.The Father’s case as set out in his witness statement, and supported by Mrs Yeung in her witness statement, is to the effect that Patrick and Vivian left the Sunderland Property and never returned to work at Katat.  His case is that their decision to leave Katat and the Sunderland Property was not pre-announced.

The summons

37.By the summons the Father seeks to obtain his handwriting expert’s opinion in relation to only one document.  This is the letter dated 31 December 2004 (“the Letter”) on the letterhead of Katat certifying that Vivian:

“ … was employed as Clerk since March 1 1997 to December 31, 2014”

38.The Letter is purportedly signed by the Father as director of Katat.

39.The Letter was disclosed by Vivian in her List of Documents.  The Father has given notice disputing the authenticity of the Letter which requires Vivian to prove the authenticity of the Letter at trial.

40.Vivian refers to and relies on the Letter in her witness statement at para 49 when dealing with the circumstances surrounding her and Patrick’s decision to leave Katat and to move out of the Sunderland Property.  At para 49 she says:

“ At the end of 2004, one of my hands had an injury. I frequently had to take sick leave for medical appointments. Mimi had started working at Katat. So I tendered my resignation to [the Father] in December 2004 (please refer to Appendix 2). He approved my resignation without saying anything”

41.The Appendix 2 referred to therein is the Letter.

42.In her supplemental witness statement (paras 93 – 96) Vivian said that the Letter was to certify her employment at Katat for the period mentioned.  She elaborated on the circumstances surrounding the signing of the Letter which, on her case, was signed by the Father. 

43.She explained that in August or September 2004 she began to experience pain in her hands and received treatment.  During the treatment period she often had to attend medical appointments.  She said that Jeffrey’s wife Mimi took over her job duties when she was away for the medical appointments.  On her case, the relationship between Patrick and her with the Father and Mrs Yeung had been deteriorating and that Patrick had planned to move out of the Sunderland Property and to leave Katat.  The deterioration of the relationship is disputed.

44.Vivian said that she planned to give her resignation to the Father and Mrs Yeung and to leave Katat at the end of December 2004.  In early December 2004 Vivian orally tendered her resignation to the Father and Mrs Yeung and explained to them that the Letter was to prove her past working experience to enable her to look for a job in future.  She said that Mrs Yeung personally read the Letter first and agreed with its contents before passing it onto the Father to sign.  Vivian said that she witnessed the Father signing the Letter.

45.The Father and Mrs Yeung deny what Vivian says. 

46.The Father in his supplement witness statement said that the signature on the Letter is not his and that he did not sign the Letter.  He says that when Patrick and Vivian left home suddenly in about late 2004, they had not given him prior notice and he had not signed the Letter.  He said that Vivian had never tendered her resignation to him and that he had never approved her resignation.

47.Mrs Yeung in her supplemental witness statement said that she had never seen the Letter before being shown it by her solicitors.  She said that she has no knowledge of the Letter and that Vivian had never informed her of her resignation before leaving. 

48.It seems to me that there is a clear dispute of fact as to the circumstances surrounding the signing of the Letter and whether it was in fact signed by the Father as Vivian says. 

49.I was informed by Mr Paul Lam SC, with Ms Maria So, for Vivian, that the proceedings are ready to be set down for trial but for the summons.  The witnesses of fact at trial will be the Father, Mrs Yeung Jeffrey and Vivian.  Their witness statements have been exchanged.

The handwriting experts

50.The Father has engaged Mr Radley as his handwriting expert to carry out a preliminary examination on a coloured copy of the Letter.  The original of the Letter is still with Vivian or her solicitors.  In his preliminary report dated 1 February 2017, which has been produced in evidence, Mr Radley was satisfied that the quality of the coloured copy of the Letter was good but that the original document was required for examination to confirm his observations made from the coloured copy and enlarged photographs of the signature in question and also for further investigations that should be taken. 

51.Mr Radley’s preliminary opinion is that that there is strong evidence to support the proposition that the signature in question was not written by the Father but is a simulation (freehand copy) of his general signature style.

