Kwan Shuk Ching v. Wan Mei Yau
Read the full judgment text of HCA 2765/2016 on BabelCite. This High Court CFI judgment was delivered on 30 December 2022.
1. In the present case, Kwan Shuk Ching, the Plaintiff, claims against Wan Mei Yau, the executrix of the estate of Au Chi Cheung (the “Deceased”) and the registered owner of two landed properties, namely, (1) the property situate at Flat No.1115 on 10 th Floor of Block B, I-Feng Mansions, No.237A, To Kwa Wan Road, Kowloon (the “I-Feng Property”) and (2) the property situate at Unit B on 10 th Floor, Fook Shing Industrial Building, No.1A, Yuk Yat Street, Kowloon, Hong Kong together with Car Park
Cited by 2 cases · Cites 2 cases
|
HCA 2765/2016 [2022] HKCFI 3781 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 2765 OF 2016 ________________________
________________________ Before: Mr Recorder William Wong, SC in Court Dates of Hearing: 7-11, 14 November & 23 December 2022 Date of Judgment: 30 December 2022 ________________ JUDGMENT ________________ INTRODUCTION 1.In the present case, Kwan Shuk Ching, the Plaintiff, claims against Wan Mei Yau, the executrix of the estate of Au Chi Cheung (the “Deceased”) and the registered owner of two landed properties, namely, (1) the property situate at Flat No.1115 on 10th Floor of Block B, I-Feng Mansions, No.237A, To Kwa Wan Road, Kowloon (the “I-Feng Property”) and (2) the property situate at Unit B on 10th Floor, Fook Shing Industrial Building, No.1A, Yuk Yat Street, Kowloon, Hong Kong together with Car Park No.2 on the Ground Floor (the “Fook Shing Property”), the full beneficial ownership of both I-Feng Property and Fook Shing Property on the basis of common intention constructive trust, part performance of an oral agreement and proprietary estoppel. 2.The Plaintiff’s case is that in or about 1998, in anticipation of a divorce between her and Au Yeung Ming (“Yeung Ming”), one of the sons of the Deceased, the Deceased and the Plaintiff met for more than 10 times in Gold Gem Restaurant (“the Restaurant”) to discuss (1) whether the marriage between the Plaintiff and Yeung Ming could be saved, and (2) in the event the Plaintiff and Yeung Ming were to be divorced, how and in whose hands the Plaintiff’s children are to be placed and looked after. The Plaintiff pleads that after rounds of discussions and negotiations, in or about 1998, the Plaintiff and the Deceased entered into an oral agreement on the following terms (“the 1998 Oral Agreement”):
3.It is also the Plaintiff’s pleaded case that on or about 2 February 2001, on the 10th day of the first lunar month in the year, the Deceased called a family meeting in Hong Kong and made various representations (the “2001 Representations”), namely:
4.The Plaintiff pleads that she has dutifully performed her part of the 1998 Oral Agreement and as such a common intention constructive trust arises which vests her with full beneficial ownership of the two landed properties (see §§48-55 of the Statement of Claim). Alternatively, in reliance of the 2001 Representations and the 1998 Oral Agreement, she had incurred various expenses on the two landed properties. As such it would be unconscionable for the Deceased and hence the Defendant as the Deceased’s successor in title and the devisee of the landed properties to deny the Plaintiff’s beneficial entitlement to the two landed properties (see §§56-58 of the Statement of Claim.) 5.The Defendant denies the existence of the 1998 Oral Agreement and the 2001 Representations. It is pleaded by the Defendant that after Yeung Ming moved to the USA, the Deceased permitted the Plaintiff to use and/or occupy the Fook Shing Property and the I-Feng Property as a bare licensee which is revocable at any time. To the best of the Defendant’s understanding, the Deceased was not inclined to revoke the licence before the children of the Plaintiff and Yeung Ming have grown up. As the youngest of the Plaintiff’s children, Ling Hon, was born in 1997, he would have turned 18 by 7 August 2015 and the bare licence would have expired by then. In any event, upon the death of the Deceased on 23 April 2011, the said bare licence was automatically revoked. (See §§14 and 19 of the Amended Defence and Counterclaim). 6.Hence, the central dispute, as Mr Fan for the Plaintiff submitted, turns on the narrow issue of whether the 1998 Oral Agreement and/or the 2001 Representations existed or not. To this, there is no dispute that the Plaintiff carries the burden of proof. AGREED FACTS 7.The parties agree on the following undisputed facts:
APPROACH TO EVALUATION OF EVIDENCE 8.This case turns essentially on the Court’s assessment of the credibility of the Plaintiff’s case. The Plaintiff mainly relies on her oral evidence. The fact that she physically occupied and is still occupying the two landed properties is both consistent with her version of facts and the Defendant’s version of a bare licence granted by the Deceased. 9.Lord Bingham in his book The Business of Judging at pp 5 – 6 insightfully said:
10.In Lee Fu Wing v Yan Paul Po Ting [2009] 5 HKLRD 513, Deputy High Court Judge Au (as he then was) at 524 helpfully set out the well-established approach as to assessment of witnesses:
11.In Lam Rogerio Sou Fung v Tan Soon Gin George HCA2576/2005, unreported, 5 May 2011, Chu J at §§40-41 said:
