Chui Mong Shui and Another v. Wealth Asia Credits Ltd and Another

HCMP 2684/2017

[2020] HKCFI 2098

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2684 OF 2017

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Before:  Deputy High Court Judge William Wong SC in Court

Date of Hearing: 12 to 14 August 2020

Date of Judgment:  21 August 2020

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JUDGMENT

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1.In these proceedings, Mr Chui Mong Shui (“Mr Chui”) and Ms Ko Hok Wah (“Mrs Chui”), collectively, the Plaintiffs, seek to set aside (i) the minutes of consent order dated 20 July 2017 (the “Minutes of Consent Order”) and (ii) the Order of Registrar Lung dated 31 July 2017 (the “Consent Order”) made in HCA 822 of 2016 on the basis of their son i.e. Mr Chui Man Hin’s (the “Son” and the 2^nd Defendant) misrepresentations and undue influence. 

2.The Plaintiffs’ case is that Wealth Asia Credits Limited, the 1^st Defendant, as money lender, had constructive notice of their rights arising from such misrepresentations and/or undue influence. 

MATERIAL FACTS

3.The Plaintiffs together with their son are the registered owners of Flat B, 30/F, Block 7, Sun Tuen Mun Centre, Nos. 55 to 65 Lung Mun Road, Tuen Mun, New Territories (the “Property”) since 2011.  They are joint tenants of the Property.  It is undisputed that the entire purchase price of the Property was paid by the Plaintiffs. 

4.On 6 December 2013, the Plaintiffs executed a power of attorney in favour of the Son (the “Power of Attorney”).  Under the Power of Attorney, the Son could on behalf of the Plaintiffs execute, sign, seal and enter into any mortgages and/or legal charges of the Property.  (See Clause 7 of the Power of Attorney).  There is no dispute that the Power of Attorney was signed by the Plaintiffs. 

5.In the present proceedings, the Plaintiffs in their Amended Statement of Claim pleaded that the Power of Attorney was procured by fraud, misrepresentations and/or undue influence of the Son and is therefore null and void and of no effect, or liable to be set aside and/or rescinded.  However, this Court notes that, first, no relief is sought in the present proceedings to set aside the Power of Attorney.  Secondly, in the defence filed by the Plaintiffs in HCA 822 of 2016 (“the Defence”), a mortgagee action commenced by the 1^st Defendant herein, the Plaintiffs’ case is that they instructed a law firm to prepare a power of attorney to authorise the Son to manage the Property.  The Power of Attorney was signed in the presence of and witnessed by a staff member of the law firm. 

6.On 19 December 2013, the Son on behalf of himself and as attorney of the Plaintiffs entered into a loan agreement with the 1^st Defendant (“the 1^st Loan Agreement”).  Under the 1^st Loan Agreement, the 1^st Defendant as lender, granted a loan facility in the sum of HK$1,680,000 to the Plaintiffs and the Son at an interest rate of 2.5% per month.  It is not disputed that the said sum was all paid to the Son.

7.By a drawdown notice signed by the Son on behalf of himself and as attorney for the Plaintiffs, the 1^st Defendant:

(1)  Issued a cheque in the sum of HK$1,090,000 to the Son as the sole beneficiary; and

(2)  Applied the balance of HK$590,000 (HK$1,680,000 – HK$1,090,000) to settle the outstanding debt owed by the Son under his other existing loan agreements with the 1^st Defendant. 

8.On the same date, as security for the said loan advanced, the Son on behalf of himself and the Plaintiffs executed a legal charge over the Property in favour of the 1^st Defendant (“the Legal Charge”).  It is not disputed that:

(1)  The 1^st Defendant had not met with the Plaintiffs but solely relied on the Power of Attorney; and 

(2)  at the time of the execution of the Legal Charge, the 1^st Defendant had not obtained any title deeds of the Property from the Son and/or the Plaintiffs. 

9.On 21 May 2014, the Son on behalf of himself and the Plaintiffs entered into yet another loan agreement with the 1^st Defendant  under which a further sum of HK$300,000 was advanced to the Son and the Plaintiffs (the “2^nd Loan”) at the interest rate of 2.5% per month, collectively, the “Loan Agreements”. 

10.On 31 March 2016, the 1^st Defendant commenced HCA 822 of 2016 against the Son and the Plaintiffs and claimed for (i) vacant possession of the Property, (ii) outstanding loan amount in the sum of HK$1,980,000 and (iii) interest on the loan of HK$1,680,000 at the rate of 30% per annum from 19 January 2016 and, on the loan of HK$300,000, at the rate of 30% per annum from 21 January 2016 to the date of repayment.

11.On 12 April 2016, Messrs. Cheung & Liu filed an acknowledgement of service on behalf of the Son and the Plaintiffs indicating an intention to defend the action.

12.On 11 May 2016, the Son and the Plaintiffs filed a notice to act in person.

13.On 26 May 2017, the Son and the Plaintiffs filed their defences. 

14.On 17 July 2017, Mr Chui went to the office of Messrs. Cheung & Liu to hand over the title deeds of the Property.  One Mr Lui of Messrs. Cheung & Liu told Mr Chui that the title deeds would be passed to Wong & Co. for the purpose of negotiation for settlement. 

15.On 19 July 2017, the Son in a handwritten note stated that he was willing to hand over the keys of the Property to the 1^st Defendant.

16.On 20 July 2017, the Son and the Plaintiffs, at the office of the 1^st Defendant’s solicitors, Messrs. Wong & Co. (“Wong & Co.”) signed the Minutes of Consent Order.  Pursuant to the Minutes of Consent Order, the Plaintiffs, inter alia, admitted a debt of HK$3,306,438.36 to the 1^st Defendant and agreed to deliver vacant possession of the Property forthwith to the 1^st Defendant.  The Minutes of Consent Order is in Chinese.

17.On 25 July 2017, a copy of a summons returnable on 31 July 2017 to approve the Minutes of Consent Order was served on the Son and the Plaintiffs at the Property.  The said Summons is in Chinese.

18.At the hearing on 31 July 2017, only the Son appeared.  The Plaintiffs were absent.  Mr Registrar Lung made an order in terms of the Minutes of Consent Order. 

19.In about the end of September 2017, the Son requested the 1^st Defendant to give him and the Plaintiffs more time to vacate the Property.  The 1^st Defendant fixed the handover date on 15 October 2017. 

