Soshila Keswani v. Motiram Keswani

DCCJ 579/2013

[2019] HKDC 135

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 579 OF 2013

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JUDGMENT

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Background

1.This is a case of dispute between two siblings, both senior citizens[1], over certain rental income of property inherited from their parents.  The plaintiff being the youngest sister claims against the defendant being the eldest brother for rental income of HK$599,820 plus her 20% share of the rental income generated from 2001 to 2006 and from 2016 to 2017[2].  On the other hand, the defendant contested the claim and at the same time, by way of a counterclaim, seeks a declaration that the Deed of Family Arrangement and the Vesting Assignment as between the plaintiff and the defendant are rescinded or alternatively void[3].

2.There are 5 siblings in the family of the plaintiff and the defendant (“Family”): the eldest brother being the plaintiff, the 2^nd to the 4^th brothers being Hira, Viroo and Ramchand respectively, and the 5^th and the youngest sister being the plaintiff (“5 Siblings”).

3.The father of the Family, Ratanchand Keswani, (the “Father”) owned a building at No 50C Wing Hong Street, Kowloon (the “Property”), which consisted of the ground floor (“G/F”) and the 1^st to the 5^th floors (the “1-5/F”).

4.The Father passed away on 4 July 1961.  Pursuant to his will dated 17 November 1960[4], the G/F was given to the plaintiff whereas the 1-5/F to Wong Sui Yeung, mother of the Family (the “Mother”).  It was stated in the Father’s will that “the property, or any portions of the property, must NOT be sold or mortgage[d] to anyone in any way[s], but could be transferred to their children on the same conditions” (“Restriction”)[5].

5.The Mother passed away on 23 May 2001.  Under her last will dated 27 September 1991[6], the defendant was appointed as the sole executor and trustee, and that all the Mother’s real and personal property, i.e. including 1-5/F, be given to the defendant and the 3 brothers in equal shares. 

6.In summary, pursuant to, first, the Father’s will and subsequently, the Mother’s will, the 1-5/F were passed to the four sons of the Family, including the defendant, and the G/F was passed to the plaintiff.

7.In 2002, the 5 Siblings executed a Deed of Family Arrangement dated 13 June 2002 (“Deed”)[7] prepared by and in the presence of a solicitor, Chu Sau Fong Juliana (“Chu”)[8] of Messrs Ho and Wong, solicitors (“Ho and Wong”).  The Deed provided that the defendant, as the executor of the Mother’s will, should upon the grant of probate assign the 1-5/F to the 5 Siblings, i.e. including the plaintiff, in equal shares[9].  In the recitals of the Deed, it was provided that:-

(a)   (3) Doubt occurred as to whether the last Will of the Deceased Mother is in breach of the condition aforesaid as contained in the last Will of the Deceased Father[10] and repeated in the Assignment since the class of children of the Deceased Mother should include all of the 1^st, 2^nd, 3^rd, 4^th and 5^th Beneficiaries[11] (“Recital (3)”);

(b)   (6) For the purposes of avoiding any title defects which may arise out of the different ways of interpretation of the condition contained in the Assignment which might be contradictory to the gift contained in the Will of the Deceased Mother, and in consideration of their natural love and affection for each other, the parties hereto have agreed to distribute the Property in manner hereinafter contained (“Recital (6)”).

8.To carry out the arrangement of the Deed, the 5 Siblings subsequently executed a vesting assignment dated 3 September 2002 (the “Assignment”)[12], also prepared by and in the presence of Chu. 

9.The plaintiff commenced these proceedings by a writ dated and filed on 15 February 2013[13], claiming against the defendant for all the rentals she was entitled to, i.e. 1/5 of the total rentals received by the defendant in respect of 1-5/F, from 2001 to now.  The defendant contested the plaintiff’s claim on the basis that both the Deed and the Assignment are voidable or void and, by way of a counterclaim, seeks a declaration to that effect.

The plaintiff’s case

10.The plaintiff’s case is straightforward.  Both the Deed and the Assignment are valid legal documents and should be given full effect to.  Therefore, she should be entitled to 1/5 of the rental income of the 1-5/F over the years. 

11.She filed a witness’s statements[14] which was adopted by her in court and she also testified at the trial.

12.As to the background or the circumstances leading to the execution of the Deed and the Assignment, it is the plaintiff’s case that:-

(a)   On 4 June 2001, after the Mother’s funeral, the 5 Siblings and others had a lunch meeting, during which, a nephew Hiro Keswani[15] (“Defence Witness”) suggested a lawyer’s friend called William Ho of Ho and Wong to assist with the disposal of the Mother’s estate.  The 2^nd brother, Hira, suggested the plaintiff to be the administrator of the Mother’s estate and all other brothers agreed.

