Ng Kit, Legal Representative and Sole Beneficiary of the Estate of Ng Kwun Yuen, Deceased v. Wu Tsun Hua and Others
Read the full judgment text of CACV 238/2021 on BabelCite. This Court of Appeal judgment was delivered on 25 November 2021.
1. This is an appeal by the plaintiff against the judgment of Deputy High Court Judge Paul Lam SC who dismissed his action against the defendants.
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CACV 238/2021 [2021] HKCA 1787 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 238 OF 2021 (ON APPEAL FROM HCA NO. 201 OF 2017) ________________________
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________________________ J U D G M E N T ________________________ Hon Cheung JA (giving the Judgment of the Court): I. The appeal 1.This is an appeal by the plaintiff against the judgment of Deputy High Court Judge Paul Lam SC who dismissed his action against the defendants. II. Background 2.Mr. Ng Kwun Yuen (‘the deceased’) died on 12 March 2011. He was survived by his wife who was the 1st defendant and his children which included the plaintiff who was his son and the 2nd defendant who was his daughter. The 3rd defendant is a sole proprietorship run by the 2nd defendant, and is not a separate legal entity. The Judge held that it is wrong for the plaintiff to sue it separately. 3.The deceased had three wives. The plaintiff was the son born of the first marriage. The first marriage ended in divorce. The plaintiff was then 3 years old. The deceased then married a second wife Madame Chang who subsequently died. The plaintiff had been looked after by Madame Chang who married the deceased when the plaintiff was five years old. In 1996, the deceased married the 1st defendant. She is a Taiwanese. 4.The deceased had three properties which are featured in this litigation. A flat in Windsor Mansion, Kowloon (‘the Windsor Flat’) in which the deceased lived with his second wife. This flat was registered in his sole name. He also used it to conduct his antique business called Golden Arts & Crafts Co (‘Golden Arts’). The second flat is in Pacific Building, Kowloon (‘the Pacific Flat’) where he lived with the 1st defendant since September 2007. This flat was registered in the joint names of the deceased and the 1st defendant. The third flat is in Shanghai (‘the Shanghai Flat’). The registered owners were initially the deceased and the 2nd defendant. In October 2009, it was transferred to the 2nd defendant and her sister. 5.In July 2008, the deceased was diagnosed with stomach cancer. On 11 August 2008, he made a will giving the Windsor Flat and his residuary estate to the plaintiff. 6.On 7 April 2010, the deceased made another will in Taiwan by which he appointed the plaintiff as his executor who should be responsible for his funeral and burial matters. 7.The health of the deceased gradually deteriorated in 2010. On 1 December 2010, he was admitted to a Medical Centre. He was being looked after by the 2nd defendant during his hospitalisation. 8.The plaintiff has been residing abroad in England (1972-1995) and Singapore (1995-2003) and eventually in England again from 2003 onwards. He returned to Hong Kong to visit the deceased on 20 November 2011. 9.By this action, the plaintiff claimed for the return of the deceased’s antiques (there was a dispute whether all of them were truly antiques and the Judge used the term artefacts to describe them) kept by the 1st and 2nd defendants in the Pacific Flat and the Shanghai Flat. He also claimed that the 2nd defendant had misappropriated JP¥ 3,000,000 (equivalent to about HK$210,000 at present) paid by a Japanese customer ACT East Co Ltd (‘AEC’) owned by one Mr. Sato to settle trade debts owed to the deceased’s antique business. The defendants contended that the artefacts were not properties belonging to the deceased’s estate. Instead, the artefacts were given to them as gifts by the deceased during his lifetime. 10.The plaintiff was the executor of the will of the deceased and the sole beneficiary of the deceased’s residuary estate. He also relied on a document which he described as a Chinese Codicil (‘the Codicil’) signed by the deceased in his claim for the artefacts. The content is as follows :
11.The Judge viewed the video clips of the deceased making the Codicil. The clips were silent. The Judge commented that the deceased appeared to be very sad in the video. The Judge also noticed a photo of the deceased’s second wife put next to the Codicil. The Judge stated that he had the distinct impression that the photo was placed by the plaintiff next to the Codicil intentionally. The Judge summarised the plaintiff’s evidence on the Codicil :
12.The Judge held that knowing that the Codicil was intended to be an important document, the plaintiff had not arranged lawyers or doctors to witness the execution by the deceased. He further stated that he had reservations whether the plaintiff had told him the whole truth as to the circumstances in which he persuaded the deceased to sign the Codicil. He believed that the plaintiff might try hard to persuade the deceased to sign the Codicil. Nonetheless, the Judge accepted that the deceased had signed this document because :
13.The Judge, however, found that the document was not in the nature of a codicil because the gift that the deceased made to the plaintiff was to take effect immediately and not only to take effect on his death which is the requirement for a testamentary codicil. 14.The Judge went on and held that the Codicil was, in any event, revoked by another document dated 26 January 2011 by the deceased (‘the Chinese Declaration’) which was produced and relied upon by the defendants in support of their case.
