Choi Yuk Ying v. Ng Ngok Chuen
Read the full judgment text of HCA 1853/2014 on BabelCite. This High Court CFI judgment was delivered on 18 September 2017.
1. This is a dispute concerning a landed property, No 59 Granville Road (“ the Granville Road Property ” or “ the Property ”) between the plaintiff (“ Madam Choi ”) and her step-son the defendant (“ Ngok Chuen ”).
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HCA 1853/2014 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 1853 OF 2014 ________________________
________________________ Before: Deputy High Court Judge Yip SC in Court Dates of Hearing: 13 – 17, 20 – 21 February and 13 March 2017 Date of Judgment: 18 September 2017 _________________ JUDGMENT _________________ A. Brief background 1.This is a dispute concerning a landed property, No 59 Granville Road (“the Granville Road Property” or “the Property”) between the plaintiff (“Madam Choi”) and her step-son the defendant (“Ngok Chuen”). 2.The deceased, Mr Ng Kam Chow (“Ng Senior”), Madam Choi’s husband and Ngok Chuen’s biological father, transferred the Granville Road Property to Ngok Chuen shortly before his death on 29 October 1986. It is not disputed that Ngok Chuen has been the legal and beneficial owner of the Granville Road Property at all material times since the transfer. 3.The crux of the Madam Choi’s case is that Ng Senior agreed to transfer the Property to Ngok Chuen on the condition that Madam Choi should be solely and fully entitled to all the income from the Granville Road Property during her lifetime. 4.Ngok Chuen disagrees and says that the alleged life interest was merely Ng Senior’s wish communicated to him after Ng Senior’s death but not a condition to the transfer of the Granville Road Property. 5.It is not disputed that Madam Choi only retained the rental income of the Granville Road Property for about 10 years from 1986 to 1996. The parties have different accounts as to why Madam Choi stopped retaining the rental income in 1996. Madam Choi says that Ngok Chuen made fraudulent representation and persuaded Madam Choi to allow him to retain the rental income. Ngok Chuen disagrees. 6.Madam Choi now sues Ngok Chuen for the rental income he received in the past as a result of her reliance on his representation and seeks to have a declaration giving effect to her alleged life interest. Ngok Chuen counterclaims and seeks a declaration giving effect to his past and future entitlement to the income of the Granville Road Property. B. Undisputed facts 7.Madam Choi and Ng Senior were married on 16 August 1967. 8.By his former wife of a previous marriage, Ng Senior had two children, namely, Ng Soon Fong (“Soon Fong”) and Ngok Chuen; whereas Madam Choi and her former husband of a previous marriage also had two children, namely, Ng Kan Hoi (“Kan Hoi”) and Ng Man Hing (“Man Hing”). Kan Hoi, Man Hing, Soon Fong and Ngok Chuen shall be referred to herein as “the Children”. 9.Since around 1966, Ng Senior and Kan Hoi built up a family business involved in the sale of embroideries and gift items to tourists which generated substantial profits. The profits were used by Ng Senior to, inter alia, purchase properties in his name and also in the name of other family members. Hanley Artware (“Hanley”) was a company involved in the sale of embroideries. Yanley Investment Limited (“Yanley”) was and isa property investment vehicle of the family (together “the Family Business”). 10.In 1983, Ngok Chuen left Hong Kong for immigration to the United States. 11.Not later than early 1986, Ng Senior was diagnosed of liver cancer and fell seriously ill. Before his death, he made plans for dividing up the assets that he had generated from the Family Business including landed properties. 12.Prior to his death in 1986, Ng Senior transferred and/or procured the transfer of various landed properties (purchased using profits generated from the Family Business) to the Children:
13.The Children all signed powers of attorney in favour of Madam Choi which gave her full authority to, inter alia, manage and deal with the properties and the income derived therefrom:
14.The power of attorney signed by Ngok Chuen (“the 1986 Power of Attorney”) states that:
15.Ng Senior passed away on 29 October 1986. 16.Since the date of transfer of the Granville Property to Ngok Chuen, Madam Choi had always collected and retained rental income from the Grandville Road Property, with full consent and knowledge of Ngok Chuen. 17.Ngok Chuen came back to Hong Kong and discussed with Madam Choi and/or Kan Hoi in both 1993 and 1996 about the rental income. Afterwards and since 1996, Madam Choi stopped retaining the rental income of the Granville Road Property. 18.From April 1996 to December 2001, when Ngok Chuen was residing in Canada, Madam Choi deposited all the rental income from the Granville Road Property into Ngok Chuen’s bank account in Hong Kong for Ngok Chuen’s exclusive use and benefit. 19.From 1996 to 2001 or 2002, Ngok Chuen occasionally gave Madam Choi pocket money of $5,000 per month. 20.In 1997, Ngok Chuen executed another power of attorney in favour of Madam Choi (“the 1997 Power of Attorney”). 21.Since 2002, upon his return to Hong Kong, Ngok Chuen took back the title deeds from Madam Choi and began collecting the rental income directly from the tenants himself. 22.Ngok Chuen had purchased a property in Hong Kong in 2001 at the price of about HK$8 million. He was and is the owner of a number of luxury properties in Hong Kong and has made substantial profits from sale of luxury properties in Hong Kong since 2003. 23.Madam Choi’s solicitors wrote to Ngok Chuen’s then solicitors on 26 May 2014 demanding, inter alia, an account of rental income of the Granville Road Property received by Ngok Chuen and repayment of such rental income to Madam Choi, which Ngok Chuen refused. 24.On 19 September 2014, Madam Choi issued the Writ of Summons endorsed with the Statement of Claim of these proceedings. C. Madam Choi’s pleaded case 25.I shall set out the plaintiff’s case first. 26.In around September 1986, Ng Senior transferred and/or procured the transfer of various properties and/or the beneficial ownership thereof to the Children on the basis that a life interest in all income from the subject properties would vest in Madam Choi from the date of transfer and they would hold such properties subject to her life interest. In consideration for the aforesaid transfers, the Children all agreed to the condition. 27.Specifically, as regards Ngok Chuen, in around September 1986, Ng Senior agreed to transfer the Property to Ngok Chuen, in consideration for which Ngok Chuen agreed that Madam Choi would be solely and fully entitled to all the income from the Granville Road Property during her lifetime. It is specifically pleaded that:
28.From October 1986 to April 1996, Madam Choi collected and kept all rental income in respect of the Property for her own benefit. This was allegedly pursuant to her rights and entitlement. 29.In or about 1993, Ngok Chuen approached Kan Hoi suggesting he wished to collect the rental income of the Granville Road Property. Kan Hoi disapproved of such idea and suggested Ngok Chuen should raise the issue again after 3 years’ time. 30.In or about 1996, Ngok Chuen allegedly made a representation to induce Madam Choi to allow him to receive and keep the rental income of the Property. The representation, which is said to be fraudulent, is set out as follows (“the 1996 Representation”):
31.Madam Choi allegedly relied on the 1996 Representation, and believed it to be true, in paying over the rental income to Ngok Chuen, or allowing him to collect such income. 32.Hence, from April 1996 to December 2001, when Ngok Chuen resided in Canada, Madam Choi deposited all the rental income into Ngok Chuen’s bank account in Hong Kong. And since 2002, upon Ngok Chuen’s return to Hong Kong, he began collecting the rental income directly from the tenants. 33.Madam Choi alleges that it was only in April 2014 that it came to her knowledge that in 1996 Ngok Chuen was not in financial difficulties and has not been in financial difficulties since 1996. 34.Ngok Chuen’s authority to collect rental income has been rescinded from 26 May 2014 by way of the letter mentioned in §23 above. Moreover, it is alleged that the basis upon which Ngok Chuen collected rental income from the Property was vitiated by reason of fraudulent misrepresentation or a mistake of fact or a change in circumstances. 35.Madam Choi seeks, inter alia, a declaration that she is solely and beneficially entitled to all the income from the Granville Road Property during her lifetime, for an account and payment over of all income of the Property received by Ngok Chuen to date, and a declaration that he holds such income on trust for Madam Choi. D. Ngok Chuen’s pleaded case 36.Ngok Chuen’s case is set out as follows. 37.The transfer of the Property to Ngok Chuen in October 1986 was not made on the basis that a life interest in all income from the Granville Road Property would vest in Madam Choi from the date of transfer and Ngok Chuen would hold the Property subject to this life interest. 38.Ngok Chuen was only informed by Kan Hoi shortly after the death of Ng Senior that it had been Ng Senior’s wish that Madam Choi would receive rental income from the various properties in her lifetime. Out of respect for the wishes of his father and as a gesture of goodwill, Ngok Chuen did not object to Madam Choi receiving the rental income. 39.It is denied that Madam Choi ever had any legally enforceable right against Ngok Chuen to receive or keep any rental income from the Property after it was assigned to Ngok Chuen. 40.There was no agreement between Madam Choi and Ngok Chuen in relation to her alleged entitlement to rental income, and in any event, Madam Choi never provided any consideration. 41.The 1986 Power of Attorney does not constitute an assignment of a life interest to the rental income of the Granville Road Property. The power of attorney provided for the appointment of Madam Choi to be the true and lawful attorney of Ngok Chuen “for [him] in [his] name and on [his] behalf”. The same applies to the 1997 Power of Attorney Ngok Chuen subsequently executed. 42.Ngok Chuen denies making the 1996 Representation. Ngok Chuen did indicate to Madam Choi in or about 1993 that he wished to expand his business in Canada and would like to receive and keep the rental income of the Granville Road Property. No consensus was reached then. 43.Subsequently, Ngok Chuen indicated to Madam Choi that he intended to sell his shares in Yanley, of which Ngok Chuen was then a director and a shareholder. 44.Later in or about 1993, Madam Choi, Kan Hoi and Ngok Chuen reached a consensus that Ngok Chuen would receive and keep the rental income of the Granville Road Property from around 1996 onwards. 45.In 1993, Madam Choi already knew about Ngok Chuen’s business in Ontario, Canada (wholesaling of toy products) and in Hong Kong (drafting supplies under Alfa Trace (HK) Limited). Prior to Ngok Chuen’s return to Hong Kong in 2001 or 2002, Madam Choi knew that he was not in financial difficulties. Madam Choi was also aware of his financial status after his return. 46.Ngok Chuen denies that it was only in 2014 that Madam Choi came to the knowledge that Ngok Chuen was not in financial difficulties nor was he in need of funds to maintain his family and children. 47.If, which is denied, Ngok Chuen was not entitled to receive rental income from the Granville Road Property:
48.In any event, Madam Choi is time-barred under the Limitation Ordinance (Cap 347) from seeking recovery of the rental payments which were received by Ngok Chuen more than 6 years prior to the commencement of these proceedings. 49.Ngok Chuen denies that Madam Choi is entitled to the relief she seeks and counterclaims for a declaration that he and his lawful successors and assigns, is solely and beneficially entitled to all income to be derived from the Granville Road Property. E. Evidence of Madam Choi and her witnesses, Kan Hoi and Man Hing 50.The plaintiff has called three witnesses including Madam Choi herself, Kan Hoi and Man Hing. E1. Madam Choi’s evidence and its evaluation 51.Madam Choi relies on her three witness statements which I do not propose to repeat at length but which purportedly supported her pleaded case. 52.She only found out Ng Senior’s plan to transfer the properties to the Children not long before his death in October 1986. Ng Senior, when he was very ill, and Kan Hoi told her the transfer of properties were to be conditional upon each of the Children agreeing that she would be solely entitled to all the income from the properties for life. It was to ensure she would live comfortably and be adequately provided for during the rest of her lifetime. 53.She understood from Ng Senior and Kan Hoi that the Children, including Ngok Chuen, agreed to allow her to retain the rental income of the Granville Road Property (and the other properties) during her lifetime, and each signed a power of attorney to that effect. 54.In 1993, Ngok Chuen approached Kan Hoi regarding the rental income of the Granville Road Property. Kan Hoi rejected him and informed Madam Choi about the conversation. In 1996, Ngok Chuen approached Madam Choi for the rental income because of his financial difficulty and the financial needs to raise his four children. Therefore, Madam Choi allowed him to retain the rental income of the Granville Road Property. 55.She had no idea that Ngok Chuen owned his business in Canada and Hong Kong back in 1993. Though she had visited Ngok Chuen’s home in Canada and Hong Kong, she all along thought those properties were rented only. She all along thought that the comfortable lifestyle of Ngok Chuen and his family was solely supported by the rental income of the Granville Road Property. It was her understanding that Ngok Chuen never had a job at all material times. It was only in 2014 that she found out Ngok Chuen was never in any financial difficulties even back in 1996. 56.Given her old age, lack of education, and the lapse of time, it is understandable that her recollection was generally unclear and imprecise. I am prepared to be more lenient when assessing her credibility. However, having observed her demeanour, heard her live evidence in court and received the helpful submissions of both sides, I would reject Madam Choi’s evidence entirely. I find her evidence totally unreliable and incredible. I shall simply highlight a few (and I stress not all) unsatisfactory aspects of her evidence. 57.Madam Choi first claimed that the rental income from the four properties were deposited into her passbook account and would stay there [Day 2—p 41]. Inexplicably, she was unable to explain how these large sums were dealt with. She was even unwilling to accept that these would far exceed her monthly household expenses [Day 2—p 42]. Shortly after, Madam Choi inexplicably changed her evidence to say that Kan Hoi and the company would use the money, including the rent from the Yanley properties, for business purposes [Day 2—p 46]. 58.I find it unconvincing that Madam Choi would be so unclear or equivocal about the use of the rental income. She is adamant that she alone was the beneficiary of the rental income. If the income were put to some uses other than for her own benefit, she must have been consulted and her approval must be obtained in the first place. These are not things that one would easily forget. 59.Her answers to questions about how much she spent per month, how she spent the money or the like were similarly unsatisfactory. Before 1986, she said she only spent on food and clothing. She was taken care of financially by Ng Senior and she had no idea how much she spent per month[Day 2—p 34]. After 1986, when she was asked whether the rental income from the four properties far exceeded her needs, she said:
It was a simple question and her answer remained vague and unclear. The questions were not about precise figures or amounts, which I do not expect an elderly person like her would remember; but they were just about a person’s spending habits, which I would have thought would not be easily forgotten. Yet, Madam Choi’s was non-committal and evasive. 60.Importantly, in my view, all this evidence about Madam Choi’s financial needs seems incongruent with the idea of Ng Senior’s “final decision” to leave Madam Choi with a large income of HK$150,000/month for life, not to mention that she was also supposed to receive the rental income of the properties owned by Yanley. (HK$150,000/month rental income from the Children’s properties was the evidence of Man Hing who was in charge of rental matters.) The fact is, if there is no clear evidence to support that Madam Choi needed much money to maintain, why did Ng Senior decide to leave her all the rental income from all the landed properties for the rest of her life? I have further explained my view in §76 below. 61.Another crucial aspect of Madam Choi’s evidence is her knowledge of Ngok Chuen’s financial condition. It is an important theme of her case, and upon which her case of fraudulent representation is premised, that she believed Ngok Chuen was in financial difficulties and needed the rental income to raise his children; as a result of which she was misled into allowing him to receive and keep the rental income from 1996 up to April 2014. The plea of fraudulent representation also supplies the basis that her claim is not time-barred. However, this part of Madam Choi’s evidence is particularly unsatisfactory and lacking in credulity. 62.In relation to her visits to Ngok Chuen’s home in Canada and Hong Kong, Madam Choi admitted that she did not know whether those places were owned or rented by him. However, her evidence was that she simply believed they were rented. She was unable to explain her speculativebelief that Ngok Chuen rented them, as opposed to owning them. While in her statement she speculated that the rental income Ngok Chuen received from the Property would enable him and his family to lead a comfortable life, she admitted in cross-examination that she visited Ngok Chuen’s big house in Toronto not long after she applied to emigrate in 1989. During cross-examination, she said she was uncertain as to whether her visit took place before or after 1996 [Day 2—pp 67–68 and Day 3—pp 1–2]. That being the case, what is the basis of her ‘assumption’ that Ngok Chuen paid for the house (or the rent therefor) with the rental income of the Property? How could she presumptively plead and say in her witness statement that Ngok Chuen was in financial difficulty and needed the money in 1996? 63.She claimed to be ‘busy’ with household chores as a reason why she did not ask anything in the 13 years between 1983 and 1996 as to Ngok Chuen’s income, finances and whether he had a job. This assertion was thoroughly unbelievable. It is not her case that she was distant from Ngok Chuen who is not her natural child. To the contrary, she admitted she cared about Ngok Chuen [Day 3—p 12]. It is simply incredible that she did not care to ask a single question of her step-son, even when they met up for tea or meals when Ngok Chuen came back to Hong Kong for visits, or when she visited him in Toronto (whether before or after 1996) over a period of 13 years. 64.It was equally incredible that she did not raise a single question in 1996 when Ngok Chuen allegedly asked for the rental income from the Granville Road Property, or seek to verify his financial situation with Kan Hoi or Man Hing, in particular, if, as is her case, Ngok Chuen had beenscolded by Kan Hoi in 1993 and was told to earn money to support his own family. Her evidence was that Ngok Chuen asked in 1996 and she simply believed him, and let him have the whole of the rental income from the Property. Her case that she merely assumed that Ngok Chuen had no income and was unemployed without raising a single query over his situation is incredible. 65.She alleged that she considered it was wrong for her to be funding the comfortable lifestyle led by Ngok Chuen after he returned to Hong Kong in 2002. He was then 52 and a father of four grown-up children. Despite this, incredibly not a single question was raised by her throughout 18 years as to his financial position, which simply defies common sense. In this context, she admitted that she knew ‘nothing at all’ about his financial difficulties except her claim that she thought that he did not have a job, which was based on a mere speculative assumption. 66.I find it utterly incredulous that Madam Choi (indeed, for Kan Hoi and Man Hing as well) would have no idea, never asked about Ngok Chuen’s financial health, and simply assumed that he was in financial difficulties. Madam Choi was effectively asking the Court to accept her case that she let Ngok Chuen keep the rental income for almost two decades, labouring under the wrong but self-induced belief that he was poor, when one question or some easy verification would have unearthed the truth. After all, the undisputed evidence is that there were regular family meetings (at least) between or amongst Madam Choi, Man Hing and Ngok Chuen. 