(b)   In September or October 2001, the Defence Witness took the plaintiff to the office of Ho and Wong and introduced William Ho who in turn introduced Chu to the plaintiff to handle the application for letter of administration in respect of the Mother’s estate.

(c)   In October 2001, the Defence Witness called and told the plaintiff to go to Chu’s office to sign the papers for the letter of administration and the plaintiff did on 22 October 2001.

(d)   In early 2002, the Defence Witness told the plaintiff that there was a will of the Mother with the defendant, which assigned the 1-5/F to the 4 sons of the Family only.

(e)   The plaintiff’s 3 brothers, excluding the defendant, decided to divide the Mother’s assets into 5 equal shares, i.e. to include the plaintiff as well.

(f)   In May/June 2002 and August/September 2002 respectively, the plaintiff was told by the Defence Witness to go to Chu’s office to execute the Deed and the Assignment.  The plaintiff did and she was the last one to sign.

(g)   The plaintiff was not the one who instructed Chu to prepare the Deed and the Assignment.  She did not pay for the lawyer’s fees.

(h)   At a later stage, the defendant asked the plaintiff to find out the procedure to “delete” the Restriction.  Before she finally sought to obtain a legal advice from Messrs Pansy, Leung, Tang and Chua solicitors, she asked and the defendant signed on a fax covering letter on 23 July 2007 to confirm to proceed (“Confirmation Note”)[16].  The plaintiff argued that the defendant had at all the times recognised her as one of the beneficiaries of the 1-5/F.

The defendant’s case

13.The defence case, in summary, is that:-

(a)   the Deed and the Assignment are voidable on the ground of misrepresentation by Chu who, being an agent of the plaintiff at the material time, falsely represented to the defendant that those documents were formal documents for the purpose of application for probate of the Mother’s will and would not affect his rights;

(b)   the Deed and the Assignment are void on the ground of non est factum in that the defendant was under the mistaken belief that those documents were formal documents for the purpose of application for probate of the Mother’s will and would not affect his rights; and

(c)   alternatively, the Deed is void on the ground of common mistake of the 5 Siblings as they signed the document on the basis that there was doubt as to whether the Mother’s will violated the Restriction when there was in fact no such doubt as the Restriction was plainly void or if it was not, the Mother’s Will did not violate it; if the Deed is void, it follows that the Assignment is also void as the 5 Siblings signed the latter on the basis that the former was valid when it was in fact void.

14.The defence also argue that, in the event that the Deed and the Assignment are valid and that the plaintiff is entitled to any rental income, the portion accrued before 15 February 2007 is not recoverable as it is barred by s. 18 of the Limitation Ordinance, Cap. 347, which provides that “no action shall be brought, or distress made to recover arrears of rent, or damages thereof, after the expiration of 6 years from the date on which the arrears became due”.  The plaintiff issued the writ on 15 February 2013.  As to quantum, it is also argued that there is no evidence to prove any rental income having been generated in respect of 1-5/F in the years of 2001/2002 and 2003 to 2007.

15.The defendant filed a witness statement[17] which was adopted as evidence in addition to his testimony in court.  The nephew of the plaintiff and the defendant, Hiro Keswani, the Defence Witness, also filed a witness statement[18], which was adopted as evidence, and he testified in court for the defence.  

16.As to the background or the circumstances leading to the execution of the Deed and the Assignment, it is the defence’s case that:-

(a)   The Defence Witness never introduced Ho and Wong to the plaintiff as the latter was a close friend of the wife of the founder (Mr Ho Sun Kuen) of that firm and had known that firm for years.  The plaintiff did not need any introduction from the Defence Witness. 

(b)   After the Mother’s death and pursuant to her will, the defendant would be the sole executor of her estate.  The defendant therefore asked the Defence Witness to recommend a lawyer to assist with the application for the grant of probate. 

(c)   Without knowing that the plaintiff had already retained Ho and Wong to apply for letter of administration in respect of the Mother’s estate, the Defence Witness suggested the same firm, i.e. Ho and Wong, to the defendant because one of its partners, William Ho, was the Defence Witness’s university classmate.

(d)   Also not knowing that the plaintiff had already retained Ho and Wong to apply for letter of administration in respect of the Mother’s estate, the defendant followed the Defence Witness’s suggestion to instruct Ho and Wong to handle the application for grant of probate of the Mother’s will.  The handling partner was William Ho who was assisted by a solicitor Chu.

(e)   On 2 separate occasions in June and September 2002, the Defence Witness on each occasion received a call from Chu asking him to contact his father (i.e. Viroo) and uncles (including the defendant) to go to her office to sign certain documents.  The Defence Witness then called his father and the uncles.  On each occasion, the defence witness separately took his father and the defendant to go to the office of Ho and Wong and sign the document.  Both the Defence Witness’s father and the defendant signed the documents. 