12.I find the above guidelines helpful and will apply the same in assessing the credibility of the parties’ diametrically different versions of events. 13.In this case, I also bear in mind that the Deceased is not able to give any evidence to rebut the Plaintiff’s account of the 1998 Oral Agreement. (See Cheung Ping Sum v Wong Chi Hang [2019] HKCFI at §§5-6 per Deputy High Court Judge To.) THE PLAINTIFF’S CASE 14.Mr Fan for the Plaintiff submitted that the evidence as unfolded reveals that the Deceased had all along been stringing the Plaintiff all along. This is despite the fact that the Plaintiff gave evidence that the Deceased treated her very well. As such there were mutual trust between her and the Deceased. Her case is that when she and Yeung Ming divorced, the Deceased promised to gift the two landed properties to her, in order to prevent her from going after Yeung Ming for maintenance, and to make sure that she would take care of his grandchildren. Over the years, the Deceased had reiterated such promise, by the 2001 Representations, and when the 2004 tenancy agreement (“2004 Tenancy Agreement”) was signed, so that the Plaintiff would continue to abide by the terms of the 1998 Oral Agreement. The Deceased also continued to treat her as a member of the family, and treated her very well, so that she would let her guard off and trust him whole-heartedly. As a result, the Plaintiff being unsophisticated and naïve, believed in the Deceased’s promises. She did not claim maintenance from Yeung Ming and bore the sole responsibility of supporting her children financially, foregoing other opportunities in life. 15.It is the Plaintiff’s case that the 1998 Oral Agreement was entered into between the Deceased and her, in the following circumstances:
16.When disagreements between Yeung Ming and herself arose due to the former’s investment losses, the Deceased met with her a dozen times to dissuade her from divorcing Yeung Ming. She did not ask for money from the Deceased, and instead opted for public assistance. After she filed the divorce petition, the Deceased changed to discussing with her how to deal with the children and their livelihoods. Although Yeung Ming did not have money at the time, she knew that the Deceased would step in to pay for ancillary relief for her and her children. In particular, the Deceased did not want any ugly divorce proceedings to play out between Yeung Ming and herself, and did not want her to claim against Yeung Ming for ancillary relief. 17.Under such circumstances, she and the Deceased reached the 1998 Oral Agreement. She said that she did not ask the Deceased to assign the two landed properties to her immediately as she believed the Deceased was a person with moral integrity. In hindsight, she now believes that the Deceased had been stringing her along to prevent her from claiming against Yeung Ming for ancillary relief, and so that she expended her full time and effort to take care of her children. 18.The fact that the divorce order provided that she would only receive nominal periodical payments at the rate of HK$1 per annum for her maintenance and for the 3 children makes it more probable than not that the 1998 Oral Agreement had been reached between her and the Deceased. But for the 1998 Oral Agreement, there is no reasonable explanation as to why she would have chosen to forgo her claims for ancillary relief against Yeung Ming, when she knew that the Deceased had deep pockets and would be aiding Yeung Ming in any potential maintenance payments. 19.Further, given the undisputed facts that the Deceased had arranged many aspects of Yeung Ming’s life, for example, arranging Yeung Ming to come to Hong Kong, gifting Yeung Ming the USA Property, arranging for their children to live in the USA Property, arranging for Yeung Ming to be the director of Yuen Bong Trading Company Limited (“Yuen Bong”), it was inherently probable for the Deceased to enter into the 1998 Oral Agreement with her and intervened in their divorce proceedings to protect Yeung Ming from the ancillary relief proceedings , especially in light of Yeung Ming’s investment losses and Yeung Ming’s unilateral withdrawal of HK$200,000 from the joint account. 20.In any event, as to the timing of when she acquired the beneficial ownership of the two landed properties, it is her case that under the 1998 Oral Agreement, she would be entitled to the beneficial ownership of the two landed properties upon entering into the 1998 Oral Agreement, and in any event upon the demise of the Deceased. 21.In other words, the Deceased would be taken to be in breach of the 1998 Oral Agreement if he eventually failed to devise the two landed properties to her by his last valid will upon his death. 22.Further, the 2001 Representations were made in the family meeting in 2001 (“the 2001 Family Meeting”) held on 2 February 2001, the Deceased’s birthday, in Star Court at noon. 23.That the 2001 Representations were made in the 2001 Family Meeting is corroborated by Vannie Gao, an independent witness. Vannie Gao has nothing to gain from these proceedings, and no motive to lie. As far as the Defendant’s insinuation that Vannie Gao has come forward to testify that the 2001 Representations were made because of her alleged animosity towards Arthur due to an alleged loan of US$400,000 between Hon Ming and Arthur, Vannie Gao has indicated clearly in her testimony that her past divorce has nothing to do with the present proceedings, as they have been settled in 2017, and she has moved on. 24.Further, it is also submitted that Vannie Gao has also indicated that she had made claims against the properties that Hon Ming was entitled to pursuant to the 2001 Representations (which she subsequently gave up in the settlement in 2017), further increasing the probability that the 2001 Representations were made. 25.Moreover, the reason that she did not specifically make reference to the time and location of the 2001 Family Meeting, was because the Defendant had only substantially elaborated on the issue of the time and location of the 2001 Family Meeting in the last round of evidence, in which the Defendant had the last say to respond to Vannie Gao’s evidence which corroborated the 2001 Meeting. 