20.On 14 October 2017, typhoon signal No.1 was hoisted.  A director of the 1^st Defendant, Madam Au Mei Lin Sylvia (“Madam Au”) attended the Property as the representative of the 1^st Defendant.  She found the Property showed signs of packing.  The Son delivered a second set of keys of the Property to the 1^st Defendant’s real estate agent Midland Realty and said the typhoon affected the vacation of the Property.

21.Later, the Son sent photos to the 1^st Defendant showing that the Property had been vacated.

22.On 15 October 2017, typhoon signal No.8 was hoisted and the handover was deferred.

23.On 16 October 2017, the Son delivered possession of the Property and a third set of keys of the Property to the 1^st Defendant.  The Son informed the 1^st Defendant that the 3^rd set of keys of the Property was given by Mr Chui, and they (the Plaintiffs and the Son) had no more keys to the Property.

24.On 23 October 2017, the 1^st Defendant was informed by Midland Realty that Midland Realty had visited the Property.  When Midland Realty opened the door with the set of keys, a woman was found inside the Property.  The 1^st Defendant immediately contacted the Son to clarify but failed to get into contact with the Son.  Since then, the Son could not be contacted anymore.

25.On 24 October 2017, Madam Au of the 1^st Defendant attended the Property.  This time, she could not open the door of the Property with the keys.  Mr Chui opened the door.  Madam Au showed the Consent Order in Chinese to Mr Chui.  Madam Au’s evidence is that Mr Chui said that he did not want to look at it but he did not deny it. 

26.Madam Au then reported the matter to the Police. The Police suggested the 1^st Defendant to engage bailiffs to obtain possession of the Property.

27.After the Police had left, Mr Chui invited Madam Au into the Property.  Madam Au reiterated to Mr Chui that the 1^st Defendant must be given possession of the Property.  Mr Chui requested 3 days to handle the issue.  Madam Au  reluctantly agreed and left.

28.On 27 October 2017, Mr Chui informed the 1^st Defendant that he did not want to deliver possession of the Property. 

29.The 1^st Defendant therefore instructed its solicitors to apply for Writ of Possession and engaged the bailiffs.  The Writ of Possession and Fieri Facias Combined was sealed on 27 November 2017. 

30.On 8 December 2017, the Plaintiffs took out the present proceedings to set aside the Consent Order on the ground that it has been obtained by fraud and/or misrepresentations and/or undue influence of the Son. 

ASSESSMENT OF EVIDENCE 

31.Mr Chui gave evidence on behalf of the Plaintiffs.  Although Mrs Chui also filed one witness statement, she did not attend court to testify.  Madam Au and Mr Leung Fu Hang (“Mr Leung”), a solicitor of Wong & Co. who witnessed the Plaintiffs’ signature of the Minutes of Consent Order gave evidence on behalf of the 1^st Defendant. The Son, as the 2^nd Defendant, did not give any evidence. 

32.I am of the view that the two critical factual issues in this case is whether (1) the Plaintiffs knew what they signed on 20 July 2017 and its legal effects, and (2) whether they signed the Minutes of Consent Order by their own free will. 

33.Mr Chui’s evidence, as set out in paragraph 15 of his witness statement, is that on 20 July 2017:-

(1)  the Son told him that there was a chance to settle with the 1^st Defendant such that there was no need for the Plaintiffs to repay any loan and they could keep the Property.  The Son would further negotiate with the 1^st Defendant directly on how to resolve the outstanding loans.

(2)  When he arrived at the office of Wong & Co., a staff member of the law firm handed a document to them and asked them to sign. The staff member did not explain the contents of the document or ask them to seek independent advice before signing the document.

(3)  The Son repeatedly urged them to sign the document.  They believed that the Son would not deceive them and thought that by signing the document, they would be able to keep the Property and would not be liable for the debts of the Son.  Under such circumstances, they signed the document. 

(4)  Before signing the document, they did not have the chance to read the document carefully.

(5)  When the 1^st Defendant demanded for vacant possession of the Property in October 2017, he felt that he had been cheated by the Son and therefore he contacted his lawyers for assistance. 

34.During his oral testimony, Mr Chui confirmed the content of his witness statements and further said that on 20 July 2017, he was only shown page 2 of the Minutes of Consent Order.  He did not read page 1.  During the process, the Son spoke to him softly near his ear and asked him to sign the document.  He did not say that the Son repeatedly urged him to sign. 

35.Mr Leung’s evidence, as set out in paragraphs 12 to 25 of his witness statement, is that:

(1)  On 20 July 2017, the Son and the Plaintiffs attended his office at about 3 pm. 

(2)  They were met by his colleague, one Cheung Kwong Yu (“Cheung”) and were brought into a meeting room.

(3)  After being notified by Cheung, he met with the three of them in the meeting room.  The Son and the Plaintiffs sat on the side with their backs facing the windows.  He gave them his business card and introduced himself as the solicitor for the 1^st Defendant. 

(4)  He then passed the draft Minutes of Consent Order in Chinese to them.  Mr Chui took the document and started to read the contents.  To ensure all three of them understood the contents, he explained the contents line by line to all three of them in punti dialect, including the detailed legal description of the Property in English. 

(5)  He then moved on to the declaration part and specifically informed the three of them that he acted for the 1^st Defendant and the declaration part was particularly important.  He read the whole part to them and stressed that for their own protection, they better sought independent legal advice before signing the draft Minutes of Consent Order.  He also stressed that they should only sign the draft Minutes of Consent Order and the declaration voluntarily and only if they fully understood the contents. 

36.Mr Leung’s unshaken evidence under cross-examination is that the Son and the Plaintiffs all listened and nodded from time to time throughout his explanation.  He gave them time to discuss and read the draft Minutes of Consent Order.  He could hear what they discussed.  Mr Chui asked about the costs to the 1^st Defendant in paragraph 5 of the draft Minutes of Consent Order.  He explained to them that the Court has defined procedures to assess the costs if the parties could not agree on the amount and the 1^st Defendant would not unilaterally asked for an unreasonably huge sum on costs. 

37.His colleague Cheung also asked them to produce their HKID cards.  They did so without hesitation.  The Son and the Plaintiffs also informed him that they understood the contents of the draft Minutes of Consent Order and agreed to sign. 

38.He then explained that each of them had to sign twice on the draft Minutes of Consent Order.  Mr Chui signed first, followed by Mrs Chui and the Son.  He categorically stated that the Son had not urged Mr Chui and/or Mrs Chui to sign.  Throughout the process, Mr Chui appeared to be in the leading position. 