(f)   On all those occasions, Chu did not explain in detail the nature and the contents of those documents.  She simply asked the Defence Witness’s father and the defendant to sign.  Both the defendant and the Defence Witness were under the belief that the documents were routine and standard documents for the probate and were not aware of the genuine nature of the Deed and the Assignment.  The defendant, who trusted the Defence Witness and expected him to inform him if any of the documents were prejudicial to his rights, simply signed without reading the documents.

(g)   The defendant said he would not have signed the Deed and the Assignment if he knew the nature and the terms of them.  Both the defendant and the Defence Witness claimed that they only started to realise the genuine nature of the Deed and the Assignment, and how the defendant’s rights were affected, at the commencement of this action by the plaintiff and after explanation by their solicitors.

(h)   Both the defendant and the Defence Witness denied having instructed Chu or Ho and Wong to prepare the Deed and the Assignment.  Both took the view that it was the plaintiff who gave such instructions as she was the only one to have motive to do so.

(i)   The defendant also challenged the general credibility of the plaintiff, by referring to two previous sets of court proceedings where the plaintiff was a party.  One was between Hira (the 2^nd brother) and the defendant[19] and the other was between the defendant and her divorced husband[20].  The defendant accused the plaintiff that she would be prepared to lie in court, as she did in those previous proceedings, when she felt it would suit her.

The key issue

17.Apparently, the key issue of this case is the validity or otherwise of the Deed and the Assignment.  To be more specific, if those documents are valid and should be given effect to, as contended by the plaintiff, the plaintiff would succeed in her claim and should be entitled to 1/5 of the rental income of 1-5/F over the relevant years.  If, on the contrary, those documents are void on the grounds of misrepresentation and/or non est factum and/or common mistake, as contended by the defendant, the plaintiff’s claim would fail and the defendant should succeed in his counterclaim for a declaration to that effect.

18.To decide on that key issue, first of all, I have to consider and resolve 2 matters of dispute, namely (a) the credibility of the plaintiff and the defendant as well as the Defence Witness, and (b) the role and the conduct of Chu in this case.

Analysis

19.Both parties attack the credibility of the opponent and accused the opponent of lying on various matters.

Credibility of the plaintiff

20.I first deal with the credibility of the plaintiff and consider the following matters.

21.In an unrelated case, HCA No 918 of 1991, the plaintiff’s 2^nd eldest brother, Hira, commenced legal action on 2 February 1991 to sue the plaintiff for recovery of a debt in the total sum of $1,582,615 with interest and costs, part of the debt arose from a total sum of $700,000 advanced to the plaintiff in 1987 for the purchase of a flat in Middle Road[21]. The plaintiff in her defence dated 8 March 1991 denied having received any advancement and in particular, averred that the flat was purchased by her “using her own money”[22].

22.However, 20 years later in 2011, in the matrimonial action FCMC 9789 of 1996 where the plaintiff sought leave to apply for ancillary relief against her divorced husband, the plaintiff in her affirmation dated 27 April 2011, affirmed that the said flat was “largely paid by my late brother Dr Hira Keswani”[23]. The plaintiff was cross-examined on this during the trial.  She said Hira gave her the deposit for the said flat and she paid for the mortgage instalments. She denied lying.  Nevertheless, the discrepancies between these versions remain obvious and the explanation offered by the plaintiff is unreasonable.

23.Also in an unrelated case, in the said matrimonial action FCMC 9789 of 1996 where the plaintiff sought leave to apply for ancillary relief against her divorced husband in 2011, the plaintiff in her affirmation stated that when she filled in the Acknowledgement of Service (Form 4) back on 21 November 1996, she put down a handwritten word “Yes” next to the question 8(e) for secured periodical payments[24] and the plaintiff had that extract copy of the Form 4 exhibited to her affirmation[25]. 

24.Nevertheless, it was found out in the copy of the said Form 4 which was originally sent by the Family Court to the plaintiff’s divorced husband that there was no such handwritten word “Yes” next to that question 8(e)[26].

25.The plaintiff was cross-examined on this during the trial.  It was suggested to the plaintiff that the handwritten word “Yes” for secured periodical payments was not put on the original court document back in 1996 but was only subsequently put on the copy exhibited to her affirmation to assist her application in 2011.  The plaintiff denied all those allegations and said that the matter had been clarified by the judge in court and the CID of the police[27].

26.There is no evidence as to what investigation, if any, had been done and how the matter was eventually resolved previously. In any event, I find the matter at least suspicious on paper in three aspects.

27.First, in the copy Form 4 where a handwritten “Yes” was there, next to it was the plaintiff’s signature/initial and a handwritten date “11-12-96”[28] which was different from the date of the document which was “21^st Nov 96”[29].  The plaintiff’s explanations in court that she actually wanted to put down “21-11-96” (implying that she made a mistake), the document was filed by lawyer etc. are unreasonable and I found them hard to believe. 