26.The challenge against the 2001 Family Meeting was only briefly mentioned in Arthur’s first witness statement at §65 and was characterized as a family gathering. She does not dispute that there was a family gathering at night, and therefore did not consider necessary to adduce evidence to deny the existence of and oppose what happened in the family gathering, and hence was not alerted to the challenge with regards to the time and location of the 2001 Family Meeting. In any event, the time and location of the 2001 Family Meeting is also corroborated by Vannie Gao’s testimony. 27.With respect to the Defendant’s contention that it is inherently improbable for the 2001 Family Meeting to be held at noon as it was held on a Friday, her submissions is that it is reasonably probable for the family members to take time off for the 2001 Family Meeting, since the distribution of family assets was to be announced, and as admitted by Arthur, it was one of rare birthdays in which both he and Yeung Ming flew back from the USA to attend. Further, even Vannie Gao and Hon Ming, and Kit Ming and his wife came back from the PRC to attend the Deceased’s birthday. As mentioned by Vannie Gao, it was the first time she stepped foot in Hong Kong. The very fact that all members of the Au family were present in Hong Kong and attended the Deceased’s birthday simply pointed to that it was a very special birthday occasion if not the most special one. 28.The Defendant has specifically pointed at two property transactions relating to Yui Ming and Tat Ming, which allegedly disproves the existence of the 2001 Family Meeting. However, the land searches provided by the Defendant were adduced by the Defendant herself, and the Plaintiff actually does not even know the actual addresses of the properties gifted to Yui Ming and Tat Ming by the Deceased. 29.The Plaintiff’s submissions are that:-
THE DEFENDANT’S CASE 30.The Defendant’s case is simple and straightforward. She denies the existence of the 1998 Oral Agreement and/or the 2001 Representations. She puts the Plaintiff to strict proof. 31.The Deceased was a self-made man. He was successful in garments manufacturing and trading business. He was an authoritative and highly respected figure amongst his partners and children. This is not in dispute. As such, he managed his three partners and families, his businesses, and his properties. 32.Until his fall in Panyu (番禺) in March 2006, the Deceased was active, healthy, mentally sound and physically independent. After his fall in Panyu in March 2006 (aged 74), the Deceased’s health deteriorated drastically thereafter. 33.The Deceased owned and operated a number of companies:-
34.Arthur in his witness statement supplemented the Defendant’s pleaded understanding that after the grant of a licence to the Plaintiff to use the two landed properties, the Deceased was not inclined to revoke the licence before the children of the Plaintiff and Yeung Ming have grown up, by saying that:
ASSESSMENT AND ANALYSIS 35.I have carefully considered all the evidence, including documentary evidence and all the witnesses’ oral testimony in court. I have also considered the parties’ rounds of detailed written submissions. On balance, I have come to the view that the Plaintiff’s claims should be dismissed as she has failed to discharge the burden of proving the existence of the 1998 Oral Agreement and the 2001 Representations. On the other hand, I find the Defendant’s pleaded understanding and the Informal Understanding sit well with the commencement of possession actions in 2015. 36.In particular, I note that prior to 2015, there was no mention of any 1998 Oral Agreement and/or the 2001 Representations. It was first pleaded in the Statement of Claim in the present action in 2016. This is difficult to fathom as it is common ground that the Plaintiff had knowledge of the HK Will at the latest in 2011. 37.Strangely, when possession actions were commenced in 2015 against the Plaintiff, instead of raising and relying on the 1998 Oral Agreement and the 2001 Representations, the Plaintiff relied on the 2004 Tenancy Agreement as her sole basis to resist such claims. 38.Overall, I find the evidence of Arthur and Yim Ling, on the whole, credible and logical. Despite being cross-examined on various topics, they stood firm. They were simply telling the truth. The Defendant herself knew very little and her evidence is of limited value to this Court. I accept her evidence. 39.On the contrary, I find the Plaintiff’s evidence including her oral testimony in court incredible and inconsistent in a large number of serious and material respects. 40.First, the Plaintiff said that the Deceased gifted the I-Feng Property to her and Yeung Ming as a wedding gift in 1987. If that is true, it would have been quite impossible for the Deceased to gift that property to her again in 1998. There would have been no basis for the Deceased to deal with the I-Feng Property because by then, namely, in 1998, the Deceased would have no locus to deal with a property that had already been gifted away. There is no need for the Deceased to carry out such a redundant act. It is also inexplicable as to why the Plaintiff would accept a gift in 1987 as a part consideration for her giving up her claims for ancillary relief against Yeung Ming. 41.It also makes no sense for the Deceased to gift what was essentially Yeung Ming’s half share of the I-Feng Property to the Plaintiff without Yeung Ming’s knowledge if the property was indeed gifted to them in 1987. 42.Further, the Plaintiff’s case that the I-Feng Property was gifted by the Deceased to her and Yeung Ming is also contradicted by her own statement to the Police in 2013. In her police statement dated 10 October 2013, she stated that:
43.The Plaintiff’s narrative to the Police was that (1) the Deceased gave the I-Feng Property to her alone in 1987; (2) the Deceased intended to but had not yet completed the transfer of title to the Plaintiff, and passed away 2-3 years ago and (3) in 2013, the Plaintiff was then in the middle of processing the transfer of title albeit that she was the sole beneficial owner of the I-Feng Property. 44.The above version does not sit well with the Plaintiff’s version of event in her own witness statement (see §36 of her first witness statement) or her oral testimony in court. It is simply untrue that the Deceased was in the process of transferring the legal title of the I-Feng Property to her. That never happened. She lied in her police statement. 45.I accept Mr Ah-weng’s submission that not only did the Plaintiff tell a different version as to who was gifted the property in 1987 (whether the Plaintiff and Yeung Ming or her alone), the Plaintiff lied about the Deceased wanting to transfer the title to her before death, and the existence of an ongoing transfer procedure. 46.Importantly, in explaining her beneficial ownership in 2013, well after the death of the Deceased, the Plaintiff did not mention the 1998 Oral Agreement which according to her is the basis of her entitlement to the I-Feng Property. 47.I can well understand that the dispute in 2013 did not touch and concern the ownership of the I-Feng Property. As such it might not be necessary to go into the details of the ownership of the property. But it is quite another thing to put in a police statement a version of facts which is inconsistent and contradictory to the 1998 Oral Agreement. 48.Additionally, if it were indeed a wedding gift by the Deceased in 1987, it is inexplicable as to why the legal title of the said property was not transferred to Yeung Ming and the Plaintiff for so many years. This is contrasted by the gift of the USA Property by the Deceased to Yeung Ming in 2003 when he got remarried. Yeung Ming was the legal owner of the USA Property. When being asked on why no legal title of the I-Feng Property was transferred to her and Yeung Ming, the Plaintiff’s answer was that she thought that the Deceased would like to maintain ultimate control and did not totally trust his children. I do not find such explanation credible. The Deceased had no difficulty in passing the legal title of the USA Property to Yeung Ming in 2003. 49.Still further, I accept Arthur’s evidence that the Deceased never had a practice of devising properties to his children as wedding gifts. None of the other members of the Au family had ever been gifted any properties as wedding gifts by the Deceased. He was married in 1999 and Yim Ling was married in 1997. None of them were gifted any properties as a wedding gift. 50.Secondly and importantly, the land searches records for the I-Feng Property showed that from 1987 to 2001, i.e. since around the time or after the Deceased supposedly gifted to the Plaintiff (and/or Yeung Ming) the I-Feng Property as wedding gift, the Deceased pledged repeatedly the I-Feng Property as security for loans for his business. The chargor, namely, the Deceased, was stated as the beneficial owner of the I-Feng Property, in the security documents. 51.The same applies to the Fook Shing Property. Land searches records also show that it was charged by the Deceased in 1997 as beneficial owner. A receipt on discharge of a charge dated 15 August 2001 was registered to show that the charge was paid off. 52.This is inconsistent with the 1998 Oral Agreement and the 2001 Representations. From the records, it appears that, at all material times, the Deceased treated the two landed properties as his own properties. In the course of the trial, when presented with these land searches records, the Plaintiff’s response was that she was not even aware that her properties were mortgaged and/or charged to banks without her knowledge. She concluded, with the benefit of hindsight, the Deceased had deceived her. I do not accept her evidence. I am of the view that there was no motive on the part of the Deceased to deceive the Plaintiff. The legal charges over the two landed properties could easily been found from public records. There was no need for the Deceased to deceive the Plaintiff. I am of the view that, on balance, the public records sit better with the fact that the Deceased had never gifted and/or agreed to devise the two landed properties to the Plaintiff. 53.I also accept Mr Ah-weng’s submission that it is incredible that the Plaintiff would have only found out about the pledges and/or charges recently. She attempted to register the 2004 Tenancy Agreement against the Fook Shing Property. In view of the disputes over the two landed properties and her case that the Decased had been stringing her all along, the Plaintiff’s inaction and silence over the years about the 1998 Oral Agreement is hard to reconcile with its very existence. 