CHEUNG YUK YING ENGRACIA v MACGREGOR ISABELLA

HCA 2870/2017

[2022] HKCFI 376

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2870 OF 2017

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Before:  Mr Recorder Jose Maurellet SC in Court

Date of Trial: 10 – 13 January 2022

Date of Judgment:  14 February 2022

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JUDGMENT

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Introduction

1.  On the face of it, the issue which is to be tried in the present proceedings is relatively straightforward.  The witness statements were comparatively short and the bundle of documents very slim.

2.  The parties together with their helpful opening submissions formulated the agreed issue in this way:

“whether the Shares[1] were transferred in 2009 from the Plaintiff to the Defendant pursuant to the alleged Oral Trust Agreement or as a gift?”[2]

3.  In practice however, for reasons which I will explain below the fact-finding exercise is in fact quite difficult as there is almost a complete dearth of contemporaneous documents either proving the Plaintiff’s case or proving the Defendant’s case[3].

4.  While documents and events can be said to be consistent with one’s case, this is quite different from saying they are probative of the same.

5.  Both Mr Robert Pang SC (together with Ms Agnes Kwong) appearing for the Plaintiff and Mr Steven Kwan (together with Ms Joyce HY Lee) appearing for the Defendant accepted that the resolution of the key issue depended on the credibility of the respective parties.

6.  There is no dispute that on the face of it, the Shares were transferred in 2009 (“the Transfer”). What is hotly disputed is the true nature of the Transfer. As Mr Pang rightly and succinctly put it in his   written closing[4] “the sole issue in this matter is the Plaintiff’s intention at the time of transferring the Shares to the Defendant”.

7.  What is quite extraordinary is that there is no document or direct message between the Plaintiff and the Defendant which has been discovered and produced. In addition, no truly independent witness has been called either.

8.  While this is on its face a dispute about property and money, this litigation is in reality the continuation of a personal fallout by other means. As vividly summed up by Mr Kwan in his closing “as in many respects of human relationship, the real reason for [the relationship’s] termination is elusive and may escape even the most exact scrutiny of a trial. People may drift apart for a myriad of reasons”.

The Plaintiff’s pleaded case

9.  The Plaintiff issued her endorsement of claim on 12^th December 2017.

10.  She claims against the Defendant for “breach of trust in relation to shares transferred by the Plaintiff to the Defendant in 2009 and subsequently held by the Defendant on trust for the Plaintiff, an account of profits arising out of those shares, interest, costs and further or other relief as the Court thinks just”.

11.  The Plaintiff’s statement of claim which was amended twice is very short: excluding the relief prayer and a list of the Shares, the body of the statement of claim is only slightly in excess of two pages.

12.  The Plaintiff claims that in or about mid 2009 she and the Defendant had already agreed that the Plaintiff would transfer all her shareholdings in certain listed companies in Hong Kong to the Defendant, and that the Defendant would hold the same on trust for the Plaintiff to apply the same for payment of the Plaintiff’s medical and other expenses as necessary, or at the Plaintiff’s direction and to pay all dividend income from such Shares to the Plaintiff.

13.  It is then averred that pursuant to the said agreement on or about 30^th June 2009 the Plaintiff’s Shares were thus transferred to the Defendant.

14.  It is further pleaded that the transfer was made without any consideration but that these “were not gifted to the Defendant” and in the circumstances, the Defendant is said to hold the Shares on trust for the Plaintiff who at all material times would retain the beneficial interest therein.

15.  It is also averred that in or around October 2010 the Defendant provided two payments to the Plaintiff.  In particular, one was in the sum of HK$78,898 on 5^th October 2010 and one for approximately HK$200,000 in early 2011, however that cheque had been lost by the Plaintiff and therefore never cashed in; but that save as to these “the Defendant has failed and or refused to pay any dividend income from the Shares to the Plaintiff”.

16.  Although not put in as many words in the statement of claim, in her witness statement (at paragraph 30) the Plaintiff states that between May and June 2009, a consensus was reached between herself and the Defendant such that:

(a)  The Plaintiff will transfer the Shares to the Defendant for safekeeping in the form of a trust for her;

(b)  The Defendant will sell the Shares according to her instructions in the future;

(c)  The Defendant will give the Plaintiff dividends received from the Shares in accordance with her instructions in the future;

(d)  The Defendant will pay the Plaintiff’s medical and other expenses on her behalf when her health conditions become critically worse;

(e)  The Defendant will transfer the Shares back to her in accordance with her instructions in the future.

17.  The Plaintiff explains that in or around 2015 because she wanted to make a contribution and thus ‘buy into’ a development for seniors known as Tanner Hill, she requested the Defendant to return the said Shares together with the dividends but this had not been done and the Defendant had then refused to take her calls or reply to her WhatsApp messages.

18.  This culminated in a visit by the Plaintiff to the Defendant’s home to visit her and that the Defendant refused to open the door. The Plaintiff then had to resort to communicating with the Defendant through messaging via the Defendant’s son Miguel Cruz (“Miguel”) who is the only other witness to have given evidence in these proceedings apart from the Plaintiff and the Defendant themselves.

The Defendant’s pleaded case

19.  The Defendant’s pleaded case is similarly quite short.

20.  The Defendant essentially avers that the Shares were transferred from the Plaintiff to her and registered in her name by way of a gift.

21.  She says that in July 2009, the Plaintiff invited her together with Miguel (the Defendant’s youngest son) to lunch where the Plaintiff told her that she intended to give her some shares. 

22.  The Plaintiff then took the Defendant and Miguel to one Patrick Chan (“Patrick”) who was a broker at a brokerage called Prudential, and whereby the said Shares were transferred to the Defendant.

23.  The Defendant says she subsequently discovered that the Plaintiff had been involved in divorce litigation (“the Litigation”) with her former spouse (“the Ex Husband”) since even before the Shares were transferred to the Defendant and that she did not want to be involved with that Litigation so she had visited Patrick to seek to return the Shares but the Plaintiff refused this.

24.  The Defendant thus claims that the legal consequence of this being a gift is that naturally the Shares are not held on trust and therefore the Plaintiff is not entitled to either the return of the Shares nor the payment of any dividend or interest paid on the said dividends.

25.  The Defendant pleads that as the Plaintiff was going through a divorce at the time, she had told the Defendant that she would rather give the Shares to the Defendant rather than benefitting her Ex Husband[5].