67.On behalf of Madam Choi, Mr Shieh SC (and Ms Sara Tong) stressed that Madam Choi gave clear and certain evidence about what Ng Senior had told her in October 1986 as regards her entitlement in the income of the properties for her life time, and that the Children all agreed that they received the gifted properties subject to this. In my view, this does not help at all. I cannot adopt a tunnel vision, ie, only accept this part of Madam Choi’s evidence and ignore the rest of her evidence which casts grave doubt on her credibility. 68.Importantly, I was not even particularly impressed about the way she gave her evidence about her life interest. It gave an overall impression that she was reciting as if from a script. Irrespective of the question asked, when asked about 1986 she just recited that Ng Senior told her that the rental income from the four properties would be given to her for life. In fact, the same applies to her evidence about Ngok Chuen approaching her in 1993. When asked about 1993 she just repeated she did not see Ngok Chuen. I reject Madam Choi’s evidence. E2. Kan Hoi’s evidence and its evaluation 69.Kan Hoi adopts his two witness statements as part of his evidence-in-chief. Similarly, I do not intend to repeat the whole save and except the following key parts. 70.Ng Senior fell ill and knew that he could not recover in the beginning of 1986. By late August or early September of the same year, Ng Senior told Kan Hoi that he intended to transfer a few properties to the Children. Kan Hoi pointed out that nothing was left to Madam Choi. Hence, Ng Senior on his own decided that he would only transfer the properties to the Children if they agreed Madam Choi could enjoy the rental income from the properties during her lifetime. Ng Senior told Kan Hoi that such arrangement would ensure that Madam Choi could enjoy a comfortable life for the rest of her years. 71.In October 1986, Ng Senior told Kan Hoi that he had already transferred the Granville Road Property to Ngok Chuen, and Ngok Chuen agreed that Madam Choi could enjoy the rental income of the same during her lifetime and signed the 1986 Power of Attorney in her favour. The matter was handled by Ng Senior and his solicitors. 72.In 1993, Ngok Chuen approached Kan Hoi saying that he wanted to have the rental income. Kan Hoi was angry and disappointed. He yelled at Ngok Chuen and told him to raise this request again in 3 years’ time, if he was still in financial needs. He told Madam Choi the conversation he had with Ngok Chuen. In 1996, Madam Choi told Kan Hoi that Ngok Chuen approached her, and she agreed to let Ngok Chuen have the rental income. 73.Kan Hoi said that Ngok Chuen never told him or anyone of the family that he at anytime had any business in Canada. Ngok Chuen also never told anyone that he owned the house Madam Choi visited back then. 74.Without stating the reason in his witness statements, he stated that he found out the financial background of Ngok Chuen in around 2014. It turned out that Ngok Chuen all along had many properties even back in 1996, and he was and is never in any financial difficulty. 75.Those representing Ngok Chuen heavily criticised Kan Hoi’s evidence and his credibility. I agree Kan Hoi’s evidence is very unreliable. 76.Kan Hoi said at the beginning of his cross-examination that the rental income from the four properties would be deposited into Madam Choi’s passbook account and that the monies would be spent by her, without any re-investment [Day 3—p 60]. This was contrary to the practice and philosophy of investment of Ng Senior, and of Kan Hoi himself. This also seems to be inconsistent with one version of Madam Choi’s evidence that the rental income would be used by the companies for business purposes. At any rate, he was unable to explain how such large sums of rental incomewould be needed, or spent, by her. As the successor of the Family Business, even if Ng Senior were to say that Madam Choi should have all the rental income, Kan Hoi should sensibly suggest to Ng Senior that it was unnecessary,given her needs were not extravagant, and the need to use the rental income to continue and invest in the Family Business. Surprisingly, it appears to be Kan Hoi’s evidence that he “agreed” with Ng Senior’s “decision” that all the rental income should simply go to satisfy Madam Choi’s relatively modest needs. 77.I reject the submission that it is irrelevant that the income to which Madam Choi was purportedly entitled exceeded her needs, that Ng Senior intended Madam Choi to benefit from all the income not just to satisfy her needs, but out of his love and affection for his wife, who he loved deeply. It has to be borne in mind that Kan Hoi gave evidence that it was the original intention of Ng Senior that Madam Choi, who he loved deeply, should receive nothing at all and upon Kan Hoi’s reminder, Ng Senior decided to let Madam Choi have all rents of these properties [Day 3—p 61]. 78.Moreover, Kan Hoi was the one who changed Ng Senior’s mind. The absence of an explanation in Kan Hoi’s evidence on the rationale behind the change is unimpressive. 79.In my view, it is highly relevant and an explanation needed, or an absence of explanation heeded, that Ng Senior would ultimately “intend” that his wife should receive and keep life-long income which far exceeded her needs. The reason why I place much emphasis on an explanation is that I find it natural and consistent with the evidence that Ng Senior would, in accordance with his original intention, leave his wife nothing and make a gift, free from any condition, of the four properties to his four children. This is because the evidence shows that all the Children loved and respected Madam Choi. She was properly and adequately maintained before her husband’s death. There is no evidence to suggest that she would not continue to be so maintained by income generated from the business or by her children. Moreover, it was the consensus of the Children that Kan Hoi, Madam Choi’s natural and beloved son, was Ng Senior’s successor. Kan Hoi loves and respects his mother and would surely take good care of her after she was widowed. It is mind-boggling that Ng Senior would find it necessary to ensure that Madam Choi’s livelihood would need protection (not to mention such great protection) at all. 80.Kan Hoi’s account of what transpired or what was discussed between him and Ng Senior before his death in 1986 is incredible. On his version, it did not even occur to Ng Senior (who must have at least the best part of a year to think about the distribution of his assets since he fell ill sometime in 1985, before he eventually gave away the four properties in October 1986 just before he passed away) to leave anything to Madam Choi,even though he loved her very much. Then upon being pointed out by Kan Hoi, Ng Senior later in effect decided to give everything (ie a life interest in the four properties, plus those owned by Yanley) to his wife. It was odd enough that Ng Senior needed to be “reminded” by Kan Hoi that he had given nothing to his wife, someone he cared and loved deeply. It was strange that upon being “pointed out”, there was a ‘nothing to everything’ change which was not satisfactorily explained by Kan Hoi except repeating that it was ‘father’s decision’. It is incredible that Ng Senior did not decide, or Kan Hoi did not even suggest, giving only some of the income from some of the properties to Madam Choi, leaving the rest to be managed by Kan Hoi and Man Hing so as to earn more, in line with Ng Senior (and Kan Hoi’s) practice and philosophy. After all, it is the plaintiff’s case that Ng Senior and Kan Hoi together successfully built up the Family Business. It is not Kan Hoi’s evidence that they even considered that possibility. 81.He was evasive, stonewalled and refused to accept the obvious proposition that the rental income from the four properties (and Yanley) would greatly exceed what was necessary for Madam Choi to live a very comfortable lifestyle for the rest of her life. 82.Kan Hoi accepted that the 1986 Power of Attorney was explained to him before he signed. He repeatedly refused to answer the simple question whether anyone told him that the 1986 Power of Attorney was capable of being revoked and equally refused to accept the obvious fact that its terms did not give or protect any life interest of Madam Choi. 83.Despite Kan Hoi’s professed care for his family members and concern over their income and expenses, and that he was the undisputed leader of the family after 1986, he claims to not even have a vague idea as to what his very own step-brother, Ngok Chuen, had been doing since 1983. This was clearly a deliberate attempt to create a false impression of ‘distance’ from Ngok Chuen, and to deny any knowledge (which he must have) that Ngok Chuen could not have been in financial difficulties in 1993 or 1996 (or at any time). 84.Kan Hoi claims, incredibly, that he did not even ask about how Ngok Chuen made a living, whether generally, or specifically in 1993 or 1996, when Ngok Chuen was supposedly asking for the rental on the basis that he needed the money. 85.Kan Hoi accepted that Ngok Chuen could not have been in financial difficulty since he came back to Hong Kong in 2002. As such, he agreed it was ‘wrong’ for Ngok Chuen’s comfortable lifestyle to be supported by Madam Choi’s money. However, he was unable to provide any satisfactory explanation as to why the matter was never raised by him with his mother even though he considered it ‘wrong’. In my view, the only credible explanation is that he knew that Ngok Chuen was entitled to the rental income from the Property. 