52.Vivian has also engaged her own handwriting expert Ms Michelle Novotny (“Ms Novotny”).  She has examined the original signature on the Letter against some non-original documents containing specimen signatures of the Father.  Her preliminary opinion is as set out in the email she sent to Vivian’s solicitors on 1 May 2017.

53.Ms Novotny concluded that her observations were supportive of a proposition that the signature on the Letter was written by the writer of the specimen signatures on the non-original documents supplied to her.  Her preliminary opinion is to the effect that the signature on the Letter was written by the Father. 

54.On the preliminary views of the handwriting experts there is a difference of opinion as to whether the signature on the Letter was written by the Father.

The applicable principles

55.This is a case management decision. 

56.The principles are not in dispute.

57.The burden is on the applicants to satisfy the court that leave to adduce the handwriting expert evidence sought should be granted.

58.As Chow J said in X v Dr Hung Cheung Tsui & another (HCPI 67/2014, 23 May 2017) at para 9:

“ PRINCIPLES FOR ADMISSION OF EXPERT EVIDENCE

9. The principles applicable for leave to adduce expert evidence are well established and not in dispute. They are conveniently summarised by Bharwaney J in Fung Chun Man v Hospital Authority, HCPI 1113 of 2006 (24 June 2011), as follows:-

‘ 9. The enactment of the CJR did not result in a change to O.38, r.36 of the Rules of the High Court (‘RHC’). However, after the enactment of the CJR, it is clear that the court’s discretion, whether or not to grant leave to a party to adduce expert evidence, is to be exercised within the ambit of the court’s management powers. Those powers must be exercised in the light of the underlying objectives of the CJR, including the need to ensure the cost effectiveness of the proceedings; to ensure that the case is dealt with expeditiously; to ensure reasonable proportionality having regard to the amount of money involved, the importance of the case, the complexity of the issues, and the financial position of each party; to ensure procedural economy in the conduct of the proceedings; and to ensure fairness between the parties.

11. The expert evidence can only be adduced with leave of the court and, in deciding whether or not to grant leave, the court must ensure that such evidence is admitted only if it is likely to be of real assistance to the determination of the issues, and that it is adduced in the most effective and economic way consistent with the objectives of the CJR.

12. In this regard, I echo the observations of Evans-Lombe J in Barings PLC v Coopers & Lybrand (No.2) [2001] Lloyd’s Rep Bank 85:

‘45. Expert evidence is admissible …. in any case where the court accepts there exists a recognised expertise governed by recognised standards and rules of conduct capable of influencing the court’s decision on any of the issues which it has to decide and the witness to be called satisfies the court that he has a sufficient familiarity with and knowledge of the expertise in question to render his opinion potentially of value in resolving any of those issues. Evidence meeting this test can still be excluded by the court if the court takes the view that calling it will not be helpful to the court in resolving any issue in the case justly. Such evidence will not be helpful where the issue to be decided is one of law or is otherwise one on which the court is able to come to a fully informed decision without hearing such evidence.’

13. The Court of Appeal in Mann v Messrs. Chetty & Patel (a firm) [2000] EWCA CIV 267 proposed 3 questions that ought to be asked before deciding to allow expert evidence :

‘ (a) how cogent the proposed expert evidence will be;

(b) how helpful it will be in resolving any of the issues in the case; and

(c) how much it will cost and the relationship of that cost to the sums at stake.’

14. Chu J, as she then was, referred to Barings PLC v Coopers & Lybrand and concluded, in Wong Hoi Fung v. American Assurance Co. (Bermuda) Ltd. [2002] 3 HKLRD 507, that the expert evidence must be reasonably required to resolve the issues before the court before leave would be granted to adduce it.

15. In summary, the expert evidence must be in a recognised discipline, reasonably required to enable the court to resolve the issues in dispute, and proportionate.

16. However, even if a prima facie case is made out for the admission of expert evidence, in every case, the court must also have regard to other relevant circumstances, such as the potential disruption to the trial, the prejudice to the other parties, and the explanation offered by the applicant in cases where a late application is made for expert evidence to be adduced.  These matters have to be considered and weighed in the light of and against the underlying objectives of the CJR: to ensure cost effectiveness and economy, expedition, proportionality, and fairness between the parties. Ultimately, the court strives to do justice between the parties and, in cases where the court permits the parties to call expert evidence, the court strives to ensure a level playing field with fair access to proper experts for all parties.’”