26.  In so far as the money transfers referred by the Plaintiff is concerned, the Defendant claims that that the HK$200,000 cheque was given to help the Plaintiff settle her legal costs incurred in the Litigation and the HK$78,897 were paid for reasons which the Defendant has now forgotten. However, both of these are stated to be made as ‘loans’ to the Plaintiff.

27.  The Defendant says that due to the passage of time she can’t be sure whether the HK$78,897 was the payment used for the Plaintiff to settle her legal costs. The Defendant avers that notwithstanding these amounts were never repaid she had not requested repayment.

Lack of contemporaneous documents

28.  As mentioned above, given the paucity of contemporaneous documents (i.e. around mid 2009), it is not altogether easy to ascertain whose version of facts is true.

29.  This lack of direct documentary evidence extends to the period post Transfer all the way up to mid 2015 when the only messages which have been exchanged between the Plaintiff and Defendant (through her son Miguel) have been produced.

30.  These messages between the Plaintiff and Miguel which have been produced start on 21^st May 2015 and end by the end of that year.

31.  Firstly, I should point out at once that it seems that relatively little can be made from these messages. By that stage it is clear that the Plaintiff and the Defendant were no longer communicating directly and the rift between them had happened.

32.  It is therefore obvious (and this is apparent from the way some of those messages are carefully worded) that because of the dispute between the Plaintiff and the Defendant which had clearly arisen, each camp was simply trying to entrench their position by either referring to a ‘gift’ or a ‘trust’. In that sense the probative value of those messages in assessing which party’s version of events (as remembered by them now) seems to me to be very minimal.

33.  The Plaintiff in the WhatsApp messages to Miguel refers to “her” shares, dividends received “on my behalf” and that there were witnesses and that she received dividends twice. 

34.  Miguel on the other hand refers to what looks like a possible settlement between the parties to the Shares which the Plaintiff “gifted”.

35.  Secondly, while the Defendant sought at least initially to dispel any notion that there was any intention on her part to settle, in response to a question from the Court she accepted that at least in 2015 she had given thought as to whether to transfer back the Shares although she later decided not to.

36.  This is consistent with Miguel’s messages at the time that he had gone to lawyers to see how any ‘settlement’ could be reached in practice. There was perhaps an element of Miguel having ‘over promised’ the Plaintiff in terms of what the Defendant had actually agreed to, as he was caught in the cross fire between his mother and the Plaintiff.

37.  These messages evidencing some possibility or desire to settle are of relatively little probative value as to whether or not the Plaintiff had made a gift or whether the Defendant was holding these on trust.

38.  There can be many reasons why the Defendant would have considered transferring the Shares back.

39.  Obviously these being on trust as the Plaintiff says would be one of them but equally it could be to practically resolve the dispute and to free Miguel from what he no doubt considered to be a very stressful situation.

40.  In addition, even if the Defendant considered that she was under no legal obligation to return the Shares as the Plaintiff claimed; she could also feel she was under some moral obligation having regard to all the good things the Plaintiff had done to her over the decades and this would involve simply returning what was given to her in the first place.

41.  I note that in the Plaintiff’s messages there is more than a hint of some form of impropriety on the Defendant’s part (and possibly on the Plaintiff’s part) which may or may not explain why there is a bit of a void from 2009 to 2015 in terms of what the parties explain happened during that time and the lack of documentary evidence[6] contemporaneous to that period.

Relevance of the Form E

42.  One important and almost the sole contemporaneous document in this case was the document known as the ‘Form E’ financial statement (“Form E”) which had been sworn by the Plaintiff qua respondent in her divorce proceedings.

43.  It is not disputed that at that time the Plaintiff had access to legal advice as she was represented by a leading matrimonial firm.

44.  The first page of the Form E stated as it did pro forma, as follows:

“Please fill in this form fully and accurately. Where any box is not applicable write “N/A”. You have a duty to the court to give a full, frank and clear disclosure of all your financial and other relevant circumstances. A failure to give full and accurate disclosure may result in any order the court makes being set aside and an order for cost being made against you. If you are found to have been deliberately untruthful, criminal proceedings for perjury may be taken against you … This statement must be sworn or affirmed before a solicitor or a Commissioner for Oaths before it is filed with the Court or sent to the other party.”

45.  And at paragraph 2.7, the affirmant is asked to “give details of all stocks, bonds and other quoted securities and other investments in Hong Kong or elsewhere which you hold or in which you have a beneficial interest” (my emphasis).

46.  The Plaintiff in the Form E had referred to her holdings using an annex and disclosing as the total current value of her interest some shares worth about HK$3.5M which were then broken down by brokerage in which these shares had been held, and also which shares were held and in what quantities and value.

47.  The Form E was signed by the Plaintiff on 31^st August 2009 before an independent third lawyer and next to her signature, it is stated that she confirmed she “solemnly, sincerely and truly declare and affirm that the contents of this my affirmation are true and confirm that the information given above is a full, frank, clear and accurate disclosure of my financial and other relevant circumstances”.

48.  Naturally, Mr Steven Kwan who appeared for the Defendant sought to place great emphasis on this document and highlighted that this was effectively a statement made very shortly after the Transfer (less than two months) at a time where there would have been no incentive or motive on the part of the Plaintiff to be lying about it and obviously this occurred before the relationship between the Plaintiff and the Defendant turned sour.

49.  I would for my part add that this could also be said (subject to any explanation for this statement being mistaken) to be evidence as to the Plaintiff’s own understanding of the state of affairs at that time.

50.  Mr Kwan submits it is unthinkable that this is something which would not have crossed her mind if the Plaintiff in fact held the beneficial interest in the Shares at that time through the Defendant, in particular given the value of the Shares transferred, the fact that she was receiving legal advice and the short period of time between the Transfer and the Form E.

51.  His case is of course not that the Plaintiff was lying in the Form E, on the contrary she accurately failed to mention the Shares because she no longer owned them anymore, rather the Defendant owned them legally and beneficially.

52.  Having been ordered to produce this part of her Form E by the Court, it is remarkable that the Plaintiff says very little about this in her witness statements.

53.  In her supplementary witness statement dated 5^th February 2020 at paragraph 9 she merely says this:

“Regarding the order issued by Master Wong King Wah on 25 November 2019, requiring me to make disclosure in respect of Form E 2.7 and 2.11 and the parts relating to the Stocks in the divorce case (hereinafter referred to as “Relevant Divorce Proceeding Documents”), I filed an affidavit disclosing the Relevant Divorce Proceeding Documents. As a long time has passed, I do not remember why the Stocks were not mentioned in the Relevant Divorce Proceeding Documents at that time”.