39.After each of them had put down two signatures, he signed below paragraph 5 as solicitors for the 1^st Defendant.  He further informed them that since they were not legally represented, an application would be taken out by the 1^st Defendant for all parties to attend a court hearing for the orders to be made according to the signed Minutes of Consent Order. 

40.He told them that he would send the document about the application and the hearing date to them by post later.

41.His colleague Cheung then made photocopies of the signed Minutes of Consent Order for them.  He then asked if they had any more questions and informed them that they might leave at their convenience.  They asked no more questions and left.

42.I have no hesitation in accepting Mr Leung’s evidence and rejecting Mr Chui’s evidence in relation to what happened on 20 July 2017.  I find Mr Leung to be an honest and credible witness.  His evidence is coherent, logical and sensible.  On the contrary, I find Mr Chui’s evidence unbelievable. 

43.First, I find it unbelievable that Mr Chui did not read the draft Minutes of Consent Order before he appended his signature to it twice.  The document is in Chinese.  It is very easy to read and understand. What is more, there is no explicable reason why only page 2 was shown to him but not page 1.  Even if he had only read page 2, it would have been clear to him that under paragraph 3, he and his wife would need to deliver vacant possession of the Property to the 1^st Defendant.  It simply defies belief that he went to the office of a law firm simply to sign a legal document in Chinese which he did not read.  I am firmly of the view that Mr Chui did not tell the truth to the Court. 

44.I also take into consideration that there is no fathomable reason why Mr Leung would not have explained the content of the Minutes of Consent Order to the Plaintiffs.  What then was the purpose of going to the office of Wong & Co.? The 1^st Defendant could have simply passed the draft Minutes of Consent Order to the Plaintiffs for them to sign at their leisure.  The reason why they had to attend the office of Wong & Co. was precisely so that explanations could be given to them and they could have raised questions. 

45.I have no difficulties in accepting Mr Leung’s evidence and find that the draft Minutes of Consent Order was given to the Plaintiffs and the Son during the meeting.  The Plaintiffs and the Son had read the documents and Mr Leung had explained the contents of the document line by line to them.  They fully understood the legal effects of signing the draft Minutes of Consent Order.

46.Secondly, I reject Mr Chui’s evidence that it was Cheung who passed the draft Minutes of Consent Order to them and asked them to sign.  I accept Mr Leung’s evidence that Cheung was a staff member of his office and his duties were simply to receive clients and carry out some clerical works.  I further accept Mr Leung’s evidence that it was him who passed the draft Minutes of Consent Order for the Plaintiffs and the Son to read and, if agreed, to sign. 

47.Thirdly, contrary to Mr Chui’s case, I accept Mr Leung’s evidence that there was no repeated demands or urges from the Son which caused the Plaintiffs to agree to the contents of the draft Minutes of Consent Order.  Mr Leung could listen clearly to the conversations between Mr Chui and the Son as he just sat opposite to them.  He confirmed that the Plaintiffs were given sufficient time to read the document and they could have asked any questions.  I accept that to be the case.     

48.Fourthly, I also accept Mr Leung’s evidence that Mr Chui took a leading position during the meeting in reading the document and raising questions in relation to costs and was the first in appending his signatures to the document.  I find that the Plaintiffs signed the Minutes of Consent Order by their free will and without any influence from the Son.

49.Fifthly, on the Plaintiffs’ case, their trust on the Son had been misplaced once, in that they were deceived by the Son in signing the Power of Attorney, and the only roof over their heads was put into jeopardy.  Under such circumstances, it is hard to believe that when they went to the office of Wong & Co. for settlement, they would have signed the draft Minutes of Consent Order without even reading it. 

50.Sixthly, the draft Minutes of Consent Order is in Chinese and is a document which is very simple and easy to read.  The first two paragraphs set out the Plaintiffs’ liability for the sum of HK$3,306,438.36 and the agreement to deliver up vacant possession of the Property forthwith.  Both obligations are of great significance to the Plaintiffs.  It could not have escaped their attention. 

51.Seventhly, there is no dispute that copies of the Minutes of Consent Order were given to them.  They could have read it and raised any objections had they been misled or unduly influenced to sign the same.  However, they had not done so until after the commencement of these proceedings in December 2017.

52.Eighthly, the summons attaching the Minutes of Consent Order and later the Consent Order made by Mr Registrar Lung were sent to the Plaintiffs.  The documents were in Chinese and specifically addressed to the Plaintiffs.  I agree with Mr Lau for the 1^st Defendant that if the Son had made the alleged misrepresentations and/or undue influence, the Plaintiffs could have immediately raised objections.  However, the Plaintiffs raised no objections at all after the said summons and the Consent Order were posted to them. 

53.Ninthly, in HCA 822 of 2016, the Plaintiffs filed the Defence on 26 May 2017.  The Defence put forward was that the staff member of the law firm did not explain the content of the Power of Attorney to them and they signed it because the staff member had misled them.  In such circumstances, it is hard to believe that the Plaintiffs would once again sign a document which they had not read simply because the Son and/or a staff member of another law firm asked them to do so.  This simply defies belief. 

54.Tenthly, it is pertinent to note that Mr Chui’s evidence is that had he read page 1 of the Minutes of Consent Order on 20 July 2017, he would definitely have refused to sign the same.  This tends to show that he was perfectly capable of making independent decisions on 20 July 2017. It was just that he was being misled by the Son and had not read the document before his signed it. 

55.For all the reasons stated above, I find that:

(1)  The Plaintiffs have read the draft Minutes of Consent Order before they signed it. 

(2)  Mr Leung had explained the content of the draft Minutes of Consent Order line by line, including the declaration part, to them clearly.

(3)  The Minutes of Consent Order is a simple document in Chinese.  The Plaintiffs were given time to read and consider the document.  They have full understanding of the legal effects of the document before they signed it. 

(4)  The Plaintiffs were able to refuse to sign the draft Minutes of Consent Order had they wished to.  Nevertheless, they signed the draft Minutes of Consent Order by their free will.  They were not unduly influenced by the Son to sign the same. 

MISREPRESENTATION

56.By reason of the factual findings above, I have no hesitation in dismissing the Plaintiffs’ claims based on the Son’s pleaded misrepresentations.  Whatever misrepresentations the Son might have made to them prior to the meeting on 20 July 2017, such misrepresentations would have been negated by the clear wordings of the Minutes of Consent Order and as read and explained to the Plaintiffs by Mr Leung.