15.The defendants in support of their case that the artefacts had been given to them by way of gift also relied on a letter of the deceased dated 11 February 2011. Earlier on 9 February 2011, the plaintiff wrote an email to the 2nd defendant mentioning that they had a quarrel in the Medical Centre about two weeks before. The Judge held that there was a quarrel between them on 26 January 2011.
[*The plaintiff accepted that this is his nickname used by the deceased.] 16.The Judge dealt with this letter in detail :
III. The Judge’s decision 1) Assessment of the witnesses 17.The plaintiff gave evidence and called his wife and son to give evidence. The 1st and 2nd defendants gave evidence and called two other witnesses. 18.In respect of the plaintiff’s evidence, the Judge held :
19.The Judge stated that he did not find the evidence of the plaintiff’s witnesses particularly helpful. 20.In respect of the defendants’ evidence, the Judge held :
21.The Judge held that the evidence of the other two defence witnesses either did not assist the defendants’ case on the real issues or was not relevant to the real issues. 2) Acceptance of the defendants’ case 22.The Judge accepted the defendants’ case that the deceased had given them the artefacts by way of gift. He also found that in respect of the plaintiff’s claim for the JP¥ 3 million, the deceased had transferred his business in Golden Arts to the 2nd defendant and there was an equitable assignment of AEC’s trade debts to the 2nd defendant. (1) Pacific Flat Artefacts 23.In respect of the Pacific Flat, the Judge accepted that the artefacts in the flat were gifts to the 1st defendant. He held that the deceased initially kept the artefacts in the Windsor Flat but moved some to the Pacific Flat which was intended by the deceased to the home of the 1st defendant which she could use and stay in her right. He accepted the evidence of the 1st defendant that the deceased had one day told her that :
24.The Judge held that even if the Codicil is a proper codicil it cannot revoke the gifts :
25.The Judge held that the relationship between the plaintiff and the new family of the deceased was not a good one. He referred to the quarrel in the Medical Centre :
26.The Judge accepted the evidence of the 2nd defendant on the Declaration :
27.The Judge explained the significance of this document is that it is a piece of contemporaneous document evincing the deceased’s intention and his state of mind at the material time. He held :
28.The Judge further accepted the evidence of the 2nd defendant on the 11 February 2011 Letter. He further relied on this document in support of his finding that the artefacts were gifts to the defendants :
(2) Shanghai Flat Artefacts 29.The Judge first held that the plaintiff did not have the locus to claim and sue for these items :
30.The Judge then went on to consider whether the artefacts in the Shanghai Flat were part of the deceased’s estate. The Judge dealt with the evidence of the 2nd defendant :
31.He addressed the plaintiff’s criticism of the 2nd defendant’s lack of pleading that these artefacts were gifts but nevertheless accepted her evidence. He considered the deceased had in the past also given the plaintiff artefacts which he had sent to Singapore originally intended for an antique business to be set up there but later not pursued upon because the plaintiff and his wife did not wish to take up the business. The Judge held :
(3) JP¥ 3 million 32.The Judge held that it was not in serious dispute that, sometime after the deceased became ill, the business of Golden Arts was operated by the 2nd defendant. He accepted that, after July 2008 when the deceased had been diagnosed as suffering from cancer, he asked her to manage his business. He also found that there was a meeting in late November 2008 (after the deceased learnt that he was suffering from cancer) at which the deceased told Mr. Sato that he would hand over the business to the 2nd defendant and Mr. Sato agreed to continue to do business with Golden Arts on such basis, and also to pay all trade debts (both past and future) to the 2nd defendant as she directed. 33.The deceased’s business was terminated upon his death. The registration was cancelled on 6 July 2011. On 23 June 2011, the 2nd defendant commenced a business also called Golden Arts & Crafts Co (源 浩行). The Judge rejected the plaintiff’s argument that the 2nd defendant set up this company to deceive AEC into transferring monies to her. V. Grounds of appeal 34.The plaintiff advanced four grounds of appeal : 1) The Judge erred in finding there was an equitable assignment of the JP¥ 3 million because of novation. The Judge erred in conflating novation and equitable assignment. The evidence does not support a novation. The evidence does not support a valid equitable assignment because the chose was not sufficiently identified and there was no consideration. 