54.  In the witness box she maintained that at the time she swore to the Form E, she had genuinely forgotten about this trust arrangement but that she had not intended to be dishonest. It was thus an oversight.

55.  She accepted that at a later stage[7] when she had realised that she had mistakenly failed to list the Shares in the Form E, it was then too late to do something about it and it would be too complicated. In any event, she further frankly acknowledged that while it occurred to her to alert her Ex Husband of that mistake, given the appalling manner in which he had treated and humiliated her she just could not get herself to do it.

56.  In short, her position could be said to be that although she recognised that as a matter of law and procedure she should have alerted her Ex Husband, her feelings of betrayal, abandonment and humiliation were such that she just could not get herself to do it.

Approach to credibility

57.  Both parties accepted that this was a case which essentially turned on findings of fact to be made by the Court.

58.  Mr Pang SC referred to the judgment of Deputy High Court Judge Au (as Au JA then was) in Lee Fu Wing v Yan Po Ting [2009] 5 HKLRD 513:

“53.  In assessing the credibility of a party’s case on a particular issue, I accept the submissions of Ms Lisa Wong (leading counsel for the Plaintiffs) that the Court should take into considerations the following:

(1)   Whether the party’s case is inherently plausible or implausible.

(2)   Whether the party’s case is, in a material way, contradicted by other evidence (documentary or otherwise) which is undisputed or indisputable.

(3)   Where it is shown that a witness has been discredited over one or more matters to which he has given evidence using the above tests. This is relevant to the assessment of his overall credibility.

(4)   The demeanour of the witnesses.”

59.  Mr Kwan drew attention to the observations of Lord Pearce in Onassis and Calogeropoulos v Vergottis [1968] 2 Lloyd’s Rep 403:

“‘Credibility’ involves wider problems than mere ‘demeanour’ which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be. Credibility covers the following problems. First, is the witness a truthful or untruthful person?

Secondly, is he, though a truthful person, telling something less than the truth on this issue, or, though an untruthful person, telling the truth on this issue?

Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so, has his memory correctly retained them?

Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by over-much discussion of it with others? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance.

And lastly, although the honest witness believes he heard or saw this or that, it is so improbable that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness. And motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the credibility of a witness; they are all part of one judicial process. And in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part.”

60.  As I indicated to the parties during the opening submissions, this is consistent with the issues generally arising from the fallibility and potential unreliability of human memory which perhaps are not as well recognised as they should be.

61.  These have been summarised by Coleman J in Yu Man Fung Alice v Chiau Sing Chi Stephen (unrep, HCA 1584/2012, 23^rd December 2020, [2020] HKCFI 2923) in the following way:

“56.  The various judicial and academic observations would bear repetition at some length, but I shall attempt to restate them in more compressed form:

While everyone knows that memory is fallible, we are often unaware of the full extent to which our own and other people’s memories are unreliable.

Common and related errors include supposing that (a) the stronger or more vivid a recollection, the more likely it is to be accurate, and (b) the more confident a person is of their recollection, the more likely it is to be accurate.

But memory is not a mental record fixed at the time of the experience, then fading gradually over time.  So it is a misconception that memory operates like a camera or video device making a fixed and chronological record of an experience.

Rather, memories are fluid and malleable, being constantly rewritten whenever they are retrieved.

What gets encoded into memory in the first place is determined by what a person attends to, what they have already stored in memory, and their expectations, needs and emotional state.

This information is subsequently integrated or consolidated with other information already stored in a person’s long-term, autobiographical memory.

What is subsequently retrieved from that memory is determined by the same multitude of factors, and additionally by what drives the recollection of the event.

What is retold about an experience depends on the person to whom one is talking, and what the purpose is of remembering that particular event.

What gets remembered is reconstructed from the remnants of what was originally stored, taking account of whatever has already been forgotten or any interference from any new experiences across the interval between storing and retrieving a particular experience or event.

So the content of memory for experiences involves active manipulation, integration with pre-existing information, and reconstruction of that information.

Memory is particularly vulnerable to interference and alteration when a person is presented with new information or suggestions about an event in circumstances where his or her memory of it is already weak due to the passage of time.

Therefore, and in addition, the process of civil litigation itself subjects the memories of witnesses to powerful biases.

First, such witnesses often have a stake in a particular version of events.  This is obvious where the witness is a party or has some type of loyalty to a party to the proceedings.

Secondly, other subtler influences come into play, perhaps from the process of preparing a witness statement and coming to court to give evidence for one side in the dispute.  The natural desire to assist, or not prejudice, the party calling the witness, and the desire to give a good impression in a public forum, can be significant (even if unconscious) motivating forces.

Considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial.  A witness is asked to make a statement, often (as in this case) when a long time has already elapsed since the relevant events.  The statement is usually drafted for a witness by a lawyer who is inevitably conscious of the significance for the issues of the case of what the witness does or does not say.

The witness statement is made after the witness’s memory has been ‘refreshed’ by reading documents.  Yet those documents themselves often include statements of case and other argumentative material, as well as documents not previously seen by the witness, or documents which came into existence after the events which the witness is being asked to recall.

The witness statement may go through several iterations before it is finalised.

Months or even years later, the witness will be asked to re-read his or her statement and review documents again before giving evidence in court.

The effect of the process is to establish in the mind of the witness the matters recorded in his or her own statement and other written material, whether they be in fact true or false, and to cause the witness’s memory of events to be based increasingly on this material and later interpretations of it, rather than on the original experience of the events.

There is also a powerful tendency for people to remember past events concerning themselves in a self-enhancing light.

It is also not uncommon for witnesses to deceive themselves in what are essentially honest but nonetheless false recollections.”

62.  Coleman J further cautioned that:

“57.  These matters do not mean that human memory is simply unreliable.  Often, memory is reliable.  However, it is also fallible, and so when assessing reliability, it is important to have in mind what causes that fallibility.

58.  Therefore, in a case such as the present case, it seems to me that a sensible approach may be to limit (or at least be cautious about) the reliance placed on the witnesses’ individual recollections of what was said in conversations, and to give more weight and make factual findings on inferences drawn from any documentary evidence as well as known or probable facts, in particular objective facts.

59.  Documents which are likely to be helpful are those contemporaneous documents which may describe not only what was going on, but also the motivation and state of mind of those concerned.  Documents passing between the parties themselves can be important, but in some cases ‘internal’ documentation may also greatly assist.

60.  In most cases, the credit of a witness on matters not germane to the litigation is unlikely to be helpful, and the demeanour of witnesses is not a reliable pointer to honesty or accuracy.  Witness evidence, written and oral, is obviously not without purpose; but, its principal uses are to allow scrutiny of any documentary record and to evaluate the witness’s motivations, personality and working practices.