86.His repeated explanation that he simply let his mother make the decision in 1996 to allow Ngok Chuen to take the whole of the rental income out of ‘trust’ sits uncomfortably with his evidence that he scolded Ngok Chuen on his own volition in 1993. His own evidence shows that he was not shy in expressing his views about Ngok Chuen, which is contrary to his portrayal of silent trust in his mother. It is anomalous and does not chime with common sense. Effectively, Kan Hoi was asking the Court to accept that he allowed his dear family member, ie, his mother, to be duped by his younger brother, for 18 years (from about 1996 to 2014). It has to be considered against Kan Hoi’s evidence that he was proactive when reminding Ng Senior that he did not give anything to the mother in his Will. This is also inconsistent with his role as the patriarch of the family after father’s passing. This is as incredible as his purported explanation that he simply accepted his father’s decision to leave all rental income to his mother for life. 87.He gave three different, inconsistent, versions as to the use of the rental income collected from the four properties and Yanley after Ng Senior’s death, when all such income was supposed to belong to Madam Choi. On Day 3, when first asked, he said all such income was deposited into her passbook account, and the money would not be reinvested but spent by her. There was no mention of any deduction of the income to be used to pay the bank, or the use of money for any business purposes. Then, on Day 4, he said that all the income from the four properties and those ownedby Yanley would be just about sufficient to pay the bank, with ‘[j]ust a verysmall amount’ left for Madam Choi, which must (if true) be a fact known to Ng Senior and Kan Hoi as at October 1986. That would of course mean that Madam Choi would not be protected at all because she would be given almost nothing, contrary to the alleged intention of Ng Senior. No doubt realising the absurdity of this version, in re-examination, he put forward yet another version, namely that the rental income from Yanley’s properties, plus assistance from Hanley, would be sufficient to pay the bank, implying that the rents from the four properties would not be needed. But as said, this version suffers the defect of not being able to explain why in the first place, Madam Choi would be given rental income which would be far in excess of what she needed to live comfortably. While this happened a long time ago and Kan Hoi claims that he was not the person involved directly in collecting the rent and paying over to Madam Choi, his evidence here is not about dollars and cents but the ‘big picture’ which, as the head of the family, he must be aware of and able to recall. This inconsistency, without any reason, significantly discounts his credibility. 88.It is noted that Madam Choi’s own evidence as to the collected rent also changed in the course of her evidence. Her first version seems more in line with the first version given by Kan Hoi. But her second version is at variance with all three versions of Kan Hoi. Crucially, Kan Hoi did not say that he or the company, presumably Yanley or Hanley, would use the money from the four properties to ‘do business’ in any of his three versions. 89.Man Hing’s evidence was in line with the last version of Kan Hoi’s, and did not say that the money given to Madam Choi from the four properties was then used by Kan Hoi or the company to ‘do business’. These inconsistencies (internal and with the other witnesses) in the evidenceof Madam Choi and her own witnesses on this very important and core issue cast grave doubt on the credibility of Madam Choi, Kan Hoi and Man Hing. 90.His explanation of why land searches were only conducted against Ngok Chuen’s properties in Hong Kong for the first time in March or April 2014 is also entirely incredible. He gave no explanation at all in his witness statement, and the very first time he attempted to explain was in cross-examination. 91.One of the alleged reasons suggested by Kan Hoi was because he was ‘worried’ about whether Ngok Chuen had ‘financial problems’ after a Yanley meeting held on 8 July 2013. However, this does not make sense given that his own evidence was that from 1993 up to 2014 Kan Hoi had always thought that Ngok Chuen was in financial difficulties. If that were true, there can be no genuine reason why he chose March or April 2014 as opposed to any other earlier date to investigate. From being someone who supposedly did not ask a single question of his stepbrother as to his financial situation for at least 31 years (from 1983 to 2014), Kan Hoi all of a sudden turned into a caring elder brother. 92.The other alleged reason was a professed concern that Ngok Chuen had ‘health problems’ because he was thinking of making a will. Kan Hoi was unable to explain why he did not simply ask Ngok Chuen whether he had any health problems instead of investigating into his properties, which would never give him an answer on how healthy Ngok Chuen was. When pressed on these questions, Kan Hoi gave the excuse that they had not been in contact with Ngok Chuen. 93.His evidence was self-contradictory. He claims that the searches were performed to see whether Ngok Chuen needed help. However,even on Kan Hoi’s own evidence, an offer of HK$50 million odds for Ngok Chuen’s company shares was already made by Ngok Chuen on 8 July 2013 without the need for any searches at all. Nor is there any sensible explanation as to why it took around nine months after July 2013 for these searches to be done. If Kan Hoi was truly concerned about Ngok Chuen, one would have expected a quicker response. 94.The consistent theme of his evidence was ‘stonewalling’, refusing to directly answer questions and constantly repeating ‘rehearsed’ answers without attempting to give a genuine and truthful response to the Court. Based on the observations above, I reject Kan Hoi’s evidence entirely and place no weight on any of his evidence. E3. Man Hing’s evidence and its evaluation 95.Man Hing adopts her two witness statements as her evidence in chief. 96.Man Hing said that Ng Senior told her he would transfer a property to her subject to the condition that she would let Madam Choi have the rental income for her lifetime, an arrangement Ng Senior raised with all the Children. Man Hing agreed to the arrangement and Ng Senior told Man Hing explicitly that the other Children, including Ngok Chuen, also agreed to the same for their properties. She signed a power of attorney believing that would achieve what Ng Senior has told her. 97.The property she received from Ng Senior was sold in 1989 to help Yanley’s business. Madam Choi agreed to the arrangement. She was subsequently compensated by Kan Hoi. 98.She was not involved in neither the 1993 nor the 1996 discussion between Ngok Chuen and Kan Hoi and/or Madam Choi. But she was told by both Kan Hoi and Madam Choi at the respective time about Ngok Chuen’s request. 99.For all the years, Ngok Chuen never stayed with Madam Choi or Man Hing. Hence, Ngok Chuen was rather distant and had never shown any of his toy samples of his business to her or told her about himself. 100.In 1993, Ngok Chuen helped Man Hing to apply for immigration to Canada. Ngok Chuen sent Man Hing forms to sign. Man Hing simply signed all of them without having the content explained to her. One must note that these forms contain crucial information about Ngok Chuen’s financial background, which supports the immigration application. 101.I agree with the criticisms made by those representing Ngok Chuen. Man Hing was clearly an evasive, incredible and dishonest witness. I reject her evidence entirely. 102.Man Hing gave evidence that the total rental income from the properties was about HK$150,000 per month. She was reluctant to even accept that HK$150,000 per month was a substantial sum of money in 1986by any standard, let alone for a lady with no business or investment activities and was a rather, as she accepted, ‘down-to-earth person’, not given to extravagance at all. This was her approximation of the rental income of all four properties Ng Senior transferred to the Children. In answer to a question from the court whether $150,000 was substantial, she said that this was ‘difficult to tell’ [Day 4—p 101]. This was even though she later admitted that she was able to live very comfortably with HK$7,000 to HK$8,000 each month supporting herself and her two sons (with support from the Family Business paying for domestic helper, etc). This showed her marked determination to refuse to agree to any question which she perceived was adverse to her evidence, even though the answer was blindingly obvious. 103.Man Hing accepted that the power of attorney she signed in 1986 was explained to her by a lawyer. Her evidence as to what she was explained was unequivocal, namely, that ‘the document authorised the grandmother (meaning Madam Choi) to collect rent until the end of her life’ [Day 5—p 10]. 104.However, the clear and confident nature of her evidence is entirely incredible since this is not what her power of attorney says, which has the same effect as the 1986 Power of Attorney of Ngok Chuen, and it is difficult to believe that any such explanation would have been given to her by a lawyer. 105.Her evidence that she simply believed Ngok Chuen without even asking a single question when he allegedly approached Kan Hoi in 1993, and to Madam Choi in 1996, about his financial difficulties is equally incredible. 106.Moreover, her unqualified assertion that she did not talk to Ngok Chuen at all between 1983 to 1996 is wholly untrue (no doubt in an attempt to support her case that she thought and believed Ngok Chuen to be not doing well). This was plainly a lie because, even on her own case, Ngok Chuen contacted her on her immigration application to Canada in 1993. Moreover, she admitted that she visited Ngok Chuen and stayed in his house in Toronto within that time. In any event, her denial of even seeing Ngok Chuen at all when he came back to Hong Kong between 1983 and 1996 is incredible. 107.Equally, her evidence in relation to her immigration application is completely incredible. In essence, she said that Ngok Chuen suddenly contacted her out of the blue in 1993 to ask her to apply for immigration and help her on her immigration application, and requested a payment of $300,000 for that purpose. She repeatedly tried to explain this by her wanting ‘free education’ for her children. Her account is inconsistent with her own alleged case of a lack of contact between 1983 to 1996, and it is incredible that she would have suddenly agreed to pay $300,000 to Ngok Chuen when she claimed to have the belief that he was in financial difficulties, or was allegedly a lazy, wandering person who had actually taken money from the family without authority. This shows that Man Hing is simply a witness who refuses to tell the truth. 