Lau Cheung Chun and Another v. The Secretary for Justice

HCMP 311/2011

[2018] HKCFI 208

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 311 OF 2011

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J U D G M E N T

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INTRODUCTION

1.The issue to be determined in this action is whether Madam Dai Sau Ying (戴秀英), deceased (“the Deceased”) validly gifted to the 1^st and 2^nd Plaintiffs a real property and some shares in 3 public companies under the doctrine of donatio mortis causa.

BASIC FACTS

(i)      Family background

2.The late Mr Lau Sau Po, deceased (“Mr Lau”) and Madam Hsui Ying, deceased (“Madam Hsui) were married in about 1938.  They had two children, namely, (i) the 1^st Plaintiff, born in 1944, and (ii) the 2^nd Plaintiff, born in 1946.

3.Madam Hsui passed away in 1949. 

4.In or about November 1951, Mr Lau married the Deceased as his “tin-fong” wife by way of a Chinese customary marriage in Hong Kong, at a time when the Plaintiffs were still of tender age.  Thereafter, the Deceased took up the role as the Plaintiffs’ mother, brought them up and took care of them as her own children.  Reciprocally, the Plaintiffs treated and respected the Deceased as their mother.

5.Mr Lau and the Deceased did not have any children of their own.  Mr Lau passed away in 2003.

6.Until they respectively got married, the 1^st and 2^nd Plaintiffs had been living with Mr Lau and the Deceased under the same roof at 3/F, 35 Tang Lung Street, Hong King.

7.The 2^nd Plaintiff got married in 1967 and the 1^st Plaintiff got married in 1970.  After their respective marriages, they moved out of their parents’ home.  Nevertheless, the Deceased helped look after the 1^st Plaintiff’s two children (born in 1971 and 1976 respectively) and the 2^nd Plaintiff’s two children (born in 1968 and 1972 respectively) for a period of time up to about 1976, and treated them as her grandchildren.

8.In 1973, Mr Lau purchased a property known as Flat D, 19/F, No 63 Broadway, Mei Foo Sun Chuen, Kowloon (“the Property”) in the name of the Deceased.  The Property was initially let to a tenant for about 3 years after its acquisition, and thereafter became the matrimonial home of Mr Lau and the Deceased.

9.After the retirement of Mr Lau in the early 1990s (and possibly for a few years prior to his retirement) and up to his death in 2003, the 1^st and 2^nd Plaintiffs gave financial support to Mr Lai and the Deceased.  After the death of Mr Lau, the 1^st and 2^nd Plaintiffs continued to give financial support to the Deceased until her death in January 2008.  They also gave her pocket moneys during festivals and on her birthdays.

10.The Deceased passed away on 30 January 2008, at the age of 80.  The death of the Deceased was reported by the 1^st Plaintiff as her “son” to the Births and Deaths Registry.  The Plaintiffs also took care of the funeral and related religious services for the Deceased, and paid funeral expenses of about HK$80,000 therefor.

(ii)     The Gifts

11.On 7 January 2008, the Deceased was admitted to the Princess Margaret Hospital due to oedema with swelling of the feet.  She was diagnosed to be suffering from “excess of white blood cells” with symptoms of leukemia.  She stayed in the Princess Margaret Hospital until her death on 30 January 2008.

12.According to the 2^nd Plaintiff:-

(1)  The Deceased had a safe deposit box opened many years ago (about 10 to 20 years prior to her death) with what was then known as Po Sang Bank (now called Bank of China (Hong Kong)).  She accompanied the Deceased to the bank to open the safe deposit box, and was named as an authorized person who could gain access to the safe deposit box.  However, she never accessed the Deceased’s safe deposit box until 25 January 2008 in circumstances more particularly described below.

(2)  The Deceased was admitted to the Princess Margaret Hospital on 7 January 2008.  Initially, her condition was fair save that there was swelling of the feet.  Her conditions, however, deteriorated later.  By about 27 January 2008, she became unconscious.  Pausing here, I should mention that, according to the 1^st Plaintiff, although the Deceased’s mental state deteriorated as from about 27 January 2008, she was still conscious.  Anyhow, it seems to be clear that prior to 27 January 2008, the Deceased was conscious and mentally alert.