61.  Evaluation of a witness’s evidence may, depending on the particular circumstances, also include having regard to factors such as: evasive and argumentative answers, tangential speeches avoiding the question, blaming legal advisers for pleadings, disclosure and evidence shortcomings, self-contradiction, internal inconsistency, shifting case, new evidence, and selective disclosure: see Painter v Hutchison [2007] EWHC 758 (Ch) at §3.  There may be other factors in any particular case, but this list gives important and helpful guidance.  As will be seen, some of them are rather pertinent to this case.

62.  An examination of the consistency of conduct and documents and motives will, therefore, likely be helpful.  As long as it is recognised that there is also a risk of potential (perhaps unconscious) bias in the identification of them, it is the inherent probabilities and likelihoods which will be of greater assistance in deciding what, on the balance of probabilities, actually happened.”

63.  I have borne the above principles in mind.

64.  The key disputed fact in these proceedings depends on discussions, agreements and intentions surrounding the Transfer which was in mid 2009 (i.e. more than 12 years ago).

65.  The first round of witness statements in this case were exchanged in 2019.

66.  It is worth noting that the Plaintiff is almost 90 years old and that the Defendant is 74 years old although it is fair to say that both appeared to be mentally alert and in good physical condition.

67.  Given the passage of time, it is inevitable that some recollections about what exactly happened would be mixed up or not entirely accurate.

68.  There are two additional important considerations to bear in mind which I should mention here.

69.  First, it is clear that the Plaintiff has been greatly affected by her Ex Husband’s behaviour, and that she was and still is deeply hurt by what she considers to be his betrayal and humiliation by subsequently initiating the divorce.

70.  Second, the Plaintiff and the Defendant were very close in 2009[8]. They had always been close, basically behaving as sisters and referring to each other as such. The Defendant recognized that the Plaintiff had doted on her and showered her with gifts in the past in particular when the Defendant was under humbler circumstances[9].

71.  The Plaintiff had been in the past and was in every way the Defendant’s ‘rich cousin’.

72.  By 2009, the Defendant had recently lost her husband and the Plaintiff’s husband had left her. This drew them somewhat even closer as they encouraged and comforted each other in that difficult period.

73.  Between 2009 and 2014-2015 however one or more events happened such that their bond was broken. It is possible that this had to do with matters other than the Transfer.

74.  Whether this was partly caused by the Defendant getting too close to a Mr Sit (as the Defendant suggests the Plaintiff considered to be the case) or whether it was a combination of seeing each other less and avoiding the Plaintiff to return the Shares (as the Plaintiff suggests) what is clear is that at least since at least 2015, whoever is to be blamed (if indeed anyone is or can be blamed) it would appear that the fallout was genuine on both sides and that there is a sense of betrayal which is shared by both.

75.  This is relevant because this would affect how the Plaintiff and Defendant now remember and want to remember what was said or agreed back in 2009 when they were still as close as sisters.

Burden

76.  I indicated to the parties at the opening that having regard to the evidence in the present case, it was highly unlikely that the Court would need to resort to the burden of proof in order to determine this case.

77.  In any event, I accept Mr Pang SC’s submissions that the burden to establish a gift is on the Defendant.

78.  As the learned editors of Snell’s Equity (34^th edition) point out:

25-003

“Where A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested in B alone or in the joint names of A and B, there is a presumption that A did not intend to make a gift to B: the money or property is held on trust for A (if he is the sole provider of the money) or in the case of joint purchase by A and B in shares proportionate to their contributions.

In both kinds of transaction, the facts giving rise to the presumption of a resulting trust are that A transfers property to B for which B provides no consideration. The trust arises by operation of law to give effect to presumption that A did not intend B to take the property beneficially. The presumption can be rebutted by proof that A did in fact intend B to take the property as beneficial owner. This intent may be established by direct evidence, or to a degree by reliance on the presumption of advancement.

The presumption of advancement sometimes applies to transfers between parties where it may be readily inferred that A would have intended to make a gift to B.  It is found therefore where A is under an equitable obligation to support or make provision for B.  An example is where A is the father of B.  It is, in effect, a counter-presumption which provides prima facie evidence about A’s intentions as to where the beneficial interest in the property should lie.  Its effect is to negative any initial presumption that the transfer creates a resulting trust.”

25-015

“Related to the resulting trust that arises when one person purchases property in the name of another is the trust where the current owner property. A, makes a voluntary transfer of the property to another, B. The two kinds of transaction are fundamentally alike. Where A pays money to B for no consideration, B is immediately presumed to hold the money on resulting trust for A. When B then purchases the property, the effect of overreaching is that the trust transposes itself to the property acquired with the money. The rules for rebutting the presumption of resulting trust are similar in the two kinds of case.

However, statute has made the rules on voluntary conveyances more complicated than the rules applying to purchases in the name of another. Its effect has been to introduce a distinction in the effect of voluntary transfers of real or personal property.”

79.  I note the pleading point made in the Defendant’s opening submissions that “[P] has only pleaded an express oral trust and not resulting trust (which is a totally different species of trust). As the Court of Appeal observed poignantly in Mui So Bing v Wan Chi Sing [2020] 1 HKC 85, legal practice has changed much since the 1970s and the Court should require the parties to plead not only material facts but also all the legal consequences to which those facts validly lead” by reference to paragraph 23.3 of Mui So Bing.

80.  As Fok PJ pointed out in Lo Yuk Sui v Fubon Bank (Hong Kong) Ltd (2020) 23 HKCFAR 138 that passage in the judgment of Yuen JA in the Court of Appeal (which was strictly speaking obiter dictum) should not be read as “suggesting a rigid requirement to plead legal consequences flowing from the pleaded facts.  Instead, that dictum is to be understood in the context of that particular case where the plaintiff had pleaded a specific legal consequence (resulting trust) “and nothing else”, so that when, on appeal, the plaintiff then sought to assert an alternative legal consequence (and therefore one inconsistent with the only consequence pleaded), it necessarily took the other side, and the court, by surprise”.

81.  In the present case, there is clearly no surprise as the Plaintiff’s case has been clearly set out from the get go. In fairness to Mr Kwan he did not seriously press the pleading point.

82.  In any event as explained above, this issue is an academic one on the facts of the present case.

Analysis

83.  I will set out below some of the factors which I consider to be more important in my assessment of the evidence of the parties. These were also generally the ones which the parties’ respective counsel highlighted. Although the factors are set out under separate headings below, what the Court has to embark on is of course a holistic exercise and each of these is not necessarily compartmentalized as one aspect would influence another.

