Fu Kwai Chun v. Fu Wing Bill, The Executor of the Estate of Fu Mei Chun, Deceased

DCCJ 2021/2019

[2024] HKDC 101

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2021 OF 2019

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JUDGMENT

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A.  Factual background

1.The Plaintiff (Fu Kwai Chun), the Defendant (Fu Wing Bill) and the Deceased (Fu Mei Chun) are siblings of the Fu family. The Deceased was the second eldest daughter of the family. The Plaintiff and the Defendant are the younger sister and brother of the Deceased respectively. The Fu family has other siblings living in Hong Kong, Mainland China and the United States. Most of them are not involved in this dispute, except one Fu Wing Kai who is the younger brother of the Plaintiff and the Defendant and a witness called by the Plaintiff in these proceedings.

2.The Fu family was from Guangzhou, Mainland China. In or about 1963, the Deceased moved to Hong Kong and worked as an accountant. She was later married and her husband was a captain of cargo ships. The couple had no children and first lived at 9A, 523 Nathan Road, Yau Ma Tei, Kowloon, Hong Kong.

3.In or about 1974, the Plaintiff moved to Hong Kong. She was married in Hong Kong and worked as a nurse in a medical clinic owned by Dr Madam Luk Ling (“Dr Luk”). Dr Luk’s husband, Mr Yau Kwong Tat (“Mr Yau”), is another witness called by the Plaintiff in these proceedings.

4.The Defendant was originally a doctor in Guangzhou where he practiced both Western and Chinese medicine. He was married to one Madam Tse. In 1995, the Defendant’s family immigrated to San Francisco, the United States. His medical qualification was not recognised in the United States and as a result, he could only do cleaning and other miscellaneous jobs. The Defendant did not feel like he fit into the life of the United States and wanted to leave the United States. His wife, however, disagreed. Consequently, in 1996, he moved to Hong Kong alone to reunite with the Deceased.

5.Before the Defendant moved to Hong Kong in 1996:

(1)  The Deceased bought a property at 12C, Kam Kwong Mansion, 36-44, King Kwong Street, Happy Valley (“Happy Valley Property”) for letting purposes.

(2)  The Deceased’s husband passed away in 1993.

(3)  On 12 December 1995, the Deceased and the Plaintiff bought a property at 2/F, 179 Sai Yee Street, Mong Kok, Kowloon, Hong Kong (“Sai Yee Street Property”) as joint tenants. The Deceased, the Plaintiff and the Plaintiff’s husband then lived together at the Sai Yee Street Property.

6.After the Defendant moved to Hong Kong in 1996, he lived at the Sai Yee Street Property with the Deceased, the Plaintiff and the Plaintiff’s husband. On 3 August 1996, the Deceased added the Defendant’s name to the Happy Valley Property as joint tenants.

7.In or about June 2015, the Deceased moved out of the Sai Yee Street Property into an elderly home in Tung Chung, New Territories, Hong Kong.

8.The Deceased died on 18 July 2016. On 5 October 2016, probate was granted and the Defendant became the sole executor of the Deceased’s estate.

B.  Plaintiff’s case

9.The Plaintiff sues the Defendant as the executor of the Deceased’s estate relying on a post-dated cheque drawn by the Deceased in the sum of HK$3,000,000 (“Cheque”).[1]

10.The Plaintiff’s case is that the Cheque was drawn under the following circumstances:

(1)  The relationship between the Deceased and herself had all along been very good until the Deceased’s death in 2016.

(2)  Between 1990 and 1995, the Deceased borrowed a total of HK$500,000 from the Plaintiff, which was not repaid by the Deceased. According to the Plaintiff’s pleaded particulars:

“(ii) The date of each of the alleged loan could not be ascertained. The Deceased borrowed all 4 loans between 1990 and 1995.

(iii) The amount of each of the alleged loan were HK$250,000, HK$150,000, HK$50,000 and HK$50,000.

(iv) The loans are all paid to the Deceased in cash.

(v) For every loan, the Deceased made [a] phone call to the Plaintiff and asked the Plaintiff for [a] loan on the prior day. On the next day, the Deceased came to the clinic where the Plaintiff worked and took the cash from the Plaintiff. For the loans of HK$250,000 and HK$150,000, the Deceased asked for loans because she needed to repay the loan of her margin account for the futures on the commodity market. For the two HK$50,000 loans, the Deceased borrowed from the Plaintiff for paying the hospital bills of the mother of the Deceased's goddaughter.”

(3)  On 12 December 1995, the Deceased and the Plaintiff bought the Sai Yee Street Property as joint tenants. The Deceased and the Plaintiff agreed that the Property would be passed to each other when one of them passed away. They both understood that the one who outlived the other would become the sole owner of the Property. On 13 September 2013, however, the Deceased severed the joint tenancy.