57.Ms Yuen for the Plaintiffs fairly accepted that had this Court come to the view that the Plaintiffs had read the draft Minutes of Consent Order and understood its legal effects, there could not be any reliance on the part of the Plaintiffs on the Son’s misrepresentation. 

UNDUE INFLUENCE

58.Given that this Court finds that the Plaintiffs signed the draft Minutes of Consent Order after full, free and informed thought about it, in my view, there is no room for the operation of the claims based on undue influence.  I have no doubt that the Plaintiffs fully understood the nature and effect of their consent and signature on the draft Minutes of Consent Order and they did so with their free will fully unconstrained.  That really should be the end of the analysis of this claim.

59.In Bank of China (Hong Kong) Ltd v Wong King Sing & Others [2002] 1 HKLRD 358 at 366-367, Recorder Ma (as he then was) at §34 said:

“34. I should preface the discussion of this defence with the observation that, as with all aspects of the law, one has to apply a large degree of common sense to the matter. The proliferation of cases in this area, particularly in recent times, creates a tendency to have principles mechanically set out as almost formulas to be applied. While this is convenient and provides a logical basis for the application of, at times, not uncomplicated principles, it is to be borne in mind that the defence of undue influence is ultimately a simple concept. It has all to do with informed consent. Once a court forms the view that consent was freely given with full knowledge of the consequences of entering into the relevant transaction, that is the end of the matter, however improvident the transaction may objectively appear. The rationale for the defence of undue influence is to prevent the victimisation of the complainant. It is there to protect people from being forced, tricked or misled in any way by others into entering into a disadvantageous transaction: see Allcard v Skinner (1887) LR 36 Ch D 145 at pp.182-183; National Westminster Bank Plc v Morgan [1985] AC 686 at p.705. As Lord Nicholls of Birkenhead said in Royal Bank of Scotland Plc v Etridge (No 2) [2001] 3 WLR 1021 at p.1029 para.8, the unacceptable conduct lies in ‘a relationship between two persons where one has acquired over another a measure of influence, or ascendancy, of which the ascendant person then takes unfair advantage.’” (Emphasis added.)

60.In Bank of China (Hong Kong) Ltd v Wong Kam Ho [2014] 1 HKLRD 41, Godfrey Lam J. at §§25-27 and 29 said:

“25. Undue influence is a doctrine of equity that enables the court to strike down a transaction where the intention to enter into it had been procured unconscionably. This may arise where the claimant had been overborne or coerced by another person, or where a person in whom the claimant had reposed trust and confidence abused that relationship in procuring the claimant’s consent. The forms that undue influence can take are infinitely varied and cannot be exhaustively set out, but they all result in the conclusion that the consent and intention of the claimant is so vitiated that it ‘ought not fairly to be treated as the expression of a person’s free will’: Etridge, supra, [7] per Lord Nicholls.

26. Whether or not a transaction was brought about by the exercise of undue influence is a question of fact. The burden of proving this fact lies with the person who asserts it, that is to say, generally, the person who claims to have been unduly influenced. As with other matters of fact, this question can be determined by the court by reference to direct evidence, such as the oral evidence of the person complaining of undue influence that she signed the document in question as a result of being subjected to ‘excessive pressure, emotional blackmail or bullying’, or by inference from other, indirect evidence.

27. What facts can and should be found by inference is a question that depends on the circumstances of each case. The question is ‘whether the evidence justifies the inference that, on a balance of probabilities, the impugned transaction was procured by undue influence, that is to say, by an abuse by the allegedly dominant party of the trust and confidence reposed in him by the allegedly subservient party’: Li Sau Ying v Bank of China (Hong Kong) Ltd (2004) 7 HKCFAR 579, per Lord Scott NPJ [34]…

29. The concept of a transaction that calls for explanation has been put in different ways, such as a transaction that is ‘not readily explicable by the relationship of the parties’ (Etridge, supra, [21] per Lord Nicholls), a transaction that is ‘not to be reasonably accounted for on the ground of friendship, relationship, charity, or other ordinary motives on which ordinary men act’ (Allcard v Skinner (1887) LR 36 Ch D 145, 185, per Lindley LJ; Etridge, supra, [22], [29], per Lord Nicholls), and a transaction that ‘constituted an advantage taken of the person subjected to the influence which, failing proof to the contrary, was explicable only on the basis that undue influence had been exercised to procure it’ (National Westminster Bank plc v Morgan [1985] AC 686, 704, per Lord Scarman; Etridge, supra, [25], [29], per Lord Nicholls). As will be seen, it is a concept quite separate and different from the question whether the third party is put on inquiry, which arises at the second stage of the analysis.” (Emphasis added.)

61.Ms Yuen for the Plaintiffs fairly accepted that the Plaintiffs are not relying on actual undue influence as there are no evidence that the Son actually unduly influenced the Plaintiffs to sign the Minutes of Consent Order.  There is no evidence that the Plaintiffs were subject to any excessive pressure, emotional blackmail or bullying whether by direct evidence or inference from indirect evidence. 

62.Instead, Ms Yuen, doing the best she possibly can, argued that the Plaintiffs could rely on presumed undue influence.  I am not entirely sure that given the factual findings of this Court, there is a need to deal with  the plea on presumed undue influence.  However, in deference to the comprehensive arguments put forward by Ms Yuen for the Plaintiffs, I will deal with this claim for the sake of completeness.

63.Although the Plaintiffs’ relationship with the Son is not one that influence is presumed as a matter of law, Ms Yuen submitted that the Plaintiffs have established as a matter of fact that there was a relationship of influence between the Plaintiffs and the Son and the transaction in question cannot be readily explicable by the relationship of the parties.  In other words, the transaction “calls for an explanation”.  (See Bank of China (Hong Kong) Limited v Wong King Sing & Ors [2002] 1 HKLRD 358 at §47 per Recorder Ma (as he then was) and Royal Bank of Scotland plc v Etridge (No 2) [2002] 2 AC 773 at §§14, 21 per Lord Nicolls.)

64.Once the presumption of undue influence arises, the onus then shifts to the influencer or the relevant third party (usually a creditor) to demonstrate that the relevant transaction was entered into free of any undue influence.  (See Bank of China (Hong Kong) Limited v Wong King Sing & Ors [2002] 1 HKLRD 358 at §§41, 55 per Recorder Ma (as he then was)).

65.If the presumption is not rebutted, one would have to consider whether a third party money lender has been put on inquiry.   