Witnesses demeanour and other observations

84.  I have reminded myself that the Court is trying issues and not personalities.

85.  I have also borne in mind that the events have taken place over a decade ago. Irrespective of the legal rights and wrongs, it is palpable that both the Plaintiff and the Defendant in their own ways and for their own reasons feel they are the wronged ones.

86.  Given the closeness of their relationship prior to 2009 and so for decades it is not an exaggeration to say that this is not unlike a divorce of relatives/close friends with the sense of betrayal, disappointment and loss which it entails.

87.  It is fair to say that on most issues both the Plaintiff and the Defendant tried to give their evidence as they now remember it. This is of course different from what they would have remembered in 2009 and even their own understanding as to what had been agreed might have differed even back then, albeit less so than now.

88.  It is of course not realistic to expect that either party would remember every detail and exactly what happened and when.

89.  The Plaintiff is and was genuinely angry with the Defendant and this may well colour her perception of what exactly had happened. She clearly thinks she trusted the wrong person and has been betrayed.

90.  The Defendant was comparatively more guarded and careful. She was especially careful in distancing the Transfer from the Plaintiff’s Litigation (given the obvious and possibly serious implications) and hence perhaps for this reason tried to emphasise she wasn’t aware of the Litigation at the time of the Transfer even if she was aware of the collapse of the relationship between the Plaintiff and her Ex Husband.  This is perhaps why she even claimed that after she had learned of the divorce lawsuit she had somewhere halfheartedly considered returning the Shares.

91.  Given that none of the parties is suggesting that the Transfer was part of a scheme to deceive the Plaintiff’s Ex Husband in the Litigation, the relevance of the timing of when the Defendant knew of the filing of the petition matters perhaps less.

92.  Miguel has unfortunately been caught into this cross fire and has tried his best to ‘mediate’ it. It would appear from his own evidence that although he is aware of some of the dealings or arrangements between the Plaintiff and the Defendant, he might not be completely ‘au fait’ with all the arrangements between the ‘grown ups’, as he was really there to show moral support and company.  He accepted on occasions at those lunches he would let the parties talk and play and focus on his phone.

93.  From his own evidence it is apparent he would not have been in a position to be aware of the ‘whole truth’ but would have remembered parts of it which would have been comparatively more memorable.

94.  The only passage which is strictly speaking relevant to the Transfer in Miguel’s witness statement is at paragraph 13 where he stated that:

“On 9^th July 2009, the plaintiff invited the defendant and I to yum cha in Tsim Sha Tsui. Afterwards, the plaintiff suddenly took us to the Prudential Brokerage Limited. The plaintiff and the defendant signed many documents in order to transfer the stocks held by the plaintiff to the defendant. After signing the documents, the plaintiff was very happy. She walked near me and linked her arm with mine and said loudly “It is so good for your mommy to have a few million more” (你媽咪就好啦，身家咁就多左幾百萬) I remember this sentence clearly, because the plaintiff’s voice was so loud that everyone there would hear that and that made me extremely embarrassed. Afterwards, the defendant said that if she could not take care of the plaintiff by herself in the future, I would have to take care of the plaintiff. I did not really pay attention to their dialogue and thus I answered in the affirmative with a smile out of politeness.”

95.  For reasons further set out below, I accept Miguel’s evidence on this point. That statement is also consistent with the inherent probabilities of the Plaintiff having made a gift as further explained below. I do not however consider it to be of much weight for the reasons set out in the paragraphs below.

96.  While at first blush it might be said to support the Defendant’s case by reference to the Plaintiff saying to the Defendant that she was lucky in having a few millions more in terms of her wealth, the Plaintiff would not necessarily have told Miguel about any trust arrangement even if there was one as per the Plaintiff’s case.

97.  Moreover, Miguel had accepted that his mother had said at that time that if she herself became incapable of looking after the Plaintiff, then he should.

98.  This could be said to be at least consistent with the Plaintiff’s case i.e. that the purpose of the Transfer is that it would ensure she would be looked after and that there was money for this purpose.

99.  This evidence would also be consistent with the possibility that the Plaintiff made an outright gift to the Defendant partly out of friendship and appreciation and partly so that if she needed looking after one day there would be less of a financial burden on the Defendant which as the ‘oldest sister’ she would not want to impose.

100.  I have borne in mind the concluding paragraph of Miguel’s witness statement. While it states that the Transfer was a gift and the Shares were not held as a trust this is no more than stating a legal conclusion without any further underlying facts. This paragraph by itself carries no independent weight.

101.  Apart from what Miguel says at paragraph 13 of his statement, it would be likely that he would have heard about the 2009 arrangements much later from his mother which he would naturally be inclined to trust and thus this would also likely colour his perception of what had happened years earlier.

102.  His evidence thus does not really add much to the Defendant’s case on what really happened in terms of the intention of the Plaintiff behind the Transfer as opposed to the outwards appearance of the Transfer which conceptually could be consistent with either a gift or trust.

103.  While his memory might be affected for the reasons set out above I did not detect a conscious decision on his part to jump into the fray rather he plainly wants to stay out of it as much as he can.

Inherent probabilities

104.  As a preliminary point, I note that there is no document evidencing the intention to either make a gift or that there should be a trust.

105.  From a common sense perspective, it might be said that it would have been easy for the Plaintiff to ask the Defendant to sign a very short document either prepared by the matrimonial firm she was using at that time or even a homemade one.

106.  Although the Plaintiff is not a professional or highly educated, it is clear to the Court that her mind is even as of today and at her age alert and sharp.

107.  Given that this Transfer was the Plaintiff’s idea it would have not been hard for her to do so. It need not have been called a trust as this is a legal concept which would not necessarily have been known to the Plaintiff as such.  It could have been for example a document simply recording that the Defendant is holding or ‘keeping’ these Shares for the Plaintiff.

108.  In this respect I accept the Plaintiff’s submission[10] that the Court should be looking for evidence consistent with either the intention of creating a trust or an outright gift and not whether the parties themselves realized that as a matter of law they were creating a trust or whether they had used that language (see Lee Sai Nam v Lee Shu Chung, unrep, HCA 1711/2009, 9^th December 2015).

109.  If it was intended that the Defendant should ‘keep’ the Shares understanding these were kept for or on behalf of the Plaintiff and should be returned upon the Plaintiff’s instructions together with any dividends, that would be sufficient.  