59.In the affirmation filed in support of the summons Ms Wong Pui Yan Cecilia, the solicitor acting for the Father, Mrs Yeung and Jeffrey, gives her opinion at para 17 when she says that:

“ The purpose of Vivian adducing [the Letter] is to show that [the Father] implicitly accepted (or even approved of) [Patrick’s] and Vivian’s departure from the family residence and cessation of work at Katat in 2004 due to the breakdown of relationshiop, so that it is inherently unlikely for the Gift to have been made subject to the Conditions ….”

60.That is the opinion of the solicitor which clearly should not have found its way into her affirmation which may contain only such facts as the deponent is able of her own knowledge to prove, save that when the affirmation is made in interlocutory proceedings, it may contain statements of information or belief with the sources and grounds thereof (Order 41, rule 5 of the Rules of the High Court). 

61.Be that as it may, Mr Shieh in his submissions made the same point that was made by the solicitor.

62.Mr Lam submitted that in order to dispel any misconception or misunderstanding as to the use of the Letter by Vivian at trial, Vivian has confirmed in her affirmation in opposition at para 24 that:

“ In any event, I wish to make it clear that it is not and never my intention to rely on [the Letter] to invite the Court to infer the existence or non existence of the alleged condition of the Gift.”

63.With that assurance, it was submitted that the Letter is not relevant to any material issue in this case.

64.Mr Lam also relied on what Chan PJ said in Nina Kung v Wong Din Shin (2005) 8 HKCFAR 387 at para 15:

“ It can be seen that the courts generally prefer the direct evidence of witnesses who actually saw and heard what happened to the opinion evidence of an expert. This is especially so in the case of handwriting evidence because of the nature of such evidence.”

And at para 20 Chan PJ said:

“ … Handwriting analysis is not an exact science and the opinion of a handwriting expert, however objective it is, is inherently less precise than a conclusion based on the results of a scientific analysis. The acceptability of an expert’s opinion depends very much on how sound and convincing the reasons for his opinion are.”

65.Mr Lam submitted that the parties will be giving direct factual evidence on whether or not the Father signed the Letter in the circumstances as stated by Vivian and that the handwriting expert evidence is unnecessary.

66.No doubt at trial there will be extensive cross-examination of the witnesses not only about the alleged Conditions but also about the factual matters in dispute between the parties as contained in their witness statements, including the Letter and whether or not the Father signed the same in the circumstances as stated by Vivian.  The credibility of the witnesses will play an important role.

67.Vivian has referred to and relied on the Letter in her witness statement and her supplemental witness statement.  The authenticity of the Letter has been put in issue. A clear dispute of fact arises on whether the Father signed the Letter. 

68.Although Vivian does not intend to ask the trial judge to draw an adverse inference against the Father on the question of whether the Gift was subject to the Conditions if it is established at trial that the Father did in fact sign the Letter, it seems to me that it is up to the trial judge to draw whatever inferences can properly be drawn from the totality of the evidence that will be explored at trial by cross-examination of the witnesses.

69.In my view, the Letter is relevant to the disputed question of whether the departure of Vivian and Patrick from Katat was pre-announced and with the consent of the Father.  This is a matter to be considered at trial by the trial judge who will have to consider all the circumstances, as well as the conduct of the parties, in arriving at a decision whether the Gift was an absolute gift or was a gift subject to the Conditions.  In deciding on the authenticity of the Letter the trial judge will, in my view, be assisted by the evidence of handwriting experts although it remains to be seen to what extent he will be assisted.  That is a matter for the trial judge.

70.I do not think that the costs of the handwriting expert evidence is disproportionate to the value of the claim and counterclaim as submitted by Mr Lam.  Mr Shieh informed me that a joint valuation has been obtained which values the Properties at about HK$80 million which means that the 25% interest is valued at about HK$20 million.  The estimate given of the cost of an expert at not less than AUD15,000 to AUD18,000 plus disbursements of AUD250 to AUD300, plus travel and accommodation expenses to Hong Kong for the overseas experts to give evidence at trial does not seem to me to be disproportionate to the value of the claim and counterclaim.  I am not persuaded that the application should be refused on this ground.