Relationship of Influence

66.First, I am of the view that a relationship of parents and an adult child in and of itself cannot give rise to a relationship of influence.  In fact, there are cases where parents and their children’s relationship are rather hostile. 

67.Secondly, a relationship of trust and confidence per se is not enough to give rise to a presumption of influence.  In Duress, Undue Influence and Unconscionable Dealing (3^rd Ed), the learned author  at §10-038 said:

“Trust and confidence must be of a sufficient degree to warrant the conclusion that influence naturally grew from it and that the relationship between the parties was one in which the alleged wrongdoer had influence over the complainant.  In Goldsworthy v Brickell, Nourse LJ stated that what must be shown is “that the degree of trust and confidence is such that the party in whom it is reposed … is in a position to influence” the party reposing it… Thus, trust and confidence in the sense of the ordinary loving relationship between a mother and her son still living at home on affectionate terms is not enough… A party can prove that they reposed trust and confidence in the alleged wrongdoer and still fail to establish a relationship of influence if the court considers that the level of trust and confidence reposed was insufficient to give the alleged wrongdoer influence over the complainant…” (Emphasis added.)

68.By way of illustration, Ms Yuen for the Plaintiffs referred this Court to two cases.  In Hackett v Crown Prosecution Service [2011] EWHC 1170 (Admin) at §54, Silber J said:

“Not surprisingly and quite correctly, Mr Fletcher accepts, as I would have inevitably found to be the position, that there was such a relationship because in June 2003, the claimant signed a Power of Attorney in favour of her son, namely the second defendant and this meant that there was a relationship of presumed influence between the claimant and the second defendant. There are further reasons why there was a relationship of presumed influence between the claimant and the second defendant such that a potential claim of presumed undue influence arises and this requirement is satisfied because first the claimant was deaf, dumb, barely educated and illiterate and second, since the death of her husband, she had become reliant on the second defendant to manage her affairs and to physically care for her. There was clear evidence from, for example, the claimant’s sister Mrs Savage that the claimant went ‘downhill’ after her husband’s death in 1997 so that in consequence she was reliant on the second defendant to deal with these matters on her behalf.”

69.In Greene King Plc v Stanley [2001] EWCA Civ 1966 (English CA) at §§49 and 105, a relationship of influence is found to have existed between parents and an adult son where the parents were “relatively naïve in financial matters”, and the adult son showed “rather greater financial acumen”, and he had assisted them in financing matters previously.

70.However, each case depends on its own facts.  In the present case, there is no evidence that the Plaintiffs were influenced by the Son in relation to their financial affairs and/or other matters.  It is not clear to the Court as to what influence the Son did exert on the Plaintiffs. 

71.First, on the Plaintiffs’ case, although the Son was registered as a co-owner of the Property, they had never intended that he should have any beneficial interest.  The Son was added as a co-owner simply to facilitate him to help the Plaintiffs to deal with property management issues when they were not in Hong Kong.  The Plaintiffs stressed that they never intended to gift one third of the Property to the Son.

72.Secondly, although a power of attorney was signed by them, the Plaintiffs’ case is that they were misled by the Son to sign and they had no idea that it was a power of attorney which would allow the Son to borrow money on their behalf and to mortgage the Property.  The Son had to resort to deception rather than influence. 

73.Thirdly, it has not been shown that the Son had any greater financial acumen.  On the contrary, the Son has led himself into a position of serious indebtedness and had to resort to using the Plaintiffs’ property to raise a mortgage to pay off his own loans secretly without the knowledge of the Plaintiffs.  On the other hand, the Plaintiffs managed to buy their first property with mortgage.  They paid off the mortgage of that property and bought their second property without mortgage.  They sold off their second property and bought the Property again without mortgage.  It cannot be said that they were or are naïve in financial matters. 

74.Fourthly, Ms Yuen for the Plaintiffs submitted that the Plaintiffs relied on the Son to handle HCA 822 of 2016 for them.  Hence, the Son had an influence over the Plaintiffs.  I am not convinced that one can necessarily draw that conclusion.  First, as a matter of fact, the Plaintiffs did instruct Messrs. Cheung & Liu to act for them and passed the titles deeds of the Property to Messrs. Cheung & Liu for the purpose of settlement with the 1^st Defendant.  I agree with Mr Lau for the 1^st  Defendant that this Court cannot presume that Messrs. Cheung & Liu had not obtained consent and/or instructions from the Plaintiffs to do so. 

75.Further, assuming that the Plaintiffs did delegate it to the Son to handle HCA 822 of 2016 for them, it does not necessarily mean that the Son has an undue influence over them.  The problem was created by the Son and it is understandable that the Plaintiffs might have relied on the Son to handle the legal proceedings.  But it does not mean that by reason of such delegation, the Plaintiffs were under the undue influence of the Son. 

76.Fifthly, Ms Yuen for the Plaintiffs submitted that this Court should find that the Plaintiffs signed a one-page English document, which turned out to be part of the Power of Attorney in reliance on the Son’s representation that it was to authorise him to manage the Property if they were out of town.  The Plaintiffs did not question why they only signed a one-page English document because they trusted the Son.

77.First, the above assertion is inconsistent with the Defence filed by the Plaintiffs in HCA 822 of 2016.  In the Defence, they stated that they instructed a law firm to draft a power of attorney and they signed the document in the presence of a staff member of the law firm.  Both in his witness statement and during his oral testimony, Mr Chui said that he signed the Defence at the request of the Son without evening reading it.  The Defence is a two-page document in Chinese.  Immediately above their signatures is a statement of truth.  On balance, I do not find it believable that the Plaintiffs signed the Defence, an important court document, in a rush without even reading its content. 

78.Further, even if I were to accept the Plaintiffs’ version of events that they only signed a one-page English document, it does not necessarily mean that the Son had an undue influence over them.  No doubt, the Plaintiffs greatly trusted the Son.  But it does not mean that the Son could prevail over the Plaintiffs to pressurise them to enter into transactions against their interests.  Those are two distinct and different concepts.

79.In fact, Mr Chui’s evidence was that he was surprised and questioned the Son when he discovered that the Property was subject to the Legal Charge.  The Son told them that he had a liquidity problem and hence had to resort to borrowing from the Defendant.  It is hard to believe that, given what the Son had done to the Plaintiffs, they would have blindly and continuously followed the instructions of the Son without independent thinking.  Whether, at the end of the day, out of parental love, they decided to bail out the Son is another matter. 