108.Her evidence that she ‘had no idea how this form was filled out’ is plainly untrue. There were details in the immigration form which Ngok Chuen could not know about (eg, the name and date of birth of her ex-husband) and which could have only been filled in with the assistance of Man Hing. Her evidence that she simply signed the forms without someone interpretingthem for her is equally incredible. Plainly, her evidence on the immigration application was simply another attempt to distance herself from the fact that she knew he had a toy business in Canada, which appeared in the immigration form. 109.Her account of her visit to Ngok Chuen’s house in Toronto bordered on the surreal and was a lie. She refused to accept that she saw afairly big house between 4,000 – 5,000 square feet, suggesting that she wassimply shuttled by Ngok Chuen from the airport to the basement of the house. She even claimed not even to have taken a glimpse of Ngok Chuen’s house on that occasion. Rather, Ngok Chuen’s evidence that she did visit him twice and had seen his house clearly is certainly to be preferred. 110.As with Kan Hoi, Man Hing simply stated that she ‘believed’ in mother when Ngok Chuen suddenly started to receive around HK$3 millionper year in rental in 1996 without raising any objection at all. It is incredible for Man Hing to have sat idly by while her stepbrother, who she regarded as worthless, suddenly received such a substantial sum of money for an indeterminate period of time, to the detriment of her mother. 111.Her lack of action over what she claimed was a ‘wrong’ situation,namely Ngok Chuen continuing to live a comfortable life in Hong Kong after2002, again shows that there could not have been any agreement conferring a life interest in the rental income to Madam Choi. 112.Finally, her evidence in relation to why Kan Hoi decided to do the searches in March and April 2014 was curiously similar to the oral testimony of Kan Hoi on the same matter, even to the extent of her clearly recalling the exact date of the 8 July 2013 shareholders meeting. In any event, her explanation that ‘we were worried because, after all, we are family’ is sheer nonsense in the context of her evidence overall. 113.Hence, I reject Man Hing’s evidence entirely. F. Evidence of Ngok Chuen 114.Ngok Chuen is the only witness for the defendant. He adopts his two witness statements as part of his evidence-in-chief. His evidence is mostly identical to his pleaded case and I do not intend to repeat here save and except the following parts. 115.He executed the 1986 Power of Attorney in favour of Madam Choi because he was residing in the United States and he needed a representative to take care of the matter with respect to the Granville Road Property. He further elaborated in his cross-examination that Kan Hoi senthim the documents of assignment and the 1986 Power of Attorney for signing. He did not find anything wrong with the 1986 Power of Attorney because it occurred to him he would need someone to handle the rental affairs for him, thus he signed. 116.Madam Choi asked Ngok Chuen to sign a power of attorney in 1997 with broader scope of authority in relation to the Granville Road Property including the authority to mortgage and borrow money from banks. Ngok Chuen declined to sign the same and instructed his solicitors to draft the 1997 Power of Attorney with standard terms authorising Madam Choi to manage and deal with the Granville Road Property. Madam Choi and her witnesses did not agree to the existence of these events. 117.Madam Choi had visited Ngok Chuen at his place at 129 AlfredAvenue, North York, Toronto before his return to Hong Kong in 2001 or 2002. Madam Choi had also visited his toy warehouse and retail shop in Toronto. 118.Since his return to Hong Kong, Madam Choi had also visited his places at the Belcher’s, the Clovelly Court and the Sorrento. 119.As to the letter dated 7 May 2014 written by his previous legal representative Messrs Wong and Partners Solicitors, it says:
Ngok Chuen explained that the focus of the letter was on the income of Yanley rather than the rental income of the Granville Road Property. In hiscross-examination, he explained that he did not think about the true meaning of the word “belong” and it does not constitute an admission that there was an agreement between him and anyone else that Madam Choi would have a life interest in the rental income of the Granville Road Property. 120.He applied for immigration for Madam Choi and Ng Man Hingin 1989 and 1993 respectively. He provided particulars of his businesses insupport of both applications, which would show that he was not in financial difficulty as alleged by Madam Choi and her witnesses. 121.It is noted that part of his evidence is unclear. However, I find that Ngok Chuen overall was an honest, forthcoming and truthful witness. I prefer his evidence over all of the plaintiff’s witnesses. 122.Unlike the witnesses for Madam Choi, and Madam Choi herself,Ngok Chuen did not stonewall and frankly accepted matters which might be perceived to be adverse to him. Nor did he seek to assert matters which would be to his advantage but which he frankly admitted he did not (understandably) remember. 123.For example, Ngok Chuen referred to a telephone conversation with Ng Senior prior to his death. He could not remember the date of the phone call. He only remembered it was about the time of a surgery Ng Senior received between 1985 and 1986. Rather than seeking to deny the existence of such a conversation, which he could have done so given that only he and Ng Senior were on the telephone call, he tried his best to recall its details to assist the Court. He could also have simply asserted with greater certainty the timing of his conversation with his father during which he was told that he would be given the Granville Road Property without any condition. 124.Another example is where Ngok Chuen testified and accepted that Kan Hoi told him around Ng Senior’s death that the other three siblings also received transfers of properties, and that they would also give their income to Madam Choi. He could simply deny it but he did not. 125.He could also have insisted, for example, that Man Hing did visit his businesses in Canada instead of saying he could not remember. He did not stonewall or insist on the incredible. That he was unable to recall details of matters that happened a long time ago (as distinct from the ‘big’ picture such as the lack of any agreement with Ng Senior) and which would not appear to be important to him at the time (such as the timing of his telephone conversation with Ng Senior as opposed to the contents, or whether Man Hing visited his warehouse in Canada) is understandable, and he did not pretend otherwise. 126.Nor did he fabricate his thought process to his advantage for example, he could have denied totally that Kan Hoi did say something about living like a man to him, yet he frankly admitted that too. 127.Mr Shieh criticised that much of Ngok Chuen’s evidence did not appear in Ngok Chuen’s witness statement and was only said for the first time during examination-in-chief and/or cross-examination. He submitted that this gave rise to the strong inference that Ngok Chuen was making up his evidence whilst giving evidence. He also complained that Mr Wong SC (together with Mr Pao), counsel for Ngok Chuen, had not put their case (of the “new” evidence) to any member of Madam Choi’s camp. 128.I do not accept the criticisms. First, when Mr Wong elicited evidence of Ngok Chuen during in-chief, Mr Shieh did not strenuously oppose but simply put down a marker that he would go along with the evidence until he objects and reserve his right to make submissions [Day 6—p 7; Day 7—p 36]. Hence, all the evidence-in-chief of Ngok Chuen can actually be said to have been adduced with Madam Choi’s permission. Once the evidence is adduced, the Court must consider the evidence and Madam Choi must deal with it accordingly. Secondly, if Madam Choi finds it necessary to deal with the new evidence (given in-chief) or finds that she needs more time to deal with the new evidence, she could always apply for an adjournment upon which the Court would determine the matter in a fair manner, after hearing submissions from both sides. Madam Choi may also apply to re-call some or all of her witnesses to deal with the new evidence. Madam Choi could insist Ngok Chuen should put the case to the witnesses who can then explain his/her position. Again, if such application is made, the Court will give directions accordingly after due consideration of submissions. The plaintiff did not do so. I find the complaint without merit. 129.Hence, I accept Ngok Chuen’s evidence and make findings of fact as to what happened in 1986, 1993, 1996 and after Ngok Chuen came back to Hong Kong after 2002, and at all times in between, according to his evidence. G. Issues to be determined 130.This is Madam Choi’s action and she has the burden to prove her case. The standard of proof is balance of probabilities. 131.The main and the only crucial issue of Madam Choi’s claim is that the Court has to find, on the facts, whether the transfer of the Granville Road Property was subject to a condition imposed by Ng Senior that Madam Choi has an interest in the rental income of the same during her lifetime. 132.If the Court rejects the existence of such a condition on the facts, Madam Choi’s entire claim fails, and that would be the end of Madam Choi’s action. 133.The following issues only become relevant if the Court finds that the transfer was subject to the alleged condition:
H. Was the transfer of the Granville Road Property subject to a condition imposed by Ng Senior that Madam Choi should have an interest in the rental income of the same during her lifetime? 134.It is most important to determine what happened in 1986. What were the factual circumstances under which the Granville Road Property came to be transferred to Ngok Chuen? In particular, was there an agreement between Ng Senior and Ngok Chuen that the transfer was subject to the condition that Madam Choi would receive all the rental income for as long as she lives, or was it just a mere wish of Ng Senior, conveyed by Kan Hoi to Ngok Chuen after Ng Senior’s passing, that his widow should receive the rental income? 135.Madam Choi, Kan Hoi and Man Hing gave evidence in support of Madam Choi’s case. 136.They maintained that the transfers of the properties by Ng Senior were conditional upon each of the children agreeing that Madam Choi would enjoy an interest in the rental income of the properties during her lifetime. They said the execution of similar or almost identical powers of attorney is cogent evidence that these were instruments to implement the condition of mother’s receipt of the income. They also rely heavily on the letter dated 7 May 2014 from Ngok Chuen’s solicitors, arguing it constitutes an admission by Ngok Chuen of the existence of the condition. 137.Ngok Chuen denies there was such an agreement with his father but said he was told by Kan Hoi after Ng Senior’s death that it was his father’s wish to let his mother collect the rent, which he complied. 138.It is Ngok Chuen’s case that there was a mere moral obligation to let his mother receive the rental income. 139.Thus, whether it was a condition or a mere wish is pivotal, indeed, almost determinative of the whole case. If it was a condition imposed by Ng Senior upon the transfer, Madam Choi would have an interest in the rental income of the Granville Road Property, upon satisfying the legal requirements, as agreed by Ngok Chuen. On the other hand, if it was a mere wish, then it was not binding upon Ngok Chuen and Madam Choi’s case stands to be dismissed. 140.It is important to set out Kan Hoi’s account on the agreement. This is contained in §§14 – 19 of his witness statement:
141.It is clear from Kan Hoi’s own statement that it was Ng Senior’s original intention to make an outright gift of the four properties to the children without any condition. However, Ng Senior appeared to have changed his mind after discussion with Kan Hoi and imposed the conditions onto the purported transfers. 142.I have already indicated some of my views on this point above when I discussed the reliability of Kan Hoi’s evidence. I would add that I struggle with this inexplicable change of mind of Ng Senior. I note that the plaintiff had never attempted to introduce any evidence to explain Ng Senior’s change of mind. 143.There is no evidence to suggest that Madam Choi was not living comfortably or not well-provided for whether before or at around the time of Ng Senior’s death. To the contrary, the evidence is that Ng Senior loved his wife and the children had a good relationship with her. She was not a high maintenance lady and although not to the point of being frugal, did not spend much at all. I also find that she had been deliberately vague about her spending. 144.The witness statement of Kan Hoi did not give details of the discussion he allegedly had with his father. There is no explanation and no evidence to understand what caused Ng Senior to suddenly feel that he had to “ensure” that after he passed away, his wife, who was all along well catered for and who maintained a good relationship with her children, should receive all the rental income to maintain her standard of living (which was not high) or there was the need to ensure that she would continue to enjoy a comfortable life as before. 145.Indeed, the evidence is that Madam Choi did not need all the rental income before Ng Senior’s death. Why would she need all the rental income after his death? If the extra income in excess of her needs was to express Ng Senior’s love for her, why did Ng Senior not even think about itin the first place and had to be reminded by Kan Hoi? There is no evidence that Madam Choi’s expenses had suddenly increased at around the time of Ng Senior’s death, why would she need all the rental income, to the point of ensuring that she would be able to live comfortably thereafter? 146.Furthermore, it is not in dispute that before Ng Senior’s death, all the profits made from Yanley or the four properties were used for investment in the family businesses including Hanley and for buying properties. The rental incomes of these four properties had never been devoted to the exclusive use of Madam Choi. The evidence does not support that she had ever needed the rental income for a comfortable life style or for her own living. Nor did the evidence come anywhere near suggesting that after Ng Senior passed away, the widow would not be well taken care of. 147.Why would Ng Senior take such a drastic step of imposing as a condition for the transfer? This must be a drastic step bearing in mind that only within a relatively short period of time, indeed after one discussion with Kan Hoi — and I note from the evidence of Kan Hoi that it appeared to be one conversation only — that he changed his mind completely from making outright gifts to his children, with nothing at all to his wife, to transferring the properties to the children only upon their agreement that they would let Madam Choi enjoy the exclusive use of the rental income during her lifetime. As Mr Wong submitted, this is a “nothing to everything” change which cries out for an explanation. 148.Moreover, there is no evidence or nothing to suggest that either or all of the children would ill-treat their mother such that Ng Senior would think it necessary to impose a condition upon the gift to his children that they must hand over the rental income to mother for life. The imposition of the condition is almost a vote of no confidence to the children. This is totally against the evidence that Ng Senior and in particular, Madam Choi, had a good relationship with all the four children. 149.It is noted that Madam Choi would not need much money to maintain a living. Despite that Madam Choi was rather dodgy when being questioned about how she spent, the overall impression was that she was not given to extravagance. I have difficulty understanding why all the rental income in all the four properties had to be assigned to her for the purpose of maintaining an admittedly non-luxurious life style. The perplexity is compounded when this is totally contradictory to Ng Senior, and in fact Kan Hoi’s, philosophy of investing incomes in properties. 150.It strikes as odd that the Ng Senior would see fit to discard the policy of using the profits (which must include the rental income) from the properties to partly invest and to partly maintain his wife. 151.Moreover, Kan Hoi was the de facto patriarch of the family even before his father’s death. In fact, he assumed the role of head of the family after his father became seriously ill. He was in control of the Family Business. The agreed evidence of Madam Choi’s camp is that her husband would use some of the profits generated from these to maintain her and the family. Why would that change after Ng Senior’s death? Kan Hoi is Madam Choi’s natural son and Kan Hoi loves and respects his mother. There is not an iota of evidence that this arrangement of using some of the profits of the family businesses to manage the livelihood of Madam Choi and the family should change in order to ensure Madam Choi’s comfortable living. 152.All the siblings respected and regarded Kan Hoi as the head of the family. This was acknowledged without reservation even by Ngok Chuen who said the following during cross-examination:
153.I find it improbable that Ng Senior would make the gift conditional. Obviously, when he first raised the issue of gifting the properties to the Children to Kan Hoi, it was not his intention at all to make it a conditional gift. Furthermore, as stated above, Madam Choi was well looked after before Ng Senior’s death with some of the profits generated from the Family Business and the properties of the family. In 1986, Madam Choi lived in a self-owned property with no need to pay rent. She also had her own properties which generated rental income. It ought to be the case that Kan Hoi who would succeed his father’s role and became head of the family and businesses, and who respected his father and who loved his mother, would not upset the status quo and deprived the mother of the livelihood she used to enjoy before his father’s death. 154.Indeed, the overall tenor of the evidence plainly suggests Ng Senior would have no worry that his children would take good care of their mother even without the condition being imposed upon the gift. Put the other way round, the evidence suggests nothing which would put Ng Senior to doubt his children’s loyalty such that he saw fit to make the gift conditional upon their agreement to give Madam Choi a life-long interest in the rental income. It is important to note that the only reason in evidence attributed to Ng Senior to explain why he imposed the alleged condition was the concern over making adequate provision for Madam Choi. There is an absence of a credible explanation which is convincing to me. 155.The purported assignor of the life interest, Ng Senior, has been deceased for over 30 years and the general recollection of the purported assignee, Madam Choi is unclear and unreliable. Her case of a life interest does not align with the evidence that for 18 years between 1996 and 2014, she did not assert her interest at all in relation to the rental income of the Granville Road Property. Indeed, with Madam Choi’s full knowledge, Ngok Chuen collected the rent in full from the Granville Road Property. She could see with her own eyes that he had been living comfortably in luxurious flats, yet nothing was done. The artificiality of this, coupled with her reliance of the alleged isolated 1996 Representation by Ngok Chuen to explain her inactivity, undermines the credibility of her case on life interest. 156.Hence, I reject Madam Choi’s claim that the transfer of the Granville Road Property was subject to the alleged Assignment or any condition giving effect to her life interest in the income of the Granville Road Property. She has failed to discharge her burden of proof on the facts. 157.My finding is reinforced by Ngok Chuen’s evidence which I prefer over the evidence of Madam Choi, Kan Hoi and Man Hing. 158.According to Ngok Chuen, his father first told him that he would receive Ngok Chuen’s property at around the time of his operation, which later came to be known as some time in 1985 or 1986. 159.His father did not mention any condition at all. This is consistent with the plaintiff’s case. Even Kan Hoi stated in his witness statement that when his father raised the issue of distributing the properties to the Children in August/September 1986, shortly before he died, his father did not think of imposing the condition. 160.Mr Shieh commented that it is unlikely that Ngok Chuen would appoint Madam Choi as his attorney knowing full well that Madam Choi would not tend to these matters. He could and would have appointed his other siblings or members of his wife’s family if not for the condition. 161.I accept Ngok Chuen’s evidence that it did not matter he appointed Madam Choi as he knew in the end that his siblings would handle the matter for Madam Choi, in line with the practice over the years. 