28.Second, if that handwritten word “Yes” was written in the original document filed in court (but not subsequently added on) as the plaintiff claimed, I found it strange to have the plaintiff’s signature/initial next to it but not to any other hand-written words (”Yes” , “No” and others) in the document[30]. It is a matter of common sense that ordinary people would sign or initial their amendments/corrections on a document. 

29.Third, I noted that particular paragraph 8, just like the next paragraph 9, had been “crossed out”, and that there was nothing claimed for any items under paragraph 9[31]. If the plaintiff had in fact put down a handwritten word “Yes” next to paragraph 8(e) indicating her wish to be heard on secured periodical payments when the document was originally filed in court in 1996, it would be strange for her to have crossed out the whole paragraph (paragraph 8) at that time which, for ordinary people, would mean that the whole paragraph was inapplicable or irrelevant.

30.There was another matter arising during the trial.  During cross-examination, the plaintiff agreed that she obtained a stock broker’s licence in around September 1980 and started a stock broker business both supported by her brother Hira.  The plaintiff agreed that Hira helped her with the licence and the business by paying her $300,000. 

31.That was however in stark contrast to her version in her defence to Hira’s action in 1991 for recovery of money including that for a stock broker’s licence and starting a business.  The plaintiff in the Defence of that action averred in clear and unequivocal terms that she had never received any advancement as claimed by Hira[32].  The plaintiff denied having lied and tried to explain in this trial that her brother Hira had always given her money without specifying for what.  If that is the case, it would be strange for Hira to commence legal proceedings against her in the first place. The plaintiff during re-examination raised that topic again by herself and claimed that Hira just filed that case to court to stop her from gambling in stock and securities and the case was not proceeded with.  All these explanations of the plaintiff do not sound credible at all.

32.The plaintiff’s case was that, during the lunch meeting after the Mother’s funeral on 4 June 2001, it was the Defence Witness to recommend Ho and Wong to handle the Mother’s estate.  The plaintiff did not instruct Ho and Wong.  The Defence Witness denied.

33.During cross-examination, the plaintiff at one stage said that she did not know anyone in Ho and Wong except Chu, at another stage, she agreed that she had known the founder of Ho and Wong (Mr Ho Sun Kuen) and his wife for over 40 years and had been a close friend of Mrs Ho. Her explanation under cross-examination that she only knew Mr and Mrs Ho as personal friends but never knew they had a business firm of lawyers is unreasonable and unbelievable. 

34.Further, it was stated unequivocally in the plaintiff’s witness statement, which had been adopted by her as evidence, that she “do not know “HO & WONG” firm and that I have my own lawyer’s executive clerk Mr Charles K. P. Yeung, (now with Katherine Y. W. Or & Co.[33]) whom that I have known and had been taken care of my account since the 1980’s”[34].  This is inconsistent or at least not supported by other evidence or documents disclosed in this case.  When the plaintiff was defending the said action HCA 918 of 1991 brought by her brother Hira, she instructed Messrs. Hobson & Co.[35].  When the plaintiff was seeking legal advice on the Deed and the Assignment, she instructed Messrs. Pansy Leung Tang & Chua[36].

35.There is also the Confirmation Note[37] which the plaintiff heavily relied on.  It was originally a fax letter dated 5 January 2006 of Messrs Pansy Leung Tang & Chua where there was a quotation of fees for preparing certain legal documents.  It is the plaintiff’s case that those documents were for lifting the Restriction in the Property[38]. 

36.On that typewritten fax letter dated 5 January 2006, there were certain handwritten words at the bottom, i.e. “Confirmed to proceed the above:-”, a signature, and then “Motiram Keswani” “23-7-2007”.  The plaintiff said that it was the defendant who wanted to sell the Property and asked her to obtain legal advice in 2005 to 2007 for removing the Restriction in the Property.  The plaintiff said she did accordingly and first obtained an advice form Messrs. S. W. Wong & Associates[39]  in 2005 and then this one from Messrs. Pansy Leung Tang & Chua in 2006.  The plaintiff then asked the defendant to sign on that Confirmation Note to confirm and that document, the plaintiff claimed, proved that the defendant “all the time had recognised me [i.e. the plaintiff] as one of the beneficiaries”[40]. 

37.The defendant, during cross-examination by the plaintiff, said that, first, he never wanted to sell the Property nor did he ask the plaintiff to help removing the Restriction and second, he never saw that Confirmation Note before and did not write those words on it.  The defendant, however, said that it was his signature on the Confirmation Note but he repeatedly said he had no idea as to why it was there.  He also said if he did sign, there was no need to put down his name as well. 