80.I should also mention that I find Mr Chui’s evidence that the Son told him that the 1^st Defendant had agreed that the Plaintiffs would not be liable for his outstanding indebtedness and they could keep the Property and would only look to the Son for repayment simply unbelievable.  It is difficult to see why the 1^st Defendant would have given up its claims against the Plaintiffs and its security over the Property when it was still pursuing HCA 822 of 2016 then.  Given the financial position of the Son, even if the 1^st Defendant were to prevail in HCA 822 of 2016 against the Son, it might well end up with an empty judgment.  Overall, I have to say that I do not find Mr Chui to be a credible witness. 

81.Sixthly, it is Mr Chui’s evidence that had he read paragraphs 1 and 2 of the Minutes of Consent Order, he would never have signed it.  In my view, this shows that he was capable of making an informed decision.  He might have trusted and believed what the Son told him but, once he found out the correct factual position, he was perfectly capable of making decisions to protect his own interests. 

82.Seventhly, Ms Yuen for the Plaintiffs submitted that the fact that a previous agreement is entered into under undue influence can be highly relevant to whether a subsequent, related agreement is also entered into under undue influence.  She referred this Court to the cases of Samuel v Wadlow [2007] EWCA Civ 155 and Yorkshire Bank Plc v Tinsley [2004] 1 WLR 2380 for the proposition that where a previous, related agreement is liable to be set aside on the ground of undue influence, that can be highly material to whether a subsequent, related agreement between the same parties can also be set aside, depending on the facts of each case.  I have no problem in accepting that as a correct proposition of law.  However, I am of the view that it is not applicable to the facts of the present case for two reasons.  First, on the Plaintiffs’ case in the present proceedings, the Power of Attorney was procured by fraud rather than undue influence.  The fraud was successfully perpetrated because of a strong degree of trust rather than undue influence.  I also note that in the Defence, the Plaintiffs’ case was one of negligence and failure to explain on the part of their own lawyers.  Secondly, by the time of the execution of the Minutes of Consent Order, I find as a matter of fact that the Plaintiffs signed the document with full knowledge of its contents and effects.  They could have refused to sign the same but chose to sign it out of their free will voluntarily.

83.Eighthly, on the Plaintiffs’ case, the Son would have resorted to fabrication of documents.

(1)  A provisional sale and purchase agreement dated 20 November 2016 bearing the signatures of the Plaintiffs were not actually signed by the Plaintiffs.  It could only have been fabricated by the Son. 

(2)  The document dated 10 October 2017 which also bears the Plaintiffs’ signatures was again not signed by the Plaintiffs.  Again, the natural inference is that the Son fabricated the Plaintiffs’ signatures. 

84.In the circumstances, I find that the Plaintiffs have failed to prove, as a matter of fact, that there was a relationship of influence between the Son and the Plaintiffs.  Again, that really should be the end of analysis.   

Transaction calls for an explanation

85.To establish presumed undue influence, one also has to show that the transaction is “not readily explicable by the relationship of the parties” or one that is “not to be reasonably accounted for on the ground of friendship, relationship, charity, or other ordinary motives on which ordinary men act”: Bank of China (Hong Kong) Ltd v Wong Kam Ho [2014] 1 HKLRD 41 at §29 per G Lam J.

86.The test of whether a transaction is one that calls for an explanation is an objective test.  Therefore, the actual or objective effect of a transaction has to be assessed.  (See Duress, Undue Influence and Unconscionable Dealing (3^rd Ed) at §11.010.)

87.In Hammond v Osborn [2002] EWCA Civ 885, an elderly man gave away a substantial amount of money to a younger lady on whom he had come to depend for his daily needs.  The effect of the transaction is that almost all of his liquid assets are paid away, and he became prospectively liable to pay a hefty amount of tax which he did not have sufficient assets to pay, and such serious tax consequences (which the man did not appreciate) was taken into account by the Court in finding that the transaction called for an explanation, even though the man proposed making the gift himself (at §§52 to 58).

88.The benefit conferred on the other side can be so large and out of proportion with the benefit (if any) to be received by the complainant, such that the transaction cannot be reasonably accounted for on the ground of friendship, relationship, charity, or other ordinary motives on which ordinary men act: Etridge (supra) at §§22, 29.

89.Ms Yuen for the Plaintiffs is fair in saying that it is not unusual that parents repose trust and confidence in their adult children, especially when they grow older and if they are less sophisticated.  Certainly, this does not mean that whenever they confer certain benefit on their adult child, such transactions are procured by undue influence.  Instead, many transactions may be explicable by parental love and affection.

90.However, Ms Yuen submitted that a transaction may call for an explanation where a parent exposes himself to significant risks and derives little or no benefit from the transaction, especially when a very substantial part of their assets are involved, whereas the child derives substantial benefit: Duress, Undue Influence and Unconscionable Dealing (3^rd Ed) at §11-022.

91.Ms Yuen submitted, as an illustrative example, the case of Greene King Plc v Stanley [2001] EWCA Civ 1966 where the English Court of Appeal at §106 held that a charge executed by elderly parents over a property to secure a loan for their son’s business venture, when the property was the parents’ home and their only significant asset, was not readily explicable on the ground of family relationship or other motives on which ordinary people act. 

92.However, it is of paramount importance that facts must be analysed in context.  In a Hong Kong Chinese context, in my view, it is perfectly explicable that parents, out of parental love, would willingly use their only significant asset, here the Property, to bail out their only son. There is no suggestion that the Son has any independent source of income to pay off his debts. 

93.I should also mention that I do not accept Mr Chui’s evidence that the Son is not a co-owner of the Property.  I accept Mr Lau’s submission that, if indeed the reason why the Son was registered as a co-owner was merely to facilitate the Son in managing the Property during the Plaintiffs’ absence from Hong Kong, it is inexplicable why the Son would use the same reason to persuade the Plaintiffs to sign the Power of Attorney and the Plaintiffs would have believed it.  On balance, I find that out of parental love, the Son is registered as a co-owner of the Property. 

94.Further, I also note that in an affirmation filed by the Son in HCA 822 of 2016 dated 20 December 2016, he stated that he encountered financial needs as a result of his business in the Mainland China. He then had a discussion with the Plaintiffs who agreed to mortgage the Property so that loans could be raised to help solve his financial difficulties. Of course, I am well aware that the Son did not attend court for cross-examination and, on the Plaintiffs’ case, he lied to them many times. 