(3)  Prior to 24 January 2008, the Deceased had, on several occasions, mentioned to the 2^nd Plaintiff that she did not think she could survive her illness.  She told the 2^nd Plaintiff that her estate consisted of cash of around HK$70,000, some shares in a few public companies with a value of around HK$100,000, and the Property.  She further told the 2^nd Plaintiff that she wanted the Plaintiffs to have the shares and the Property in equal shares after her death, and to use the cash for her funeral.

(4)  On 24 January 2004, the Deceased instructed the 2^nd Plaintiff to go to her home at Mei Foo Sun Chuen to get the key to her safe deposit box from a drawer in her bedroom, and retrieve the share certificates of her shares and the title deeds and documents of the Property from the safe deposit box. The Deceased also told the 2^nd Plaintiff that she knew she would not live long, and the 1^st and 2^nd Plaintiffs could do whatever they wished with the Property and the shares, and if they should decide to sell them the proceeds of sale thereof should be divided equally between the two of them. 

(5)  In the morning of 25 January 2008, the 2^nd Plaintiff first went to the Deceased’s home at Mei Foo Sun Chuen to get the key to the safe deposit box.  After that, she went to Bank of China (Hong Kong), at Wing On House, 71 Des Voeux Road Central, Hong Kong, and retrieved from the safe deposit box:-

(a)   the share certificates (“the Share Certificates”) in respect of (i) 2,000 ordinary shares in CLP Holdings Limited, (ii) 1,500 ordinary shares in BoC Hong Kong (Holdings) Ltd, and (iii) 627 ordinary shares in MTR Corporation Limited (hereinafter collectively referred to as “the Shares”); and

(b)  the title deeds and documents of the Property (“the Title Deeds”).

(6)  Afterwards, the 2^nd Plaintiff told the Deceased that she had taken possession of the Share Certificates and Title Deeds.  The Deceased repeated her wish to give the Shares and the Property to the 1^st and 2^nd Plaintiffs, and told her that if they should decide to sell the Shares and the Property the proceeds of sale thereof should be divided equally between the two of them.

(7)  On 30 January 2008, the Deceased died intestate, without leaving any blood relatives.

13.The 2^nd Plaintiff has kept the Share Certificates and Title Deeds in her possession since 25 January 2008.  The 2^nd Plaintiff initially kept them at her home.  On 30 January 2008, after the death of the Deceased, the 2^nd Plaintiff put them in a safe deposit box held in the joint names of her husband and herself with Bank of Communications Co Ltd.

14.Apart from the 2^nd Plaintiff, the court has also received the evidence of (i) the 1^st Plaintiff, (ii) Mr Chung Chun Ying (the 2^nd Plaintiff’s husband), and (iii) Madam Lau Fung Kwan (the Plaintiffs’ cousin).  Their evidence is largely consistent with that given by the 2^nd Plaintiff.  In addition:-

(1)  The 1^st Plaintiff gave evidence that prior to 27 January 2008, the Deceased told him, once or twice, while she was in hospital that if she should die, her properties should be divided equally between the 1^st and 2^nd Plaintiffs.

(2)  Madam Lau Fung Kwan gave evidence that she visited the Deceased at the Princess Margaret Hospital 3 times during her hospitalization.  On the first occasion, the Deceased appeared not to be too negative about her prognosis and told Madam Lau Fung Kwan that she should be able to leave the hospital and go home.  However, on the second occasion, on or about 15 or 16 January 2008, Madam Lau Fung Kwan could sense some change in the Deceased’s attitude for the worse.  The Deceased told Madam Lau Fung Kwan that she had made arrangements for everything, which Madam Lau Fung Kwan understood her to mean her affairs after her death.  The Deceased also told Madam Lau Fung Kwan (inter alia) that she wanted to leave whatever she had to the Plaintiffs in equal shares after her death.

15.By this action, the Plaintiffs seek a declaration that (inter alia) the legal and beneficial title of the Property and the Shares has been validity transferred to them under the doctrine of donatio mortis causa.