110.  I also bear in mind that it could also be said that the Defendant could have asked for a document to be produced confirming it was a gift but common sense suggests that would be both unusual and embarrassing. I think at that time the Plaintiff (on either party’s case) loved and trusted the Defendant and thus one “[doesn’t] have to make so many calculations”.

111.  Notwithstanding the above, I accept that in ‘non-commercial’ settings, one should not assume that parties would usually reduce agreements into writing and therefore it would be unrealistic to expect written records of assurances. Hence the lack of any such record could not be said to be a strong pointer in this type of circumstances.

112.  Although the Plaintiff at some stage said that she was to some extent ‘on guard’ and “only trusted [D] for a half” this is in reality an expression of hindsight having regard to what has since happened. I do not regard this as an indicium of the unreliability of the Plaintiff’s evidence by reason of a sinister motive, rather I think this exemplifies the unreliability of memory for the reasons set out above where the passage of time has corrupted the memory unwittingly.

113.  It is obvious that the Plaintiff fully trusted the Defendant, because in the absence of any documentary evidence, if the Plaintiff had suffered a stroke who would be able to prove that there was a trust and who would be able to sue on her behalf? The arrangement even on the Plaintiff’s case is consistent with trust.

114.  As a matter of inherent probabilities and without having resort to any presumptions of advancement (which are inapplicable since the Defendant is not the Plaintiff’s sister by blood), the fact is that their relationship was as close as two sisters and this was a relationship which had existed over half a century and became even closer as a result of both the Plaintiff and the Defendant suffering from divorce and grief respectively.  This is not a case of X transferring an asset to Y for no consideration when X and Y are strangers.

115.  The Plaintiff’s affection extended to Miguel and this is apparent in those WhatsApp messages the Plaintiff was sending him in 2015 even as she was berating the Defendant’s mother for not returning the Shares. A careful reading from those messages in fact demonstrates that the Plaintiff was still at that stage somewhat hoping for a reconciliation.

116.  I have also considered that there was a pattern of giving presents and doting in that relationship in the sense that it was perhaps one way in which the Plaintiff was accustomed to expressing her love and affection for the Defendant as she had done in the past.

117.  I accept Mr Pang’s submissions that the valuable presents were mostly given in the earlier days when the Defendant was much less well off than in 2009 and the value of those presents (diamond watches, fur coat etc) albeit very valuable was worth considerably less than the Shares in issue. The Defendant under cross examination accepted Mr Pang’s suggestion that she had hitherto never received any gifts or presents of such a magnitude.

118.  However, this is tempered by the fact that by 2009 the Plaintiff would have accumulated in excess of HK$120M as found by the Family Court and as disclosed by the Plaintiff, and so the value of the Shares[11][12] would not represent a big percentage of her wealth at that time. As a matter of inherent probability the more one gives away as a percentage of one’s wealth the more this would in the ordinary course call for an explanation.  

119.  More to the point, given her age by then and the fact her Ex Husband had left her and that her only daughter was estranged there was no real incentive to keep so much money when there were no other obvious recipients worthy of her generosity; and on the other hand the Defendant  and Miguel were there for her when she most needed support and company, giving the Shares is not particularly improbable and on the contrary seems quite probable given this would have been done at that particular moment and to that particular person.

120.  I also accept that on the balance of the probabilities the Plaintiff  had suggested at the time of the Transfer to the Defendant[13] that it was better to benefit the Defendant rather than the Plaintiff’s Ex Husband. This is consistent with the inherent probabilities set out above.

121.  The Defendant stated that the Plaintiff had also said that “she hoped that Miguel and I would take care of her when she becomes old or sick”.

122.  This is consistent with the possibility that while the Shares were gifted to the Defendant as an outright gift there was a very strong moral expectation that having received these Shares, the Plaintiff would do so since there would be no question of imposing a financial burden on the Defendant’s shoulders.

123.  Mr Pang correctly points out that as a matter of law a gift to the Defendant could not be at the Ex Husband’s expenses since the Family Court would take this ‘gift’ into account against the Plaintiff[14] when determining the amount of money the Ex Husband should be entitled to and hence it would not be a case of ‘benefiting’ the Defendant rather than the Ex Husband.

124.  However, there is no suggestion that the Plaintiff had sought legal advice on this point before making that decision.

125.  In addition, this may simply be a kind and delicate way for the Plaintiff to get the Defendant accept her generosity so that she wouldn’t feel embarrassed or uncomfortable about receiving such a significant present (from the Defendant’s perspective). This has happened a long time ago and the reasons for such an impromptu statement would unlikely be remembered in particular when the relationship has since deteriorated so much.

126.  I bear in mind that the value of the Shares, although valued in the millions, would only represent a relatively modest percentage of the Plaintiff’s overall wealth.

127.  I note that as pointed out above, she now only has one daughter with whom she is estranged and no other immediate relatives, and also given her age, the success or otherwise of this litigation would not be of great significance to her. I do not consider that the Plaintiff is really motivated by the money in pursuing the present proceedings. She in fact suggested that she would bequeath her wealth to charity.

128.  The Defendant is apparently less wealthy than the Plaintiff but nevertheless quite well off. Although the amount which the Shares and their dividends represent is comparatively more important to her, I also do not detect that this is the primary reason why she would be resisting this claim.

129.  I note that the Plaintiff’s explanation for what prompted the Transfer was that one Mr Liu who had been a friend and neighbour of the same age as the Plaintiff had a stroke in February 2007 and thus lost self care ability overnight. Mr Liu was in his mid 70s and this, the Plaintiff says, made her worried about her own state of health and also wonder what would happen to her if she lost her ability to look after herself. The Plaintiff explained that in May to June 2009 she met with the Defendant on many several occasions and that as a result she arrived at the agreement as set out in paragraph 16 above.

130.  Mr Kwan has referred to the 2.5 year gap between Mr Liu’s stroke and the Transfer and has thus submitted that this is unlikely to be the impetus behind the Plaintiff’s so called trust arrangement which is after all the ‘genesis’ (Mr Kwan’s words) of the Transfer on the Plaintiff’s case. I think there is some force in this submission although by itself I do not consider this to be a strong pointer.

131.  I accept that the Plaintiff may well have been influenced in her decision to make the Transfer by what had happened to Mr Liu. By 2009 she was understandably concerned that should she suffer a stroke she would be in great difficulty, without having anyone to look after her.

132.  This however does not lead to the inference that she would need to set up a trust or enter into a trust arrangement as she now describes it. By then the Defendant was one of the few persons she could trust with that burden.