54.Thirdly, it is the Plaintiff’s case that there was an additional element to the 1998 Oral Agreement, namely, the Deceased asked her to keep the said oral agreement confidential and she should not inform any members of the Au family about the 1998 Oral Agreement. The Plaintiff said that this is one of the reasons why she did not mention the 1998 Oral Agreement. I find this hard to believe. First, on the Plaintiff’s own case, in February 2001, the Deceased had no difficulty in openly inform all relevant Au family members that he would devise the two landed properties to the Plaintiff. If that is the case, it is difficult to fathom why the Deceased was so keen to keep the 1998 Oral Agreement confidential. Secondly, as a matter of fact, Yeung Ming got remarried in the USA in 2003. Members of the Au family knew about that at the time. There was no point in keeping the 1998 Oral Agreement confidential after 2003. It is inexplicable as to why the Plaintiff and/or the Deceased would still like to keep the 1998 Oral Agreement confidential. In fact, given that the Deceased was still the legal owner of the two landed properties, it is important that the 1998 Oral Agreement be made known to the members of the Au family, either by the Plaintiff and/or the Deceased. I find the Plaintiff’s evidence on this issue not credible. 55.Fourthly and significantly, on 1 May 2004, the Deceased and the Plaintiff signed a tenancy agreement in relation to the Fook Shing Property for a period from 1 May 2004 to 30 April 2045 at a monthly rent of HK$6,000, the 2004 Tenancy Agreement. There is an additional term that the landlord, namely, the Deceased, agreed that the tenant, namely, the Plaintiff, could sub-let the premises to other parties. In my view, this is very damaging to the Plaintiff’s case. If the Fook Shing Property had been gifted or promised to be gifted to the Plaintiff, there is no need for the parties to enter into this 2004 Tenancy Agreement in 2004 when Yeung Ming got remarried in 2003. 56.I have to say that I find the Plaintiff’s story on how the 2004 Tenancy Agreement came about incredible. The Plaintiff accepted that the Deceased was an authoritative figure in the Au family and all his children obeyed his instructions and wishes. Against that background the Plaintiff’s case is that:
57.Mr Fan for the Plaintiff submitted that it is inherently probable for the Plaintiff to have been overwhelmed by Arthur’s questioning, and not having the requisite legal knowledge, agreed to the signing of the 2004 Tenancy Agreement. This is further reinforced by the fact that the 2004 Tenancy Agreement had a long term of 41 years, which on the face of it would give her a right to stay for 41 years from signing, which seemed like a convenient way to settle the matter. It was logical for a lay person like the Plaintiff to never even think about asking the Deceased for a copy of the 2001 Will. She was told that the 2001 Will was placed at a solicitor’s firm, and she believed that it could not be taken out until the Deceased’s death. 58.Mr Fan further submitted that objectively speaking, these events reflect that the Deceased was deliberately misleading the Plaintiff by asking her to sign the 2004 Tenancy Agreement to protect her interests which led her to believe that the 2001 Will existed, and that she was to have an interest in the two landed properties after his death, so she would continue to abide by the 1998 Oral Agreement. 59.I have no difficult in rejecting the Plaintiff’s case on this issue. I find it quite incredible that having entered into the 1998 Oral Agreement and having made the 2001 Representations, the Deceased would go against his own wishes and words to his family members, by entering into the 2004 Tenancy Agreement qua landlord. Both the Deceased and the Plaintiff were in the garment trading business. The existence of the 2004 Tenancy Agreement defeats the 1998 Oral Agreement and the 2001 Representations. This contemporaneous document evidences that the Plaintiff in 2004 was not the beneficial owner of the Fook Shing Property. It is as simple as that. I find it hard to believe that the Plaintiff did not appreciate this point at the material time. 60.I also find it incredible that if this 2004 Tenancy Agreement were only meant to be a formality as contended, there was a need to insert an additional sub-letting clause and many standard clauses were in fact deleted. It appears to me that the terms of the 2004 Tenancy Agreement were carefully designed to give the Plaintiff the right to occupy and sub-let the Fook Shing Property until 2045, and the Plaintiff would not have to pay for any damage to the premises to the Deceased, as long as the Plaintiff paid the utilities (Clause 10). 61.Further, I do not find the Plaintiff’s explanation that Arthur suddenly became assertive in 2004 to such an extent that the Deceased would rather enter into the 2004 Tenancy Agreement, a sham document (according to the Plaintiff), instead of telling Arthur and other family members about the 1998 Oral Agreement credible at all. This sudden weakness of the Deceased vis-à-vis Arthur is inexplicable and unreal. In 2004, the Deceased had no difficulty in scolding Arthur. Yet, he had to create a sham document to cover up the 1998 Oral Agreement. This is when the Plaintiff’s divorce was a known fact to the Au family members. 62.I am of the clear view that after Yeung Ming’s remarriage in 2003, the Plaintiff obtained the 2004 Tenancy Agreement in order to protect her own interest qua tenant to which the Deceased agreed. This defeats the Plaintiff’s case of the 1998 Oral Agreement and the 2001 Representations. 