38.Obviously there are two completely different versions between the plaintiff and the defendant as to how this Confirmation Note came into existence.  I have carefully considered the matter and am prepared to accept the defendant’s version and reject the plaintiff’s, for two reasons. 

39.First, the defendant was honest enough to accept that it was his signature on the Confirmation Note (though he categorically denied having seen the Confirmation Note before or having given any instructions to the plaintiff).  It would have been much easier for him to deny everything about that Confirmation Note but he did not.

40.Second, which is a matter of inference and I place more weight on it.  It is unreasonable in the circumstances of this case for the defendant to instruct the plaintiff to seek legal advice on how to remove the Restriction on the Property in the first place.  The defendant gave unequivocal evidence that he never wanted to remove the Restriction or to sell the Property.  Even if he wanted to seek legal advice on that matter, it would have been most unlikely for him to seek assistance from the plaintiff.  It is clear on evidence that the parties were all along on very bad terms.  The defendant said he never talked to the plaintiff, he would not answer her phone calls and would throw her letters into rubbish bin if she wrote any. Similarly, it was also the plaintiff’s evidence that she had not communicated with the defendant ever since she had taken back the G/F in August 1991[41].  If the defendant did want to seek legal advice in 2005 to 2007, it would be more likely for him to seek assistance from the Defence Witness, as he did in 2001 when he asked the Defence Witness for recommendation of a lawyer to handle the Mothers’ estate.

41.Having carefully considered all the above, and taken into account the plaintiff’s demeanour when giving evidence, I do not find her an honest and credible witness. 

Credibility of the defendant and the Defence Witness

42.I now proceed to consider the credibility of the defendant and the Defence Witness.

43.As a preliminary observation, the evidence of the defendant and the Defence Witness is on the whole consistent and their respective evidence lends support to each other.  Their evidence in court was clear, straightforward and unshaken during cross-examination.

44.I noted and carefully considered the plaintiff’s criticism that the defendant and the Defence Witness were unable to recollect various matters and were lying in their evidence.  I do not find the fact that they failed to recollect certain matters affect their general credibility and, on the contrary, find it quite reasonable in the circumstances of the case. 

45.First, the various matters raised by the plaintiff took place many years ago, for instance, the lunch meeting after the Mother’s funeral as early as on 4 June 2001, the signing of the Deed and the Assignment in 2002, etc. 

46.Second, the defendant was about 72 or 73 years old in 2001/2002 and about 88 years old when giving evidence in this trial.  It is understandable for persons of that senior age to be relatively forgetful. 

47.Third, and more importantly, the version of the defendant and the Defence Witness in general is simple and uneventful.  The defence version, put it simply, is: (a) there were no discussions over the Mother’s estate in that lunch meeting after the funeral[42] in 2001, (b) the defendant accompanied by the Defence Witness simply went over to Chu’s office to execute the Deed and the Assignment in 2002 believing that they were just routine documents for the probate of the Mother’s will, and (c) there were no discussions or arguments between the parties afterwards about the Property or any other matters at all prior to the commencement of these proceedings by the plaintiff in 2013.  As such, there is no reason for them to pay any particular attention to, and then to remember specifically afterwards, for instance, the circumstances under which that lunch meeting was held in 2001, the execution of the Deed and the Assignment in 2002, etc.

48.I find both the defendant and the Defence Witness honest witnesses and am prepared to accept their evidence.  I would therefore reject the plaintiff’s evidence if in any way contradicted by or being inconsistent with that of the defendant and the Defence Witness. 

49.I move on to consider the role and the conduct of Chu with respect to the preparation and execution of the Deed and the Assignment.

50.Chu was never a witness and there was no evidence whatsoever from her in this case.  It is common ground that Chu was responsible for the preparation of the Deed and the Assignment and witnessing the execution of those documents.  What are in dispute are, (a) on whose instruction she was to prepare those documents and (b) whether she had made any misrepresentation to the defendant as to the nature of those documents. 

Role of Chu – was she acting on instructions of plaintiff or defendant?

51.As a background, there were initially two related applications by the plaintiff on the first day of the trial for a writ of subpoena and leave to include Chu as a new witness of the trial, though no witness statement had ever been obtained from her.  After submissions by the parties, on the second day of the trial, the plaintiff withdrew both applications and the defendant asked for costs which were granted[43].  During submissions, the plaintiff claimed that she was “misguided” that Chu would either be called by the court or by the defendant.  It was however disclosed in the documents that, in none of the defence pleadings, questionnaires or any other documents filed in court, that the defence had ever indicated calling Chu as a witness. On the other hand, there was an unsuccessful attempt at the interlocutory stage by the plaintiff to adduce 7 witness statements[44], but she had never included Chu as a witness.  In none of the case management conferences did the plaintiff raise any issue as to whether Chu would be called, when she was all along fully aware that only herself, the defendant and the Defence Witness would be the witnesses for the trial.  I do not lose sight of the fact that the plaintiff had never attempted to obtain any witness statement from Chu.  I also bear in mind the defence submission that there is no reason for the defence to call Chu as a witness in view of all the defence allegations against her.