133.  The Plaintiff’s submission is that it would make no sense for the Plaintiff to make a gift to the Defendant in the mere hope that the Defendant would take care of her if anything happened.

134.  This submission would of course have much force if the parties were strangers. They have now become strangers but at the time they were the closest to each other in the world.

135.  The Plaintiff would have expected the Defendant to do so irrespective of any gift. The Plaintiff had after all doted over the Defendant practically for her entire life. However, the Plaintiff has proved to be a conservative, generous and traditional person. It is unlikely she would have wanted to put that burden on the Defendant’s shoulder. Thus on top of making a gift to her closest relative (of a magnitude she could easily afford) it would also mean that the Defendant would be more likely to do so.

Other Documents

136.  Mr Kwan further pointed out that no proper explanation has been provided as to why there is no documentary evidence which is suggestive of any trust until 2015.  

137.  I note that apart from one payment which can be clearly linked to a payment of dividends (which is dealt with below) the Plaintiff is unable to produce any report of dividends received by the Defendant on her behalf, payments being made into a segregated account.

138.  I understand that the Plaintiff’s explanation is that she didn’t “need” the dividends and thus did not chase/seek payment of dividends but the total lack of indicia probative of a trust arrangement is one factor to consider.

139.  The Form E was sworn closely to the date of the Transfer. It clearly states which shares are beneficially owned by the Plaintiff and yet does not mention the Shares. Given that the Plaintiff was aware of the purpose of the Form E, that she was receiving legal advice and the close proximity in terms of timing between the Transfer and the Form E, I consider that notwithstanding her explanations to the contrary and giving allowance for the fact she would have been distraught by the divorce at that time, it is inherently unlikely she would have forgotten about that Transfer[15]. It is not her case that she consciously hid these Shares from her Ex Husband at that time and in any event that claim if it had been made would be a finding which would entail very serious consequences[16].

140.  The contents of the Form E are thus more consistent with the inherent probabilities pointing to a gift and that the Plaintiff did not consider she owned the Shares as at August 2009.[17]

141.  This is in my view and in this context one fairly strong indicator of her state of mind and intention at that time. Of course, there may be other indicia pointing away from this conclusion and thus all the evidence has to be weighed in the round.

Dividends?

142.  In terms of documents, the Plaintiff relied on the payment in October 2010 of a sum which exactly amounted to the sums added up of two dividends payable which are attributable to the Shares.

143.  This is clearly one indicator militating in support of the Plaintiff’s case. In the Defendant’s pleaded defence (at paragraph 7) this was referred to as a ‘loan’ although it was pleaded that “though [P] had asked for the above payments from [D] as loans, [P] has never repaid [D] for such sums, nor had [D] requested for repayment”.

144.  At paragraphs 23-26 of her witness statement the Defendant expands on this and says that the Plaintiff had asked her “to lend money to her for four times”.

145.  On this issue I reject the Defendant’s evidence[18] that the HK$78,897 was a loan (whether it was sought as a loan by the Plaintiff or provided as one by the Defendant). Given the Plaintiff’s means, the fact that the Defendant had received on the Defendant’s case a HK$7M gift the year before, the surrounding circumstances are such that this is inherently improbable.

146.  The HK$78,897 is plainly attributable to the payment of dividends made pursuant to the Shares. As Mr Pang submitted this was a very odd figure which could only be attributable to the two dividend payments added together and the figure is thus “unexplained and inexplicable”.

147.  While I do not accept the Defendant’s evidence on this point, it is not possible to find whether this was due to a one off arrangement or whether it was due to a strong moral obligation either before or after the Transfer to pay dividends.

148.  Although this is to some extent the high point of the Plaintiff’s case, one has to look at this not just together with all the relevant admissible evidence but also one has to consider that there is no real explanation emanating from the Plaintiff as to why there would just be that one payment when there were many more dividends either before or after.  A table of dividends post Transfer (“the Table”) has been helpfully produced by the parties. While there are some comparatively minor disagreements on some figures these do not matter for the present analysis and I append the Table to this judgment.

149.  It seems to me that one or even two (assuming in her favour the other drawn cheque was also attributable to dividend payments) payments attributable to dividends paid under the Shares do not suffice to evidence a trust arrangement.

150.  The Table demonstrates that there is no pattern of payments of dividends arising from the Shares before 2015 nor is there any documentary evidence of a single demand before then. Had there been a pattern of payments this would obviously have been weighty evidence probative of a trust arrangement.

151.  Even on the Plaintiff’s case as explained at paragraphs 35-38 of her witness statement, it was the Defendant who would have showed the cheque of HK$78,898 and told her it was the dividend from the Shares. The Plaintiff does not really account for the lack of reporting or payment save that “with stable rental income, I had no financial difficulty in my daily life and my health deteriorated afterwards, so I did not particularly make any inquiries with [D] about the dividends”.

152.  Of course I appreciate that the relationship was one which was informal and close but nevertheless the lack of any such pattern makes the Plaintiff’s claim less inherently probable.

Other contradictions?

153.  I note that in the pre-action letter dated 22^nd November 2016 when the Plaintiff’s then solicitors set out what they called the “Trust Agreement” a number of particulars were provided and in particular it was claimed that “it was also expressly agreed by the parties that whenever dividends were paid on the Shares you would pay the same to our client...” which suggests it’s a pay when paid arrangement. This is not entirely consistent with the way in which the Plaintiff explains the agreement now in her witness statement i.e. there is no suggestion that whenever a dividend was paid it ought to be paid to the Plaintiff immediately or shortly thereafter. This reflects the difficulty in trying to exactly remember what was agreed and/or intended so long ago and also of the fact that the parties are trying to on an ex post facto basis reconstitute in clear legal concepts what had been perhaps a mixture of hope and expectations rather than of a legally binding promise.

Other matters

154.  I do not consider that the ‘threats’ or warnings the Plaintiff made in the WhatsApp messages to be probative of either party’s case. In any event the colloquial expressions used therein and the context in which these were made are more akin to ‘cursing’ in the popular sense of the word (i.e. expressing anger) rather than a genuine threat. This evidences the Plaintiff’s own sense of entitlement to the Shares and being ‘wronged’.

155.  I note that neither Patrick nor Mr Sit has provided any evidence in these proceedings.

156.  Patrick has unfortunately passed away by the time of this trial but could have given evidence in the form of witness statements which he hasn’t at the time there was an exchange of witness statements.