63.I also find it hard to believe that if Madam Lau had any complaints about her entitlements, she would not have taken up the same directly with the Deceased. At the end of the day, it was Madam Lau and the Deceased who founded the family business and it is common ground that the Deceased respected Madam Lau and they had an intimate relationship. She had credibility and gravitas as a founding member of Lana (the Plaintiff agreed under cross-examination that she “打江山” with the Deceased). 64.Further, the 2004 Tenancy Agreement was supposedly made for the purpose of dealing with Arthur’s challenge, yet on the Plaintiff’s admission, Arthur did not pursue his challenge at all, and the Plaintiff never showed him the 2004 Tenancy Agreement, or any other members of Au Family until the WeChat message on 7 November 2015. 65.Importantly, in the WeChat message sent on 7 November 2015, the Plaintiff, for the first time, asserted her right to use the two landed properties qua tenant. She did that by sending the 2004 Tenancy Agreement to Yim Ling. By the terms of the 2004 Tenancy Agreement and her WeChat message that followed, she asserted that she was a tenant of the Fook Shing Property:
66.Indeed, if the Plaintiff’s case is to be believed, there is no need to suggest that she would return the two landed properties to the Defendant in 29 years’ time. 67.The Plaintiff puts the blame on her then lawyer, Mr Tam Yat Ming (“Mr Tam”) for failing to advise her that she could put forward the 1998 Oral Agreement and the 2001 Representations as the grounds for resisting the Defendant’s claim for possession. Her evidence is that she had told Mr Tam about the details of the 1998 Oral Agreement and the 2001 Representations but Mr Tam advised her that she could only rely on the 2004 Tenancy Agreement to assert her rights. I find that hard to believe. The existence of the 1998 Oral Agreement and the 2001 Representations is a matter of fact. If indeed, pursuant to such agreement and representations, on the Plaintiff’s case, she had given up her rights and opportunities, her first reaction would have been to assert her rights under the 1998 Oral Agreement and the 2001 Representations. Hence, I find the Plaintiff’s evidence on how the 2004 Tenancy Agreement came about incredible. 68.Fifthly, on 8 March 2016, the Plaintiff further sent an explanatory note to Yim Ling (the “Explanatory Note”). In the Explanatory Note, the Plaintiff set out the detailed situation of the Fook Shing Property for Yim Ling’s information. Clause 1 of the Explanatory Note states that the Plaintiff paid rent to the Deceased: “從2004年至2016年，關要付給區志祥租金 $6,000 HKD/ 月, $72,000 HKD/年, 共要付864,000 HKD”. 69.It is common ground that the Plaintiff in fact did not pay any rent to the Deceased. This shows that the Plaintiff lied in this Explanatory Note as well. This affects the credibility of her case. It appears that she was willing to lie in order to make good her claims. It is also the Plaintiff’s evidence that when Yim Ling asked her for proof of her entitlement to the two landed properties, she did tell Yim Ling she had title transfer documents in her hands when she did not have the same at all. What she ultimately sent to Yim Ling was the 2004 Tenancy Agreement. She did not at the time, well after the Deceased died in 2011, tell Yim Ling or indeed any member of the Au family, the existence of the 1998 Oral Agreement and the 2001 Representations. If such agreement and representations indeed existed and the Plaintiff relied upon the same to her detriment, her immediate reaction would have been to assert her rights pursuant to such agreement and representations forthwith. Instead, she chose to rely on the 2004 Tenancy Agreement. On balance, I am of the view that the 1998 Oral Agreement and the 2001 Representations are an afterthought by the Plaintiff to resist the Defendant’s claims for possession of the two landed properties. 70.It is pertinent to note that as late as March 2016, the Plaintiff was claiming a sum of HK$13,624,822.50 as compensation for an early possession of the Fook Shing Property on the basis that she would suffer a loss by giving up her rights for the remaining 30 odd years under the 2004 Tenancy Agreement. This, in my view, defeats the existence of the 1998 Oral Agreement and the 2001 Representations. She was then asserting her right as a tenant rather than as a beneficial owner of the Fook Shing Property and using her rights as a tenant to calculate her entitlements. 71.In the Plaintiff’s Opening Submissions, Mr Fan for the Plaintiff raised an issue on the admissibility of evidence relating to the negotiations between the Plaintiff and the Defendant. It was submitted that such evidence is subject to legal professional privilege. However, I note that in fact the Plaintiff responded and addressed in details her negotiations with Yim Ling in her own witness statement. Mr Fan for the Plaintiff also confirmed to this Court that the Plaintiff was not asking for such evidence to be excluded or expunged from the court file. When Mr Ah-weng cross-examined the Plaintiff on such negotiations, Mr Fan did not raise any objections. In such circumstances, even if there were any legal professional privilege attached to such negotiations, the same would have been waived by the Plaintiff’s conduct in this trial. I also note that in the Plaintiff’s closing submissions, Mr Fan fairly accepts that the negotiations in 2015 are not legally privileged. 72.Sixthly, I find that as a matter of fact, the 2001 Family Meeting did not happen. There were no 2001 Representations as alleged. The Plaintiff set out a detailed distribution of the Deceased’s properties to his children. However, the public records show that the Deceased could not have made such representations in 2001.