52.Both the plaintiff and the defendant denied having instructed Chu to prepare the Deed and the Assignment.  It is the plaintiff’s case that she was initially recommended by the Defence Witness to go to Chu for the application of the letter of administration of the Mother’s estate and subsequently, after the discovery of the Mother’s will, she was told by the Defence Witness to go to Chu’s office to execute the Deed and the Assignment.  On the other hand, the defence case is that the defendant, on the Defence Witness’s recommendation, instructed Ho and Wong to apply for the probate of the Mother’s will and therefore, when he executed the Deed and the Assignment prepared by Chu, he believed, so as the Defence Witness, that they were routine documents for the probate. 

53.In the absence of any evidence of Chu and, in view of the irreconcilable conflict between the parties, I have carefully considered the inherent probabilities and improbabilities of this matter of dispute. 

54.First of all, I noted that, even on the plaintiff’s version, she never said that the defendant was agreeable to dividing the Mother’s estate (i.e. including 1-5/F) into 5 shares to include her.  It was, according to the plaintiff, the idea of the other 3 brothers. The plaintiff in her witness statement, stated that “My 3 brothers, Hira, Viroo and Ramchand after knowing that there was a mother’s Will with Motiram [the defendant] without me in it, and they after looking into the whole matter had decided to divide the mother’s asset into 5 equal shares and to include me into it as well.”[45] As such, it would be strange for the defendant to instruct Chu to prepare the Deed and the Assignment in the first place when the whole purpose of which was to re-divide the 1-5/F to include the plaintiff.

55.Second, there is no evidence that any of the other brothers had instructed Chu to prepare the Deed and the Assignment.  It is also unlikely that the other brothers would do so.  It appears that the plaintiff was not on good terms with them.  The 2^nd brother, Hira, sued her as early as in 1996 for recovery of money advanced to her.  The plaintiff never mentioned any dealings with the 3^rd brother, Viroo, in her evidence except that she said the Defence Witness (Viroo’s son) had “close connections” with her[46] (but now has become the Defence Witness in this trial).  The plaintiff also said in her witness statement that she had not communicated with the 4^th brother, Ramchand, for over 30 years[47].  It is also unlikely that the Defence Witness would instruct Chu to prepare the Deed and the Assignment.  Not only did the Defence Witness clearly deny that, but he also had no reason to do so as he had no interest at all in the 1-5/F.  Theoretically, the Defence Witness’s interest would be prejudiced if those documents are signed and his father’s share is reduced as a result.

56.Third, as submitted by the defence, quite obviously, the plaintiff was the only one to benefit from the Deed and the Assignment which re-divide the 1-5/F to include the plaintiff who was not originally included in the Mother’s will.  By execution of the Deed and the Assignment, all other brothers, including the defendant, would inevitably suffer a loss as their respective shares of the 1-5/F would be reduced.  As such, the defendant contended that the plaintiff was the only person to have the motivation to instruct Chu to prepare the Deed and the Assignment.  There is force in this argument.

57.Fourth, it is common ground that, prior to the Mother’s death and the grant of probate of her will in 2002, the plaintiff has already inherited the G/F of the Property in 1961 pursuant to the Father’s will in 1960[48]. If the brothers agreed to re-divide the 1-5/F to include the plaintiff as well, it would mean that the plaintiff would have the biggest share of the Property among the 5 Siblings.  It is worth mentioning that, in fact, subsequent to the Father’s will in 1960, the Father made another will in 1961 deciding not to give the G/F to the plaintiff but to give the whole Property, i.e. G/F and 1-5/F to the Mother alone.  That Father’s will in 1961 was void because it was only witnessed by one witness.  That nevertheless showed the last testamentary intention of the Father[49]. The defendant and the other brothers must know that and it is unlikely that they would be prepared to give the biggest share of the Property to the plaintiff.

58.Finally, the defence, by relying on certain authorities[50], invited me to draw an adverse inference against the plaintiff for not calling Chu as a witness and failing to provide any satisfactory explanation.  That certainly adds force to the argument or lends support to the inference that Chu was in fact acting on the plaintiff’s instructions for preparation of the Deed and the Assignment.

59.Having considered all the above, I find, on the balance of probabilities, that the Deed and the Assignment were prepared by Chu on the instructions of the plaintiff.  As I have already found Defence Witness an honest witness and his evidence credible, I find, as a matter of fact, that the plaintiff was not recommended by the Defence Witness to go to Ho and Wong to instruct Chu but she did all those on her own.

Conduct of Chu – any misrepresentation by her to defendant?