2) The Judge erred in holding the plaintiff had no locus to sue for the artefacts in the Shanghai Flat. 3) The Judge erred in relying on an unpleaded defence by the defendants that the deceased’s transfer of the Shanghai Flat to the 2nd defendant and her sister amounted to a gift of the artefacts in that flat as well. 4) The Judge erred in holding the deceased had the intention of giving the artefacts in the Pacific Flat to the 1st defendant because it was contrary to the Codicil. The Chinese Declaration does not support the defendants’ case. 35.In the plaintiff’s first written submission, he elaborated on his grounds of appeal. He further contended that the Judge had ignored some material evidence in his assessment of the evidence. The plaintiff stated that he had assisted the deceased in the operation of his jewellery and antique business since 1970 by referring to the letters between him and the deceased between 1975 and 1981. The plaintiff referred to the parties’ pleadings and the verbal evidence of the defendants and their witnesses. He commented that the evidence given by the defendants and their witnesses was false or inconsistent. 36.In his supplemental submission, the plaintiff stated that the Judge had wrongly relied on certain matters, specifically the witness signatures in the Codicil in assessing his credibility. He also challenged the findings of the Judge in respect of his acceptance of the evidence of the 2nd defendant, the defence witness Jia and other matters. He commented on the video clips which the Judge had seen at the hearing below. 37.In Court, the plaintiff referred to the family history, about how he had suffered as a child when his birth mother left the deceased and took their youngest son with her. He referred to the evidence and repeated his view that the 2nd defendant had lied. He made specific comments on the 11 February 2011 Letter. He challenged the signature and the contents of this letter. VI. Our view 38.The plaintiff’s appeal covers both finding on facts and on law. We will deal with the appeal on facts first. This concerns the Judge’s finding that the artefacts in the Pacific Flat and Shanghai Flat were given as gifts by the deceased to the defendants. This aspect of appeal also covers the Judge’s finding on the events leading to the 2nd defendant receiving JP¥ 3 million from Mr. Sato. 39.The well-established principle in an appeal against a finding of fact by a trial judge is that the appellant must demonstrate that the finding is plainly wrong before the appellate court will interfere and overturn the finding. Various reasons have been given for this approach and they include the following : 1) The appellate court does not enjoy the advantages enjoyed by the trial judge who received the evidence at first-hand and had the benefit of observing the demeanour of the witnesses and how the whole of the evidence unfolded before him. 2) The appellate process is not designed to give a litigant (or his counsel) a platform for regurgitating his closing submissions on the evidence and factual aspects of the case with the hope that the appellate judges may come to a different view to that of the primary judge. 3) There are many areas, particularly those in relation to finding of fact, where judges can reasonably reach different conclusions from each other. That would not be a ground for intervention unless the decision is plainly wrong. 4) The written decision of the trial judge consists of the impressions he had of the witnesses and the evidence. It is not possible for the Judge to record in the decision each and every piece of evidence or his impression that he may rely upon in coming to his finding. 