73.As for the two landed properties, the Plaintiff’s evidence is that the Deceased said he “會把涉案物業送贈給” the Plaintiff. It is unclear as to whether the Deceased had already gifted the two landed properties to her or the Deceased promised her that he would gift the two landed properties to her in the future, upon his death. At one time, the Plaintiff’s oral testimony in court was that pursuant to the 1998 Oral Agreement, the Deceased had already gifted the two landed properties to her. 74.Mr Ah-weng is right that this further contradicts the Plaintiff’s case that the Deceased by 2001 must have effectively recognized her beneficial title to the two landed properties because by 2001, the Plaintiff, on her case, had already spent money on renovation, had exercised control over the Fook Shing Property including sub-letting the same to third parties since 2000 and granting a bare licence to Ka Fung in 2000. All these do not sit well with the Plaintiff’s case that somehow in 2001, the Deceased suddenly made an announcement that he would (“會”) gift the two landed properties to the Plaintiff when according to the Plaintiff she had already obtained beneficial title and exclusive possession of the same by then. 75.Mr Fan for the Plaintiff submitted that to the Plaintiff, “would (“會”) gift” and “already gifted to her” means the same and she used the same interchangeably. I do not accept such submissions. I am of the view that the Plaintiff must be able to appreciate the difference between the two. 76.Further, the Plaintiff’s evidence is that the Family Meeting took place at noon time on 2 February 2001 in Star Court. Mr Ah-weng for the Defendant is right in submitting that the Deceased’s birthday was a Friday and a working day for Lana. Lana resumed work between the 7th day and the 10th day of Chinese New Year. Anyone involved with Lana (including the Deceased) would have been working that day. Further, Tat Ming worked as a salesperson in Fortress Electronics retail store. He would not have taken a day off on Friday for the Deceased’s birthday celebrations. 77.Mr Fan for the Plaintiff that it is inherently probable that all of the Deceased would come to the 2001 Family Meeting because the Deceased “announced in advance” that he was to discuss distribution of family assets. However, that is not the evidence. There is no evidence that the Deceased made any prior announcement before the 2001 Family Meeting. 78.Mr Ah-weng is also right that the Plaintiff has not provided particulars as to the location and time of the 2001 Family Meeting in her pleadings. Arthur set out the details of the family gathering in his first witness statement on 21 May 2019. After 21 May 2019, the Plaintiff filed three witness statements including the one by Vannie Gao, none of which traversed Arthur’s account of the 2001 Family Meeting. 79.I also accept that it is more probable than not that the Deceased would not have discussed his posthumous arrangements on the day of celebrations for the Deceased’s birthday combined with Chinese New Year celebrations for his staff, suppliers and business partners. I accept the Defendant’s case that there was only a family gathering in the evening at the Restaurant to celebrate the Deceased’s birthday. 80.I also note that the Plaintiff’s evidence is that the Deceased on 2 February 2001 called a family meeting to tell members of the Au family that he had executed a will in 2001 but in fact he did not. It is difficult to see why the Deceased needed to deceive all members of the Au family, on his birthday, in 2001. 81.Further, Mr Ah-weng also submitted that the location and timing of the 2001 Family Meeting is not one of the agreed list of issues simply because the Plaintiff had never contested that other than the family gathering at the time and location as described by Arthur, there was no other family meeting in Star Court at noon as alleged by Plaintiff. I agree that in so far as the Plaintiff attempts to rely on the 2001 Family Meeting, it is up to her to plead particulars in relation to the location and timing of the same which she has not done. The fact that the Plaintiff never mentioned the location and timing of the 2001 Family Meeting until she went into the witness box does affect the credibility of her case. 82.For the above reasons, on balance, I do not accept the Plaintiff’s case that the Deceased did make the 2001 Representations. I accept Arthur’s evidence that the only family gathering on that day was the dinner gathering in the Restaurant and not in Star Court. This also materially affects the credibility of the Plaintiff’s case. 83.Seventhly, the conduct of the Plaintiff, after the death of the Deceased, objectively speaking, indicates the 1998 Oral Agreement and the 2001 Representations do not exist.
84.I am the view that the above course of conduct indicates that the 1998 Oral Agreement and the 2001 Representations do not, as a matter of fact, exist. 85.Eighthly, I do not fine the evidence of the Plaintiff incredible. Apart from the matters set out above, I also note that:
86.Ninthly, the Plaintiff relied heavily on the fact that she sub-let the two landed properties to rent and thus asserted her rights as the owner of the same. It is true that she sub-let the properties to third parties. However, that does not mean that she was asserting her rights as the real owner of the same. In fact, the tenancy agreements show that prior to the death of the Deceased, many of the tenancy agreements were entered into in the name of the Deceased and/or Yuen Bong. It was only after the death of the Deceased that the Plaintiff used her own personal name to enter into some the leases. Mr Ah-weng has made extensive submissions on this point and I agree. 87.Indeed, the 2004 Tenancy Agreement has a specific additional clause to allow sub-letting by the Plaintiff qua tenant. I accept Mr Ah-weng’s submission that the terms of the 2004 Tenancy Agreement were reached in order to protect the Plaintiff’s interest qua tenant. It is submitted that the terms of the 2004 Tenancy Agreement were carefully designed so as to give the Plaintiff the right to occupy and sublet the Fook Shing Property until 2045, and the Plaintiff would not have to pay for any damage to the premises to the Deceased, as long as the Plaintiff paid the utilities. I agree. 88.I should also mention that I do not find any evidence from any of the sub-tenants helpful. For example, the evidence of Mr Lau is not probative in deciding the key issues in this case. 89.Tenthly, there was a dispute between the Plaintiff and Ka Fung in relation to the shared expenses of the Fook Shing Property. The Plaintiff’s handwritten note in Allied Good’s debit note indicates that she asked Ka Fung to revert to the Deceased to ascertain what expenses she should bear. I agree that if the Plaintiff were truly the sole beneficial owner of the Fook Shing Property, the Deceased would never be involved in adjudicating over the splitting of expenses between Yuen Bong and Allied Good. In my view, this shows that at the time of such dispute, the Plaintiff still treated the Deceased as the owner of the Fook Shing Property. 