60.I now proceed to consider the conduct of Chu at the time of execution of the Deed and the Assignment.

61.As said, there is no evidence whatsoever from Chu.  The plaintiff did not and could not give any evidence on the circumstances under which the defendant executed the Deed and the Assignment as she was not present.  The only evidence comes from the defendant himself and, to a certain extent, supported by the Defence Witness.

62.In the defence pleadings, the defence averred that Chu “had represented to the Defendant” that the Deed and the Assignment were “formal documents for the purpose of the application for probate for the Mother’s estate, and would not affect or prejudice the defendant’s rights personally”[51]. As such, the defence case was one of positive misrepresentation by Chu to the defendant.  It was never one of implied misrepresentation or misrepresentation by conduct.

63.This is however at variance with the evidence of the defendant and the Defence Witness.  It is the defendant’s clear evidence that Chu “did not explain in detail[s] the nature and contents of the document[s] [referring to the Deed] and simply told me to sign”, “she did not explain the contents of the Vesting Assignment and simply asked me to sign”[52].  The defendant never alleged Chu of making any misrepresentation to him to the effect that those documents were for the probate of the Mother’s will; it was the defendant’s “understanding” and “impression” that the documents were “routine documents for the Mother’s Probate”, “standard and routine for the Probate and would not affect my rights” [53]. Similarly, the Defence Witness never alleged Chu of making any misrepresentation to the defendant or his father.  He said that Chu simply called and told him that the documents were ready for signature by his father and uncles, that he was also under the belief that “the documents were standard and routine for the Probate and would not affect their rights”, and that Chu “did not explain in detail[s] the nature and contents of the documents, and simply told my father and Motiram [the defendant] to sign the documents”[54].  

64.As such, there is no or insufficient evidence from the defendant or the Defence Witness on the alleged misrepresentation and that I am not satisfied that Chu had made any misrepresentation to the defendant that the Deed and the Assignment were formal documents for the purpose of the application for the probate of the Mother’s estate. Nevertheless, I am prepared to accept the defendant’s evidence, which was supported by the Defence Witness, that Chu did not explain in detail the nature and the contents of those documents but simply asked the defendant to sign.

Consideration of the defences

65.The first defence, in short, is that the defendant was induced by Chu’s misrepresentation to execute the Deed and the Assignment and as a result, he should be entitled to rescind the documents.  As I am not satisfied on the evidence that Chu had made the alleged misrepresentation, this defence fails.

66.The second defence is one of non est factum, namely the defendant was under the mistaken belief that the Deed and the Assignment were formal documents for the purpose of application for probate of the Mother’s will and would not affect his rights.

67.The legal principle is that, if a party “has been misled into executing a deed or signing a document essentially different from that which he intended to execute or sign, he can plead non est factum in an action against him, the deed or writing is completely void in whosesoever hands it may come”: See Chitty on Contracts Volume I, 32^nd Edition, at para. 3-049, p. 366.

68.It is also summarised in Burrows: Restatement of the English Law of Contract (2016), at p. 176 that, “A signed contract is void under the doctrine of non est factum if (a) the document signed was mistakenly signed by the party who is alleging that it is void; (b) that document is fundamentally different from what that party thought it to be; and (c) that party was not negligent in signing that document.”

69.In the leading case of Saunders v Anglia Building Society [1971] AC 1004, the doctrine was described as follows:-

“It will not suffice if the signer thought that in some respect it would have a different legal effect from what it has; nor will it suffice if in some respects it departs from what he thought it would contain. The difference, whether it be in kind or substance, must be such that the document signed is entirely – the word used by Byles J – or fundamentally different from that which it was thought to be, so that it can be said that it was never the signer’s intention to execute the document.” (at 1022G-H, as perViscount Dilhorne)

“How, then, ought the principle, on which a plea of non est factum is admissible, to be stated? In my opinion, a document should be held to be void (as opposed to be voidable) only when the element of consent to it is totally lacking, that is, more concretely, when the transaction which the document purports to effect is essentially different in substance or in kind from the transaction intended.” (at 1026A-B, as per Lord Wilberforce)

70.I understand that the defence of non est factum is not lightly to be allowed, bearing in mind it is after all a legal document having been signed by a person of full age and capacity who should normally be bound by his signature to a document.  Nevertheless, each case is to be decided on its own facts.  There are special and exceptional circumstances in this case. 

71.As said, I have found that Chu was acting on the plaintiff’s instructions to prepare the Deed and the Assignment.  Also, as said, I have accepted the defendant’s evidence, supported by that of the Defence Witness, that Chu did not explain in detail the nature and the contents of the documents but simply asked the defendant to sign.  In the absence of evidence from Chu, it is unknown as to whether Chu was aware of the defendant’s mistaken belief of the nature and the contents of the documents.  In any event, what is relevant and important for the purpose of this case is whether the defendant was under any mistaken belief but not whether Chu was aware of the defendant’s mistaken belief.  