95.Significantly, Ms Yuen for the Plaintiffs repeatedly submitted that the Plaintiffs have a strong defence in HCA 822 of 2016.  They have always indicated that they would contest the proceedings.  Hence, it is inexplicable as to why just two months after they filed the Defence, they would have agreed to sign the Minutes of Consent Order.  That itself calls for an explanation. 

96.Ms Yuen also referred to a breach of Section 18 of the Money Lenders Ordinance, Cap.163 in that the 1^st Defendant failed to provide a note or memorandum to the Plaintiffs for their personal signature.  By reason of such breach, the Loan Agreements and the Legal Charge are likely to be unenforceable, since there is nothing rendering it inequitable for the same to be unenforceable when the Plaintiffs knew nothing about and did not benefit from the agreements.  Ms Yuen submitted that it is of no financial benefit to the Plaintiffs to sign the Minutes of Consent Order and thus in effect abandon their strong defence.  Such detriment is out of proportion with the potential legal costs that could be saved. 

97.First, I am of the view that the Plaintiffs, at most,  have an arguable defence in HCA 822 of 2016.  It is not a case suitable for summary determination.  However, I note that undue influence was not even pleaded or relied on in that case.  But assuming that amendments would be made to run a case on undue influence, on the facts as unfolded in the current proceedings, as I find above, the Power of Attorney was procured by misrepresentations rather than undue influence by the Son. 

98.Insofar the reliance on a breach of section 18 of the Money Lenders Ordinance, Cap.163 is concerned, Mr Lau for the 1^st Defendant submitted that, notwithstanding such breach, the court may order that such agreement or security is enforceable to such extent, and subject to such modifications or exceptions, as the court considers equitable under section 18(3). 

99.Secondly and more importantly, I am of the view that the crucial issue is whether it is inexplicable for the Plaintiffs to enter into a settlement in terms of the Consent Order with the 1^st Defendant.  In my view, it is not inexplicable.  There are inherent risks and costs considerations in any litigation.  It is indisputable that the Son had borrowed money from the 1^st Defendant.  The Son’s defence that he thought that the interest rate was 2.5% per annum instead of per month is utterly unbelievable.  It is entirely plausible that the Plaintiffs decided to bail out the Son by agreeing to the settlement in terms of the Consent Order.    

100.Thirdly, I also take into consideration that a copy of the Minutes of Consent Order was passed to the Plaintiffs after the 20 July 2017 meeting.  I also accept Madam Au’s evidence that the Plaintiffs and the Son were in fact vacating the Property in October 2017.  All these facts negate the possibility that the Plaintiffs were unduly influenced by the Son in signing the Minutes of Consent Order.

101.Fourthly, I refer to the pleaded particulars relied upon by the Plaintiffs in paragraph 33(1) to (3) of the Amended Statement of Claim.  The only pleaded facts that give rise to undue influence are:

“(1) there existed between the Plaintiffs and the 2^nd Defendant a relationship of trust and confidence by reason of the parent and child relationship between the Plaintiffs and the 2^nd Defendant, and the fact that the Plaintiffs (being an elderly couple) lived together with the 2^nd Defendant for over 32 years until around late 2017. In around late 2013, the Plaintiffs also agreed to confer upon the 2^nd Defendant authority to manage the Property.

(2) The Plaintiffs, both aged about 68 at the time of execution of the Minutes of Consent Order, relied on the truth of the 3^rd Representation to sign the Minutes of Consent Order. Further, the Plaintiffs were not highly educated, whereas the 2^nd Defendant (33 years old at the time) was a university graduate from Hong Kong Polytechnic University. The 2^nd Defendant also constantly reassured the Plaintiffs that he would handle the Action on their behalf and resolve the matter for them.

(3)  In the premises, the Plaintiffs reposed trust and confidence in the 2^nd Defendant, in particular for legal and financial matters, as well as matters relating to the Property.  This include matters relating to the Action and those involving documents which contain English, technical and/or complex language.”

102.I have analysed the above particulars and am of the view that cumulatively they did not subject the Plaintiffs to any undue influence of the Son.  I should also mention that I do not consider the age of 68 to be particularly vulnerable to undue influence nowadays.  I saw Mr Chui in court and he was capable of giving clear explanations to court. 

Rebuttal of the presumption

103.If I am wrong in my analysis in relation to the existence of a relation of influence between the Plaintiffs and the Son, I am of the view that the evidence clearly shows that the Plaintiffs understood the nature and effect of the draft Minutes of Consent Order and they entered into the settlement in terms of the Consent Order with their free, unconstrained will. 

104.I agree that to rebut the presumption of undue influence, it is insufficient to show that the surety or mortgagor knew what she was executing.  It is important to show that he or she did so on his or her own volition.  As I have analysed above, I come to the view that no influence was exerted by the Son during the meeting on 20 July 2017.  If anything, his alleged misrepresentations would have made the Plaintiffs on guard as to what the Son told them when they read the draft Minutes of Consent Order.  I also accept Mr Leung’s evidence that Mr Chui took a leading position in the meeting. He would have no difficulties in walking away from the meeting if he refused to sign the draft Minutes of Consent Order.

105.Ms Yuen for the Plaintiffs invited this Court to view what happened during the 20 July 2017 through the lens of someone under undue influence.  It is certainly plausible that, under undue influence, Mr Leung’s explanations of the contents of the draft Minutes of Consent Order could have made no or minimal impression on Mr Chui (and Mrs Chui).  Ms Yuen referred this Court to the case of Corbett v State Bank of New South Wales (Unrep., New South Wales Supreme Court, 20.10.1992), where Hodgson J. at p.32 said:

“In relation to Mrs Corbett, I do not think there was any misrepresentation or undue influence by the Bank itself, and I believe an explanation of the mortgage was given to her when she signed it in Murwillumbah. However, I do accept her evidence to the effect that such explanation as may have been given made no impression on her. Furthermore, it appears that she herself had no interest in Major Mining, whose debt was being secured. Her provision of the mortgage was procured by Dr Corbett, and I accept that he exercised a very substantial influence over her. I accept also that Dr Corbett told her that the debt being secured was a debt of $90,000.00, and I accept that the impression given to her to that effect was not overcome by documents which she later signed.” (Emphasis added.)

106.Again each case depends on its own facts.  In the present case, Mr Chui’s case was not that the explanation made no impression on him.  His evidence was that there was no explanation at all and importantly, if an explanation was given to him, it would create a huge impression on him because he would definitely have refused to sign the draft Minutes of Consent Order. 