40.What is important to bear in mind is that where a trial judge has reached a conclusion on the primary facts, it is only in a rare case, such as where that conclusion was one (i) which there was no evidence to support, (ii) which was based on a misunderstanding of the evidence, or (iii) which no reasonable judge could have reached, that an appellate tribunal will interfere with it. 41.In our view, the plaintiff’s challenge on the factual finding by the Judge on the essential issues is bound to fail because the plaintiff is simply not able to show that the finding is plainly wrong. The case lasted five days before the Judge. He had dealt with the Codicil which he accepted to be signed by the deceased but held that it was revoked by the deceased because of the Chinese Declaration and the 11 February 2021 Letter. He had analysed the evidence relating to these two documents and accepted the defendants’ evidence that they were signed by the deceased. Specifically on the letter the Judge had dealt with it in detail in [65] of his judgment. We cannot see how the Judge can be faulted. 42.Apart from the two documents, the Judge had examined the background leading to the purchase of the Pacific Flat and the transfer of the Shanghai Flat. He had also addressed the plaintiff’s argument of the so-called unpleaded case of gift of the artefacts in the Shanghai Flat before coming to his finding that the artefacts were gifts given to the defendants. 43.The plaintiff is not able to show that the Judge’s finding of fact on the JP¥ 3 million is plainly wrong. His acceptance of the November 2008 meeting forms the cornerstone of the finding that the 2nd defendant is entitled to the money. Her assistance of the deceased in his antique business can hardly be challenged. As to the argument on law on whether the plaintiff has the locus to sue, it is not necessary for us to go into it because the Judge had ultimately held in favour of the defendants on the gift of the artefacts in the Shanghai Flat. 44.In respect of the law on assignment of a chose in action in the form of trade debts, the Judge rejected the plaintiff’s argument (he was represented by counsel at the trial) that an assignment of debt must be made in accordance with section 9 of the Law Amendment and Reform (Consolidation) Ordinance (Cap. 23). He referred to the law on equitable assignment which does not require any particular form of words so long as the words clearly show an intention that the assignee is to have the benefit of the chose or thing in action. An informal notice, including oral notice would be sufficient to constitute notice to the debtor. 45.He held that consideration is not required to support an equitable assignment of an existing legal chose or thing in action, provided that the assignor has done everything required to be done by him to make the assignment complete in equity. On the other hand, an assignment of future property can only operate as a contract to assign when the property comes into existence, and consideration is therefore needed. The Judge held that in a case where there was a tripartite agreement whereby the debtor agreed to pay the debt to a third party instead of the creditor, there would be a valid equitable assignment of the chose in action supported by consideration because the parties have in effect entered into a legally binding ‘novation’ or substituted agreement (see Anson’s Law of Contract, (31st ed., 2020), p 662). 46.The Judge further held it is unknown whether the trade debts making up the total sum of the JP¥ 3,000,000 received by the 2nd defendant were incurred before or after the transfer of business. Insofar the JP¥3,000,000 covered any trade debts owed to the deceased before the transfer of business, the Judge held that there was a valid equitable assignment supported by good consideration i.e. a novation agreement as just described. And even if there was no good consideration, according to German v Yates, since the deceased had not revoked his direction before he died, his executor cannot ignore it. Furthermore, the absence of good consideration (if that be the case) does not matter because the trade debts had already been paid, and the 2nd defendant is not seeking the Court’s assistance to enforce the equitable assignment. On the other hand, if the JP¥ 3,000,000 were trade debts incurred after the deceased had transferred his business, the 2nd defendant was, of course, entitled to receive them in her own right as the new proprietor of the business. 47.We do not consider that the Judge was wrong on the law. There was no wrongful conflation of the concepts of equitable assignment and novation. He was correct when he held there was a tri-parte agreement as a result of the November 2008 meeting. As the Judge observed :
VII. Conclusion 48.The plaintiff’s appeal is dismissed. As the parties are not represented and having considered the background of this case, we will make an order nisi that will be no order as to costs of this appeal.
Plaintiff, unrepresented, appearing in person 1st to 3rd defendants, unrepresented, appearing in person |