157.  Both in the witness statements and even as hinted in the WhatsApp messages from the Plaintiff, there is an insinuation that Mr Sit would have been aware as to the arrangements surrounding the Transfer.  Yet the Plaintiff did not call Mr Sit[19]. I agree that the fact that Mr Sit was not asked to be a witness in these circumstances would normally call for the drawing of an adverse inference[20].

158.  However, I bear in mind that the Plaintiff may have overstated the position previously in suggesting Mr Sit “[was] present as witness and [was] well aware that the transfer was not a gift in nature”. 

159.  My reading of the Plaintiff’s witness statements read in their totality was that while he is said to be a witness to the Transfer and that it is implied that he would know about the true nature of the Transfer, there is in fact no direct statement explaining why he is said to have acquired that knowledge on the key point here i.e. not the fact there has been a transfer of shares but what the real intention was behind that Transfer.

160.  I also note the Plaintiff’s explanation that she would not want to ‘embroil’ Mr Sit (an outsider as the Plaintiff described him) in this saga and she is obviously close to and protective of him.

161.  All in all, the fact Mr Sit was not called is obviously not helpful to the Plaintiff’s case but I did not find it necessary to place any reliance on the fact he was not called for the purpose of my findings of facts on the Plaintiff’s intention in mid 2009 and thus the true nature of the Transfer.

162.  The Defendant submits that there is an inconsistency in the Plaintiff’s case in terms of who kept the share certificates[21]. What I understand to be the Plaintiff’s position is that as the Shares were ‘kept’ by Patrick there was a sense of security on her part as opposed to the Shares being moved to another broker who she doesn’t know and would thus move entirely under the Defendant’s control.

163.  The relevance is that if the Shares are totally under the Defendant’s control say with her own broker then this would more likely point to an outright gift whereas if the physical custody of the Shares is kept by the Plaintiff or Patrick then it would be more likely that there was a trust arrangement.

164.  I consider this to be a relatively weak pointer. Unless the Defendant wanted to actively do something with the Shares it would be relatively of less moment to her as to where and how they are kept since these were after all (on her case) a gift. The same goes for why she wouldn’t have taken any immediate action after the Plaintiff taking away the certificates for example by making arrangements for issuing replacement share certificates.

165.  I note that while both the Plaintiff[22] and the Defendant[23] suggest that Patrick could have buttressed their case, neither has apparently obtained evidence from him prior to his passing.  The Court is unable to give any weight to what is allegedly attributed by the protagonists to him in the absence of a statement from him.

166.  The practical arrangement in this case over how the Shares were kept seems to me to be not probative of either party’s case. It is possibly consistent with either party’s case but this would not assist in assessing which party’s version is more likely.

167.  I fully appreciate Mr Pang’s point[24] that leaving the Shares ‘with’ Patrick is consistent with a measure of protection for the Plaintiff if indeed there was a trust arrangement so it would make it more complicated if the Defendant wanted to sell them. The fact it is consistent with the Plaintiff’s case doesn’t mean this is probative of her case. As explained above, if the Plaintiff didn’t entirely trust the Defendant in mid 2009 she could easily have asked her to write a one line document even if homemade. On the other hand, if having regard to the family like relationship between the Plaintiff and the Defendant at the time and they trusted each other, such a weak form of ‘ring fencing’ would not have been necessary.

168.  I should also refer to the incident whereby the Plaintiff ‘took away’ share certificates. This is to some extent supportive of the fact perhaps that at least Patrick must have thought that the Plaintiff was entitled or allowed or permitted to ‘deal’ with them. Mr Pang submits it is odd why there would not have been any complaints on the Defendant’s part against Patrick nor was there any apology on Patrick’s part[25].

169.  I agree that this is to some extent odd, but it only shows that Patrick believed perhaps that the Plaintiff was allowed or permitted to deal with the Shares. This does not show that Patrick necessarily knew or had reasons to know that the Plaintiff beneficially owned them.  All in all, I accept that in principle this is a weak pointer or factor supporting to a limited extent the Plaintiff’s case. However, given that Patrick was not asked to give evidence while he was alive it is not possible to give much more weight to the somewhat cryptic and short WhatsApp messages[26]. I am thus unable to place much weight on this factor.

Conclusion

170.  Bearing in mind the above, and weighing the various factors pointing in both directions I conclude that notwithstanding the misgivings I have about parts of the Defendant’s evidence (which I have set out above) the Defendant has discharged her burden of proving that as at mid 2009 the Transfer was made as an outright gift and intended to be as such.

171.  I find that the Shares are and have always been legally and beneficially owned by the Defendant since they were transferred to her and that there was no consensus or agreement as alleged by the Plaintiff as set out in paragraph 16 above. The Plaintiff does not own the Shares either by reason of an express trust nor any other form of trust. For the avoidance of doubt, there can be no express trust nor any resulting trust[27] nor any other form of trust given my findings that the Defendant has established the Plaintiff intended to transfer the Shares as an outright gift.

172.  It is quite possible that at the time of the Transfer, the Plaintiff would have expected the Defendant to look after her should she need it and this would include settling medical expenses should she not be able to do so due to an incapacity. It is also possible that the Plaintiff would have further expected that after all that she had done for the Defendant over her lifetime, that should she ask her to do so, she in all likelihood might well return the Shares even if the Defendant was under no legal obligation to do so. This expectation or moral debt however does not detract from the fact that based on my findings there was an outright gift.

173.  I consider thus that on the evidence before me and on the balance of probabilities the Defendant has proved that the Transfer was an outright gift and that the Shares were thus not held on trust by the Defendant for the Plaintiff.

Disposal and costs on a nisi basis

174.  The Plaintiff’s action is thus dismissed.

175.  In terms of costs, it was agreed that I would deal with this on a nisi basis. Having regard to my findings and observations above, I will make an order nisi that there be no order as to costs in this Action. The Order will become absolute after 28 days. If an application is made by either party, written submissions (no more than 3 pages) should be filed by that party with the responding party given 7 days to file submission in reply (no more than 3 pages). I will then determine the matter on the papers unless I consider it more appropriate to have a hearing. Having regard to all the circumstances and the history leading to these proceedings, the Court hopes this might be unnecessary.

176.  It remains for this Court to express its gratitude to Mr Pang SC and Mr Kwan (and their respective juniors) for their able assistance. Notwithstanding the tensions and emotions between the parties they have conducted the trial with commendable restraint and skill.

Mr Robert Pang SC leading Ms Agnes Kwong, instructed by Ho & Ip, for the Plaintiff

Mr Steven Kwan leading Ms Joyce HY Lee, instructed by Lo, Wong & Tsui, for the Defendant

Table of dividends payable between 30 June 2009 to May 2015