107.Ms Yuen for the Plaintiffs submitted that what Mr Chui said was something he said now with hindsight.  I disagree.  What Mr Chui told this Court was that had he been told that he would be liable for HK$3,306,438.36, he would never have signed the draft Minutes of Consent Order.

Duty of Inquiry

108.If I am wrong on my factual findings in relation to what happened on 20 July 2017 and the existence of a relation of influence as alleged by the Plaintiffs, I would have found that the 1^st Defendant would be put on inquiry. 

109.A third party creditor in a tripartite transaction with the influencer and the complainant would be “put on inquiry” where (i) the third party creditor knows of the “non-commercial” relationship between the surety and the debtor is sufficient (see Etridge (supra) per Lord Nicholls at §§84-87, at 813D and 814D) and where the transaction is on its face not to the financial advantage of the complainant (See Treitel, The Law of Contract (15^th Ed) at §10-043 and Duress, Undue Influence and Unconscionable Dealing (3^rd Ed) at §24-019.)

110.The threshold for a third party creditor to be put on inquiry is a low one: Etridge (supra) at §44; Wong Kam Ho (supra) at §55.

111.Once the third party creditor is put on inquiry, the third party creditor has to take reasonable steps to satisfy itself that there was no undue influence.  What are reasonable steps will depend on the facts of each case: Wong Kam Ho (supra) at §§56, 59. 

112.On the facts of the present case, I am of the view that the 1^st Defendant would be put on inquiry for three obvious reasons.  First, Madam Au of the 1^st Defendant told this Court that the title deeds of the Property are of paramount importance to the 1^st Defendant and she had repeatedly demanded the Son to deliver the title deeds to them.  However, the Son on many occasions told her that the Plaintiffs were out of town and the title deeds were kept by them.  This lasted for two to three years.  I am of the view that any prudent and reasonable money lender would have sensed that something might be wrong and they should make further inquiries directly with the Plaintiffs. 

113.Madam Au said that she asked for the Plaintiffs’ telephone numbers from the Son but the Son said that she could not have contacted the Plaintiffs because they were not in Hong Kong.  This, in my view, again raised more red flags and should have alerted the 1^st Defendant to make further inquiries.

114.Secondly, Ms Yuen for the Plaintiffs is right in pointing out that it is unusual for the 1^st Defendant to advance the 2^nd Loan to the Son when the title deeds of the Property were not delivered.  It is not difficult at all for the 1^st Defendant to impose a condition that the title deeds of the Property had to be delivered before more loans could be advanced.  I accept that the 1^st Defendant took a rather high risk in advancing the 2^nd Loan without any title deeds. 

115.I accept that Madam Au’s evidence is credible.  It is just that the 1^st Defendant took a high level of risk in a competitive environment.  In that context, the 1^st Defendant could be put on inquiry of the Son’s unde influence. It is obvious that the 1^st Defendant advanced the 2^nd Loan to the Son because the Son had been paying interest and there was still margin by reason of the then market value of the Property.  Ms Yuen referred to the Amended Statement of Claim in HCA 822 of 2016 to support the fact that the Son did not pay any interest or principal under both Loan Agreements.  However, I note that the 1^st Defendant only claimed interest as from 19 January 2016 and 21 January 2016 which means that interest payments prior to those dates under the Loan Agreements had been paid. 

116.In Dah Sing Bank Ltd v Sing Fai Handbags Manufactory Ltd & Ors, HCMP 1250/2003, unreported, 17 September 2004, Tang J. (as he then was) at §31 said:

“31. Of course, as the wife was not aware of the 1^st Mortgage, there could be no question of undue influence so far as the execution of the mortgage was concerned. But surely, the bank would be [put] on enquiry whether the power of attorney was itself the result of undue influence. On enquiry, the bank might well be told that the power of attorney was given freely and without any undue influence, but that the purported use by the donee was in breach of fiduciary duties. Such knowledge would prevent the bank from relying on the power of attorney.”

117.Thirdly, in their Defence in HCA 822 of 2016, the Plaintiffs have already stated that the staff member of a law firm and/or the Son misled them in signing the Power of Attorney.  Wong & Co. acted for the 1^st Defendant in HCA 822 of 2016.  In such circumstances, I am of the view that the 1^st Defendant should make sure that the draft Minutes of Consent Order were explained to the Plaintiffs separately in the absence of the Son.   

Mrs Chui’s Position

118.Mr Lau for the 1^st Defendant submitted that Mrs Chui’s failure to give evidence has deprived the 1^st Defendant’s opportunity to cross-examine on the facts as alleged by Mr Chui.  The 1^st Defendant is not able to test the inconsistency of the evidence between Mr Chui and Mrs Chui.  After the trial, the Plaintiffs by letter dated 17 August 2020 informed this Court that at the pre-trial review hearing on 12 November 2019 before Madam Justice Lisa Wong, the learned judge indicated as there was significant overlap of evidence between Mr Chui and Mrs Chui, the attendance of Mrs Chui seemed unnecessary and the 1^st Defendant did not then raise any objection. It was against such background that the Plaintiffs indicated to the Court that they would only call Mr Chui to give evidence at trial in order to save the court’s time.  First, I am of the view that irrespective of any observations by the Court, it is up to the Plaintiffs to decide how to conduct their case. Given that Mrs Chui was not called to testify before this Court, this Court cannot take into account her evidence. Secondly, as a result of my factual findings as set out above, I am of the view that the absence of Mrs Chui’s evidence will not make a material difference in the overall evalution of the evidence in the trial.

DISPOSITION

119.This is a sad story.  I have a lot of sympathy for the Plaintiffs.  It was their only son who created this situation for them. However, it is the duty of the Court to make decisions on the facts and the correct legal principles. 

120.By reasons of the matters stated above, the Plaintiffs’ claims are dismissed.  I also make a cost order nisi that the Plaintiffs do pay the costs of and occasioned by the 1^st Defendant in these proceedings on a party to party basis, to be taxed if not agreed. 

121.Finally, it remains for me to thank Ms Yuen for the Plaintiffs and Mr Lau for the 1^st Defendant for the helpful assistance they rendered to this Court. 

Ms Sharon Yuen, instructed by Messrs CY Tsang & Co, for the 1^st and 2^nd Plaintiffs

Mr Roy Lau, instructed by Messrs Francis Kong & Co, for the 1^st Defendant

The 2^nd Defendant acting in person and did not appear