90.Eleventhly, given this Court’s finding that the 2001 Representations never exist, I do not find Vannie Gao’s evidence credible. She has also indicated that she had made claims against the properties that Hon Ming was entitled to pursuant to the 2001 Representations (which she subsequently gave up in the settlement in 2017). Given that she had made claims based on the 2001 Representations, she is hardly an independent witness as Mr Fan submitted. 91.Finally, Mr Ah-weng also submitted that the terms of the 1998 Oral Agreement do not make common sense. First, there was no utility of foregoing the maintenance claim against Yeung Ming as both the Plaintiff and the Deceased knew full well that Yeung Ming had no assets at the material time. He also would not have any ability to pay any meaningful ancillary relief to the Plaintiff. The cause of the divorce was after all due to Yeung Ming’s dishonest and incompetent financial management of their assets. On this alone, the Plaintiff would have nothing to give up, if in her view, there was nothing to claim against in the first place. On this view, there was no reason why the Deceased would have asked the Plaintiff not to claim against Yeung Ming. The Plaintiff’s answer is that the Deceased would intervene to help Yeung Ming. However, the Deceased being a seasoned businessman, is unlikely to offer his assets to support the ancillary claims of the Plaintiff. 92.The terms of the 1998 Oral Agreement are also strange. For example, the Plaintiff can remarry anytime during her life term. According to the Plaintiff, the Deceased would have to bequeath the two landed properties to her with the possibility that she could remarry subsequently. Further, it is also not entirely clear that as to what it means by “負責並確保本人的子女…得到最好的照顧””? For how long does this need to be carried out? What does “負責…確保” entail? What does 最好 means in this context? 93.I agree with the above submissions. The Deceased was a sophisticated businessman. It is unlikely that he would have simply gifted the Plaintiff the two landed properties, and hope that the Plaintiff would hold up her end of the bargain. If he did so intend in the first place, he would have transferred the title directly to the Plaintiff. Equally, it is unlikely that the Plaintiff, as a sophisticated businesswoman, not a housewife, would not have agreed to continue to perform her obligations (all are continuing obligations until her death) without agreeing on when the landed properties would be transferred. 94.For all the reasons stated above, I dismiss the Plaintiff’s claims based on the 1998 Oral Agreement and the 2001 Representations. 95.As the 1998 Oral Agreement and the 2001 Representations do not exist, I do not find it necessary to address the issues of detrimental reliance and part performance. The Plaintiff had occupation of the two landed properties during the relevant period and indeed collected rents from tenants and sub-tenants. It is only natural that she would have incurred some relevant expenses. THE COUNTERCLAIM 96.As to the Defendant’s counterclaim, I agree that in the absence of anything special it would be the ordinary letting value of the property that would determine the amount of the damages. (See AG v Stephen Chiu Kwok Chun, unreported., CACV 167/1984, 9 April 1985 at §14). 97.The Plaintiff submitted that she is entitled to a set-off in diminution or extinction of the Defendant’s counterclaim the expenses and paid by the Plaintiff in respect of the two landed properties. However, in relation to expenses incurred prior to 7 August 2015, such expenses were incidental to the Plaintiff’s occupation of the two landed properties and she derived benefit from sub-letting the same to third parties. Mr Ah-weng also submitted that such expenses are unrelated to the Defendant’s counterclaim for mesne profit. 98.However, in relation to the renovation expenses relating to the Fook Shing Property in the sum of HK$145,228.40 incurred after 7 August 2015, I am of the view that the same can be set off against the Defendant’s claim for mesne profit. Renovation expenses, unlike utility expenses, government rate and rent, management fees, are normally shouldered by the landlord. There is evidence that the Plaintiff did pay for the said sum. 99.Mr Fan for the Plaintiff also challenges on the credibility of the Informal Understanding and Arthur’s oral testimony on this issue. It was submitted that the Informal Understanding is not specifically pleaded. On balance, I am of the view that the Informal Understanding exists. However, if I am wrong on that, it really does not matter. The Plaintiff carries the burden to prove the existence of the 1998 Oral Agreement and the 2001 Representations which she fails to discharge. 100.Mr Fan for the Plaintiff also submitted that Arthur’s oral evidence that Madam Lau voluntarily retired from Lana is different and inconsistent with what he stated in his witness statement that he exercised “an executive decision to dismiss Madam Lau as she could no longer fulfil her supposed role in the business.” I agree with Mr Fan. However, the Court has to assess the parties’ evidence holistically. The fact that a witness lied on a specific issue which is not directly relevant to the issues to be determined is not determinative of the overall credibility of the witness. Overall, I do accept that Arthur’s evidence in relation to the major factual issues to be credible. 101.By an order dated 28 February 2020, the rental valuation evidence is agreed. I agree that the period of mesne profit should run from 7 August 2015 (per the Informal Understanding). DISPOSITION 102.Accordingly, I make the following orders:
103.For the sake of completeness, I should mention that I have considered all the submissions of the parties as set out in their respective rounds of Opening and Closing Submissions. I do not find it necessary to deal with each individual points and/or sub-points raised by the parties. 104.Finally, I thank Mr Fan and Ms Seto for the Plaintiff and Mr Ah-weng and Mr Lam for the Defendant for their assistance in this trial.
Mr Alex Fan & Ms Joanne Szeto instructed by Sit, Fung, Kwong & Shum for the Plaintiff Mr Jonathan Ah-weng & Mr Bernard Lam instructed by Boase, Cohen & Collins for the Defendant | ||||||||||||||||
Cases cited in this judgment
Other judgments that cite this case