162.I accept Ngok Chuen’s evidence that he allowed Madam Choi to retain the rental income of the Granville Road Property from 1986 to 1996 out of his respect to Ng Senior’s wish, which Kan Hoi told Ngok Chuen in the telephone call after Ng Senior’s death. 163.This Court is entitled to take into account any contemporaneous documents which contain or evidence, or purport to give effect to the alleged life interest. 164.The plaintiff relies on the 1986 Power of Attorney. It is Madam Choi’s contention that the 1986 Power of Attorney signed by Ngok Chuen in her favour reflected and embodied her entitlement to receive all income from the Granville Road Property for her lifetime and on its own is a piece of evidence pointing towards the existence of the alleged life interest. 165.However, one must note that the 1986 Power of Attorney expressly states that the acts to be performed by Madam Choi, including leasing the Property, were to be performed in the name and on behalf of Ngok Chuen. This establishes that the legal entitlement to the rental income from the Property vested in Ngok Chuen, not Madam Choi. 166.Both Kan Hoi and Man Hing gave evidence that they were informed by Ng Senior that the powers of attorney which they were required to sign were for the specific purpose of enabling Madam Choi to receive rental from the properties during her lifetime. Those representing Madam Choi submitted that there can be no other plausible reason or purpose for the 4 powers of attorney to have been signed at the material time in October 1986. 167.I disagree. I agree with Ngok Chuen’s submission that the execution of the 1986 Power of Attorney by Ngok Chuen and the three other powers of attorney of the three siblings between 20 and 24 October 1986 contradicts the existence of a life interest held by Madam Choi in the rental income from the Property. 168.The 1986 Power of Attorney, and the other three powers of attorney executed by Ngok Chuen and his siblings, were prepared by Messrs Philip KH Wong & Co. It is the evidence of the Madam Choi’s camp that the contents were explained to Kan Hoi and Man Hing before they signed. The family had access to solicitors in Hong Kong before Ng Senior’s death on 29 October 1986. Kan Hoi’s evidence was that Ng Senior went to a firmof solicitors to effect his plan of ensuring the life interest in rental income to Madam Choi. If Madam Choi’s case was indeed true, there is no sensible explanation as to why a deed, instead of a power of attorney, which could accurately reflect Ng Senior’s intention to confer a life interest on Madam Choi was not prepared and executed. Certainly, no credible explanation has been suggested by Madam Choi or her witnesses. 169.The 1986 Power of Attorney was not irrevocable. Ngok Chuen,as the donor, was entitled and free to unilaterally revoke the authority given to Madam Choi under the 1986 Power of Attorney at any time. This is inconsistent with any suggestion of lifetime protection being given to Madam Choi. 170.It is Madam Choi’s legal contention that a power of attorney with interest of the donee might be irrevocable in some cases: Angove’s Pty Ltd v Bailey[2016] 1 WLR 3179 and Schindler v Brie[2003] EWHC 1804 (Ch). Be that as it may, if it was Ng Senior’s wish to secure Madam Choi’s life interest in the rental income and it was the solicitor’s intention to give effect to the same, those representing Ng Senior could have chosen a different instrument, such as a deed, or to make the 1986 Power of Attorney explicitly irrevocable. However, none of these were done. 171.Plainly, the fact that there was the 1986 Power of Attorney in existence does not of itself suggest that Madam Choi was entitled to the rental income. As a matter of fact, even after the 1997 Power of Attorney was executed, Ngok Chuen received the rental income from the Property. 172.Accordingly, the 1986 Power of Attorney is not cogent evidence that proves the existence of the alleged life interest. In fact, it rather proves the contrary. At most, it could only be said to be neutral evidence. 173.As regards the Wong & Partners letter dated 7 May 2014, it is important to consider the letter in its proper context. This was a response to a letter dated 29 April 2014 from the solicitor of Madam Choi’s camp, concerning the affairs of Yanley. I agree with the defendant that this cannot be construed as an admission that Madam Choi had a legally enforceable life interest in the rental income of the Granville Road Property. I accept Ngok Chuen’s evidence that his understanding of “arrangement” was based on whether he agreed to let Madam Choi collect the rent as was the case in 1986 to 1996, but could be changed subsequently. 174.In any event, it remains the burden of the plaintiff to prove her case on the balance of probabilities. She has failed to do so. She cannot simply pinpoint parts of Ngok Chuen’s evidence, submits that it is unsatisfactory, for the purpose of discharging her onus of proof. 175.I find that Ng Senior never imposed a condition onto the transfer of the Granville Road Property that Madam Choi shall enjoy the rental income of the same during her lifetime. On the facts, there was no assignment of a life interest by Ng Senior or Ngok Chuen to Madam Choi; there was no agreement to assign the life interest between Ng Senior or Ngok Chuen and Madam Choi; and there was no agreement between Ngok Chuen and Ng Senior to assign a life interest to Madam Choi. 176.To put it in the simplest terms, I do not accept and I find against that it was Ng Senior or Ngok Chuen’s intention to give Madam Choi a life interest in the rental income of the Granville Road Property. 177.As I have rejected Madam Choi’s case on the facts that the transfer of the Granville Road Property was conditional upon her life interest, this is the end of the matter. But in deference to counsel’s submissions, I shall briefly deal with a few other matters raised in argument. I. What is the legal nature of Madam Choi’s interest in the Granville Road Property? How was it created? Is it legally valid and enforceable? 178.Mr Shieh sought to amend his pleadings on the first day of the trial to incorporate the doctrine of constructive trust. I dismissed his application in my judgment dated 14 February 2017. 179.The pleadings of Madam Choi, ie paragraphs 3 – 5 and the Assignment, was drafted skilfully to encompass multiple legal avenues. Therefore, it has not been entirely clear to the Court the exact legal doctrine Madam Choi seeks to rely on until the very end of the trial. The most effective way to deal with Madam Choi’s purported legal basis would be to analyse the principles she purports to rely on one by one. 180.In her Closing Submissions [§§69 and 70], Madam Choi for the first time comprehensively articulates the basis of her claim:
J(1). Creation of a life interest 181.It was said by Mr Shieh in his closing submissions [§§22 – 23] that:
182.With respect, I disagree with Mr Shieh’s submissions. 183.Regardless of whether Ngok Chuen has challenged the legal basis of Madam Choi’s case on life interest, it is subject to legal requirements. It cannot be said that, because Ngok Chuen did not explicitly take issue with the legal basis of Madam Choi’s case on the life interest, the Court is at the liberty to disregard the legal principles of the matter. The burden is on Madam Choi to pinpoint the exact legal principle she relies on. In fact, Ngok Chuen broadly yet sufficiently challenged the legal basis of Madam Choi’s entire case in his pleadings [Defence §§17 – 18]:
184.It is fair to say the “creation of life interest” was never Madam Choi’s case. It was not in her Opening Submissions (In fact, Madam Choi only relied on equitable assignment in its Opening Submissions: §§51 – 78 of the plaintiff’s Opening Submissions.) Hence, it was naturally not distinctly addressed by Ngok Chuen in his Opening and Closing Submissions, which the parties exchanged. 185.In the absence of an exact identification of the legal principles Madam Choi seeks to rely on, I would not entertain this “creation of life interest” legal argument as a separate and independent basis of Madam Choi’s case. J(2). Equitable assignment by Ng Senior to Madam Choi of the incomefor life; equitable assignment by Ngok Chuen and/or agreement to assign to Madam Choi the right to the income for life 186.Madam Choi’s alleged assignment cannot be a legal assignment as it is not in writing. This cannot be disputed: section 9 of the Law Amendment and Reform (Consolidation) Ordinance, Cap 23. 187.The subject matter of the alleged Assignment is a chose in action, namely, the right to receive rent from the Granville Road Property. Parties are in agreement that it is an element of an equitable assignment that the chose in action must be in present existence: The Law of Assignment (2nd edition), Smith & Leslie at §13.02. 188.Not being property, an expectancy cannot be assigned at law or in equity. Equity considers the purported assignment of an expectancy to bean agreement to assign, but will only enforce the agreement if it is supported by consideration. Consideration is vital. Examples of future property which could only be the subject of an agreement to assign in equity (but which must be supported by consideration to be enforceable) are future income from specified property, or money under a contract (such as a lease) not yet formed: seeHeydon, Leeming and Turner, Meagher, Gummow and Lehane’s Equity: Doctrines & Remedies (5th edition, 2015) at §6-195. 189.In Guest on the Law of Assignment (2nd edition, 2015) at §3-48, it is stated that:
190.Insofar as leases which were not existing in 1986, the right to receive income from such leases could only amount to a future chose in action, or in other words, a mere ‘expectancy’ that there would be a source of potential income from future leases which were not yet in existence. Such income, therefore, can only be the subject matter of an agreement to assign, only enforceable if supported by consideration from Madam Choi. 191.It is also not disputed between the parties that as a matter of law, there can only be an assignment of an existing chose in action; and that a future chose cannot be the subject of an assignment, but only an agreement to assign, which ought to be supported by consideration. 192.It is critical that there is no allegation or pleading of any consideration being given by Madam Choi for her life interest in the rental income. In fact, it is not her case that she provided any consideration. Her evidence was precisely the opposite. She said, “he said the rental income of these four properties would all go to me.”[Day 2—p 63]. 193.Neither Madam Choi nor Ngok Chuen produced any evidence that the leases of the Granville Road Property which were already in existence in October 1986 continued until 1996, prior to the factual complication of the alleged Representation and Ngok Chuen receiving the rental income of the Property. I find that, on balance of probability, the leases of the Property in October 1986 were no longer in existence in 1996. I shall elaborate this further below. 194.It means that, even if there was an equitable assignment, which I find against, of the interest in the rental income of the Property by Ng Senior/Ngok Chuen to Madam Choi in October 1986, by the time when Ngok Chuen began receiving the rental income in 1996, Madam Choi’s interest in the rental income of the leases which existed in October 1986 hadalready been extinguished by the subsequent leases that came into existence. Thus, her claim based on equitable assignment fails. 195.On the other hand, given Madam Choi provided no consideration for the alleged agreement to assign, her claim based on Ngok Chuen’s agreement to assign also fails. Thus, Madam Choi’s claim fails as a matter of law. 196.Mr Shieh seeks to argue that the burden is on Ngok Chuen to adduce evidence that the 1986 leases did not continue beyond 1996, as it is Ngok Chuen’s legal argument that there could be no equitable assignment or an agreement to assign for a future chose in action. I disagree. Madam Choi pleads and relies on an assignment or an agreement to assign: see §5 Statement of Claim. She has the carriage of the action and it is for Madam Choi to prove each and every element of her case, that the subject matter is an existing chose in action capable of being assigned; or the subject matter can be the subject of an agreement to assign, in the case of a future chose in action, and that agreement is enforceable and supported by consideration. This involves Madam Choi to introduce evidence that she is entitled to all the life-long rental income of the Property from 1986 onwards. 197.Even if I am wrong, I am of the view that the evidence before the court establishes on the balance of probabilities that the leases did not last beyond 1996. On the evidence before me:
198.It is very unlikely that any lease, without having a particular reason, could last for a decade, without any alteration and/or renewal. In the absence of supporting evidence, I find it unlikely that the leases back in 1986 would last till or beyond 1996. As said, the burden is on the plaintiff to establish that the leases back in 1986 last past 1996. The plaintiff has failed to discharge the burden. 199.Hence, even if there was any equitable assignment of existing chose in action in 1986, which I find against on the facts, Madam Choi’s interest would lose its validity and/or enforceability in or after 1996, when the original leases were or had been replaced by the new ones. 200.Accordingly, from 1996 onwards, Madam Choi no longer had any interest in the rental income of the Granville Road Property in law arising from any equitable assignment or agreement to assign by Ng Senior/Ngok Chuen to Madam Choi. K. Misrepresentation 201.As I have found that there was no condition imposed by Ng Senior that Madam Choi shall have an interest in the rental income of the Granville Road Property, the suggestion that Ngok Chuen would need to lie to get back the rent is unbelievable. Ngok Chuen was entitled to claim the rent back or revoked his goodwill to allow his Madam Choi to retain the rent at any time. 202.Significantly, as the averment of misrepresentation is based on unjust enrichment, it can be nothing unjust for Ngok Chuen to get back what he was entitled to (or what Madam Choi had no right to) in the first place. In other words, Madam Choi would have no right to gift the rental income. 203.Furthermore, Madam Choi’s case is one of fraudulent misrepresentation by Ngok Chuen. This is a very serious allegation involving dishonesty. The Court would normally require cogent evidence because the inherent probability of fraud is unlikely. This does not mean that the standard of proof required is higher. It only means that the more serious the allegation the less likely it is that the event occurred and hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probabilities: Re H (Minors) (Sexual abuse: standard of proof)[1996] AC 563, per Lord Nicholls at pp 586 – 587. 204.Here, even on Madam Choi’s own case, there was no mention by Ngok Chuen that he was in financial difficulty at all:
205.Even if Ngok Chuen did say he wanted to get back the rent to raise his children, there is nothing fraudulent about it. 206.The evidence adduced falls far short of a case of fraudulent misrepresentation. On Madam Choi’s case, Madam Choi and Man Hing had respectively visited Ngok Chuen’s big house in Toronto. It is not as if Ngok Chuen had been pretending to be poor, or was trying his best to concealhe lived in a big house, nor indeed, could he do so. There is no dispute thathe did sponsor Man Hing’s immigration, an act which was totally inconsistent with what a man in dire financial straits would or could do. 207.I also bear in mind that any belief that Ngok Chuen suffered from financial difficulties from 1996 onwards was the perception and I would say, a very strange perception by Madam Choi, Kan Hoi and Man Hing. I said strange because after all they were family members. They would know, or had little difficulties finding out how their youngest brother was doing well. Even if they were in doubt, all it took was just to ask. Unbelievably, it was the concerted evidence of all the plaintiff’s witness (including Madam Choi herself) that all these 18 years from 1996 to 2014, they did not ask one question about Ngok Chuen alleged financial difficulties, even though they must know from Ngok Chuen was doing well during casual chats amongst family members, that they did meet up for meals, even went to his luxurious home for mah-jong and gatherings during Chinese New Year, that Madam Choi and Man Hing had visited Ngok Chuen’s in his house, that (at least) Man Hing would know her brother was running a good business in her immigration papers, that when her brother stayed in her place (which was denied by Man Hing), she saw toys samples of his business, etc. 208.I am driven to the conclusion that the plaintiff’s case on fraudulent misrepresentation is extremely contrived and incredible. Each of Madam Choi, Kan Hoi and Man Hing’s incredible account that they did not know and never asked about Ngok Chuen’s financial condition, whether generally or in 1993, in 1996 or thereafter, is a clear attempt to support the untrue case that Madam Choi was misled by Ngok Chuen about his financial circumstances and needs. 209.I have no hesitation in rejecting Madam Choi’s case on misrepresentation. L. Other issues 210.Given I have already found against the plaintiff on the issue of assignment on the facts and in law and on the issue of misrepresentation on the facts. It is unnecessary and I do not intend to deal with the Limitation Issue and the Gift Issue. M. Counterclaim 211.Ngok Chuen in his Defence and Counterclaim seeks a declaration that the defendant, and his lawful successors and assigns is solely and beneficially entitled to all income to be derived from the Property. 212.Madam Choi accepts that I have the jurisdiction to make such a declaration [plaintiff’s Closing Submissions §83(5)]. However, she submits it is not just or appropriate for this court to exercise its discretion, without having joined Ng Senior’s estate as a party to these proceedings, a direct counterparty to the alleged agreement to Ngok Chuen as regards the assignment (or agreement to assign) of the rental income of the Property in favour of Madam Choi for her lifetime. 213.I disagree with Madam Choi’s submissions. 214.First, it is apparent to me that all the crucial and related parties of the Assignment were present in these proceedings: Madam Choi, Kan Hoi, Man Hing and Ngok Chuen. It is unlikely that there is any other factual witness that can assist the Court in relation to what actually took place back in 1986. 215.Second, it seems to me that the so-called Ng Senior’s estate or its representatives are essentially Kan Hoi, Man Hing and Madam Choi. Given they are all along involved in these proceedings, and they had the liberty to join themselves to the action in their capacity as representative of the estate of Ng Senior, I do not find it unfair to any individual or the estate of Ng Senior to make the declaration sought. 216.Given that Madam Choi has failed her claim, I do not see any reason why I shall not make the declaration sought and I shall order accordingly. 217.She further argues that even though there may be tenancies in respect of the Granville Road Property which came into existence after October 1986 and which are not capable of being assigned by any equitable assignment by Ng Senior to Madam Choi, the court should refuse Ngok Chuen’s declaration. Madam Choi argues the reason is that there was an agreement between Ng Senior and Ngok Chuen, enforceable by the estate of Ng Senior, and supported by consideration, being the transfer of the Granville Road Property by Ng Senior to Ngok Chuen for free, giving rise to the Madam Choi’s life interest. 218.Since I have found against the condition of the transfer of the Property or the existence of an agreement between Ng Senior and Ngok Chuen in relation to the Madam Choi’s life interest, this point does not help Madam Choi either. Ngok Chuen is the legal and beneficial owner of the property and thus entitled to the rent derived thereof. N. Conclusion 219.The plaintiff’s claim is dismissed. I grant an order in terms of the declaration sought by Ngok Chuen. O. Costs 220.Costs should follow the event. The plaintiff shall pay the costs of and incidental of the proceedings to the defendant, with certificate for two counsel. 221.I express my gratitude to counsel for their most able assistance.
Mr Paul Shieh SC, leading Ms Sara Tong, instructed by William W L Fan & Co, for the plaintiff Mr Stewart Wong SC, leading Mr Jin Pao, instructed by P C Woo & Co, for the defendant (represented by S K Lam, Alfred Chan & Co from 20 July 2017 onwards) | ||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under HCA 1853/2014