71.Undoubtedly, with the adducing of the opinion of handwriting experts the setting down for trial of these proceedings will be delayed.  It seems to me that the setting down for trial will be delayed by at least six months, if not more, which means that the trial dates will probably be in late 2018, at the earliest.  The Father is already 87 years old and by the time of trial, he will be close to 89 years of age.  This is clearly an important factor to be taken into account.  Until there is a resolution of these proceedings there will also be a consequential delay in the administration of the estate of Patrick.

72.I have also taken all these matters into account but have come to the view that in the interests of justice to all the parties the application should be granted.

73.I was informed at the hearing that in the event that I decided that the application should be allowed, directions, which have been agreed between the parties, should be given, save that Mr Shieh submitted that there should be an exchange of expert’s reports rather than sequential disclosure of expert’s report as submitted by Mr Lam. 

74.I agree with Mr Lam that it would be preferable to have sequential disclosure of expert’s reports with Mr Radley’s report being disclosed first. The experts are from different jurisdictions and the original Letter and original specimen signatures will have to be supplied to them at different times.

75.I make an order that:

(1) Leave be granted to the Father, Mrs Yeung and Jeffrey to appoint Mr Radley as their handwriting expert, so as to prepare an expert report on whether the purported signature of the Father appearing on the Letter is authentic;

(2) Leave be granted to Vivian to appoint Ms Novotny as her handwriting expert, so as to prepare an expert report on whether the purported signature of the Father appearing on the Letter is authentic;

(3) Mr Radley’s report be supplied to Ms Novotny on a without prejudice basis within 90 days from today;

(4) Ms Novotny’s report be supplied to Mr Radley on a without prejudice basis within 90 days thereafter;

(5) The experts do meet on a without prejudice basis within 28 days thereafter, identifying the matters that they are in agreement and in disagreement; and

(6) The experts do produce a joint report within 28 days thereafter (i) identifying the matters in agreement and (ii) identifying the matters they have failed to reach a common opinion and the reasons for their disagreement.

(7) There be liberty to apply.

76.I also give directions as sought at para 34 of Vivian’s affirmation. 

77.I give directions that the Father do make available to Vivian within 14 days from today the following documents (save those which are not in his power, possession or custody as verified by him in an affirmation to be made within 14 days from today):

(1) Not less than 5 original company invoices made in the year of 2004 bearing the Father’s specimen signatures;

(2) Not less than 5 company minutes of Katat bearing the Father’s specimen signatures made in 2004;

(3) Not less than 5 original company documents including but not limited to company letters or receipts bearing the Father’s specimen signatures made in 2004;

(4) Original Yearly reports and Financial statements bearing the Father’s specimen signatures for the year ended 2003 to 2008, including 2004;

(5) Not less than 5 company cheques issued by Katat bearing the Father’s specimen signatures issued in 2004;

(6) Not less than 5 copy applications for cashier’s order issued by Katat bearing the Father’s specimen signatures in 2004;

(7) Original lease signed by the Father in 2014;

(8) Original agreement of the Sunderland Property with Memorial No 2364024 dated 30 December 1982;

(9) Original Undertaking with Memorial No 2382516 dated 30 December 1982;

(10) Original Agreement of the Sunderland Property with Memorial No 2486526 dated 20 July 1983;

(11) Original Assignment of the Sunderland Property with Memorial No 2486527 dated 23 August 1983;

(12) Original Mileage Programme Enrolment Form dated 30 January 2004.

78.As regards costs, I make an order nisi that the costs of the summons be costs in the cause.  This was the order made by Chu J (as she then was) in Wong Hoi Fung v American International Assurance Co (Bermuda) Ltd[2002] 3 HKLRD 507 at 514H in relation to the application for expert evidence which was also opposed.

Mr Paul Shieh SC and Ms Alice Lau, instructed by Li & Lai, for the plaintiff (by original action) and the defendants (by counterclaim)

Mr Paul Lam SC and Ms Maria So, instructed by Tang & So, for the defendant (by original action) and the plaintiff (by counterclaim)