72.The defendant was already 73 years old in 2002 when the Deed and the Assignment were executed.  Also, it was all along the defendant’s intention to instruct Chu, on Defence Witness’s recommendation of Chu’s law firm (Ho and Wong), to prepare the probate document of the Mother’s will.  In the defendant’s mind, the only dealings he had with Chu, the lawyer, at the material time, were for that probate matter.  It is therefore understandable for him to expect the documents to be signed in Chu’s office were all related to the probate application.  Same for the Defence Witness, it is also understandable for him to expect that all the documents were for that purpose and that purpose alone.  All these may explain why the defendant, on that understanding, simply signed as told without paying much attention to the documents. 

73.No doubt the defendant considered the Defence Witness trustworthy, as he said, and he trusted him very much.  It is therefore reasonable for the defendant, as he said, to expect the Defence Witness to inform him if any of the documents would be prejudicial to his rights. Unfortunately, the Defence Witness was also unaware of the nature of the documents and therefore not in a position to advise the defendant.

74.Lastly and more importantly, as analysed above, the only person to benefit from the Deed and the Assignment would be the plaintiff whereas the defendant, and all other brothers, would only suffer a loss after executing those documents as their share in the 1-5/F would be reduced.  The Deed and the Assignment are voluntary dispositions which do not involve any monetary consideration.  It is common ground that the plaintiff and the defendant have long been on very bad terms.   It is unlikely that the defendant would voluntarily agree to a redistribution of the Mother’s estate to include the plaintiff, who was not supposed to benefit under the Mother’s will, out of natural love and affection for each other, as stated in Recital (6) of the Deed.  In other words, on the face of it, there is no reason at all for the defendant to give up part of his entitlement of the 1-5/F to the plaintiff. 

75.It is therefore likely, and I so accept, that the defendant would not have executed the Deed and the Assignment if he was aware of the genuine nature of those documents at the material time.  I am prepared to accept the defendant’s version that he, at the time of execution, mistakenly believed that the Deed and the Assignment were standard and routine documents for the Mother’s probate.  In other words, the Deed and the Assignment are essentially or fundamentally different from what the defendant intended to execute and that it was never his intention to execute them.  Also, in view of the defendant’s old age, his only intention of instructing Chu to assist with the Mother’s probate and his trust in the Defence Witness, I do not consider him to be negligent when executing those documents.  This defence of non est factum succeeds.  I find both the Deed and the Assignment void on that basis.

76.There is also a third defence, which is pursued as an alternative to the primary defence of non est factum, that the Deed and the Assignment are void as the parties executed them on a common mistake, namely they signed the documents on the basis that there was doubt as to whether the Mother’s will violated the Restriction when there was in fact no such doubt as the Restriction was plainly void or if it was not, the Mother’s Will did not violate it.  As I have already found that the defendant succeeds in the defence of non est factum in that he was under a mistaken belief that the Deed and the Assignment were probate documents as aforesaid, this defence of common mistake as pleaded in the above terms fails.

Disposal

Plaintiff’s claim

77.As I have found that the Deed and the Assignment are void on the ground of non est factum, the plaintiff’s claim for part of the rental income of 1-5/F, which is grounded on the validity of those documents, must fail.  I dismiss the plaintiff’s claim under this action.  

Defendant’s counterclaim

78.The defendant, by way of a counterclaim, seeks a declaration that the Deed and the Assignment as between the plaintiff and the defendant are void.

79.Both the Deed and the Assignment were executed by the 5 Siblings including the plaintiff and the defendant.  The other 3 brothers are not parties to these proceedings.  Nevertheless, each of the Deed and the Assignment could properly be construed as severable into separate agreements, including one between the plaintiff and the defendant, see other examples like an insurance policy between the assured and a syndicate of underwriters where there are in reality a number of contracts between the assured and each of the underwriters[55], a composite insurance policy which insures two or more persons with separate interests generally be treated as containing separate contracts[56], a company’s articles be treated in law as a contract between the company and each member and a contract between a member and each other member[57].

80.In view of my findings as above, I allow the defendant’s counterclaim and grant a declaration that the Deed and the Assignment as between the plaintiff and the defendant are void.

Costs

81.As a matter of general principle, costs should follow the event.  There is no reason why that general principle should not be followed in this case.  I therefore made an order nisi, which shall become absolute in 14 days in the absence of any parties’ objection, that costs of this action, including those of the plaintiff’s claim and the defendant’s counterclaim, be paid by the plaintiff to the defendant, with a certificate for counsel, to be taxed if not agreed.  

The plaintiff appeared in person

Mr Thomas Wong, instructed by Wilkinson & Grist, for the defendant