16.Pursuant to the order of Master Chow dated 5 May 2017, the Secretary for Justice was substituted for the personal representative of the Estate of the Deceased as the Defendant in this action. The Secretary of Justice has an interest in this matter because, if the Plaintiffs’ claim in respect of the Property and the Shares should fail, they would become Government properties under the doctrine of bona vacantia (see Re Estate of Lung Nga Lai Eilly [2014] 4 HKLRD 829; Re Estate of Chen Soo King [2011] 5 HKLRD 402).

17.Nevertheless, as made clear by Mr Lewis Law on her behalf, the Secretary for Justice does not have a positive case to advance in this action, but would assist the court to come to a correct conclusion on whether the Plaintiffs’ claim in respect of the Shares and the Property based on the doctrine of donatio mortis causa has been properly made out on the facts of this case.

DISCUSSION

18.The Plaintiffs and their witnesses were cross-examined by Mr Law.  Although there are some minor inconsistencies in their evidence, Mr Law accepts, fairly, that they are not such as would cast doubts on their credibility generally.  The Plaintiffs’ basic case that the Deceased intended to give her assets to them in equal shares after her death is, I consider, inherently probable in the light of her family background and the circumstances in which the Deceased found herself shortly before her death.  The evidence of the Plaintiffs and their witnesses is not contradicted by any contemporaneous documents.  I am satisfied that they all tried their best to give evidence honestly and, by and large, I accept their evidence as summarized above.

19.The legal requirements for a valid donatio mortis causa are well established, namely, that:-

(1)  the donor must have made the gift in contemplation though not necessarily in expectation of death;

(2)  the donor must have delivered to the donee the subject-matter (in the case of a chose in possession) or the indicia of title (in the case of a chose in action) of the gift, or transferred to him the means of getting at that subject-matter or indicia of title, e.g. delivering a car key, or a key to a box containing the indicia of title, intending to part with dominion over the gift; and

(3)  the gift must be such as to be absolute and complete only on the donor’s death so that it is revocable before then.  A condition to this effect need not be expressed and will normally be implied from the fact that the gift was made when the donor was seriously ill.

See Re Estate of Lung Nga Lai Eilly, ante, at paragraph 7 per Yuen JA, giving the judgment of the Court of Appeal and endorsing the principles stated by Deputy High Court Judge Lisa Wong SC at paragraph 29 of her judgment at first instance [2011] 5 HKLRD 402.

20.Real properties and choses in action (including shares in a company) can form the subject matter of a donatio mortis causa: see Re Estate of Lung Nga Lai Eilly, ante, at paragraph 11 (land); Sen v Headley [1991] Ch 425, at 439B-441C (land); Vallee v Birchwood [2014] 2 WLR 543, at paragraphs 31-37 (land); Re Estate Chen Soo King, ante, at paragraphs 30 and 38-40 (shares).

21.On the evidence before me, I consider that:-

(1)  the first and third requirements are satisfied having regard to what the Deceased said to the 1^st Plaintiff, 2^nd Plaintiff and Madam Lau Fung Kwan while she was in hospital in January 2008, namely, that she wished her properties to go to the 1^st and 2^nd Plaintiffs in equal shares after her death, and the closeness of time between those statements and the date of the Deceased’s death; and

(2)  the second requirement is satisfied by the Deceased instructing the 2^nd Plaintiff to take possession of the key to the safe deposit box and to retrieve the Share Certificates and the Title Deeds from the safe deposit box.

DISPOSITION

22.For the foregoing reasons, I am satisfied that the Deceased made valid donationes mortis causa in respect of the Shares and the Property to the 1^st and 2^nd Plaintiffs. Accordingly, I make a declaration in terms of paragraph 1 of the Amended Originating Summons herein in respect of items a, b, c and d under that paragraph.  The parties are agreed that, in such circumstances, there should be no order as to costs, and I so order.

23.Lastly, it remains for me to thank counsel for their assistance rendered to the court.

Mr Lee Tung Ming, instructed by Marie Tsang, Dustin Chan & Co, for the 1^st and 2^nd Plaintiffs

Mr Lewis Law, instructed by Department of Justice, for the Defendant