(4)  In or about late 2013 or early 2014, the Deceased fell in an accident and was immobilised for more than one month. During that period, the Plaintiff took care of the Deceased daily. She prepared every meal for the Deceased and also carried her to and from her bed every day. When the Deceased’s condition turned better, she was very thankful to the Plaintiff. She told the Plaintiff that she felt guilty and owed a lot to the Plaintiff. The deceased then drew the Cheque, which was post-dated to 17 March 2018, and gave it to the Plaintiff “as a gift and/or gratuity and/or repayment of the debt”.

11.On 30 March 2018, the Plaintiff presented the cheque to Bank of China (Hong Kong) Ltd. It was returned by the bank with a stamp stating “Account Closed”.

C.  Defendant’s case

12.The Defendant denies the Plaintiff’s case:

(1)  According to the Defendant, while the relationship between the Deceased and the Plaintiff was good at the beginning, it began to turn bad after they moved into the Sai Yee Street Property and lived together. From 2002 onwards, there had been frequent arguments between the Deceased and the Plaintiff. Since 2003, their relationship had deteriorated to the extent that they no longer shared a table for meals. Their relationship remained bad until the death of the Deceased on 18 July 2016.

(2)  The Defendant denies that the Deceased borrowed any sum from the Plaintiff between 1990 and 1995 or owed any outstanding debt to the Plaintiff as of late 2013 or early 2014.

(3)  The Defendant denies that the Deceased suffered any accident in late 2013 or early 2014.

13.In any event, put at the highest, the Cheque was at most an incomplete gift inter vivos, which was revoked by the death of the Deceased.

14.The Defendant also relies upon various other grounds of defence, such as the absence of consideration/total failure of consideration, the Plaintiff’s own admission in or about July/August 2016 that she then possessed a blank cheque signed by the Deceased and therefore the Cheque was at most an inchoate cheque, defects in the Plaintiff’s pleadings and the lack of notice of dishonour.

D.  Legal analysis

15.As shown by the divergence of both parties’ cases, the main issues are:

(1)  What was the relationship between the Plaintiff and the Deceased after 2002/2003;

(2)  Whether the Deceased borrowed any sum from the Plaintiff between 1990 and 1995 and whether any of the sums were outstanding as of late 2013 or early 2014;

(3)  Whether the Deceased suffered any accident in late 2013 or early 2014; and

(4)  Whether the Defendant is liable for the Cheque.

16.The Plaintiff has called 3 witnesses, namely (1) Fu Wing Kai, (2) Mr Yau and (3) herself.

17.The Defendant has also called 3 witnesses, namely (1) Lee Ling Yau (“Madam Lee”, a close friend of the Deceased), (2) Chan Po Man (“Mr Chan”, the Deceased’s adopted son) and (3) himself.

18.Among these witnesses being called, the Plaintiff herself is obviously one of the important witnesses as a lot of the factual assertions in the present case depend on the credibility of her evidence. I set out my general view on her evidence below before I analyse both parties’ cases on the aforesaid issues.

19.In my view, the Plaintiff is neither an honest nor reliable witness. Her evidence is inconsistent with many undisputed facts and contemporaneous documents. I do not intend to refer to all such inconsistencies. It suffices to mention some of the examples below.

20.The Plaintiff alleged that her relationship with the Deceased had all along been very good until the Deceased’s death. This is plainly inconsistent with the following undisputed facts and contemporaneous documents:

(1)  Since 2003, the Deceased and the Defendant did not share a table for meals.

(2)  On 30 April 2010, the Deceased executed a will bequeathing all her estates to the Defendant and none to the Plaintiff.

(3)  On 13 September 2013, the Deceased executed a notice of severance severing the joint tenancy of the Sai Yee Street Property.

(4)  In or about June 2015, the Deceased went to live in an elderly home in Tung Chung, New Territories, Hong Kong. The Plaintiff never visited the Deceased.

21.The Plaintiff alleged that she did not visit the Deceased because she had backbone problems. The allegation, however, is a bare assertion and not supported by any proper evidence.

22.The Plaintiff also made a bold and serious allegation against the Defendant that he used the injection of drugs to control or manipulate the Deceased. It turned out again to be a bare assertion.

23.Overall, I do not consider that I can place any reliance upon the Plaintiff’s evidence.

D1.  What was the relationship between the Plaintiff and the Deceased after 2002/2003

24.According to the Defendant’s evidence, while the relationship between the Deceased and the Plaintiff was good at the beginning, it began to turn bad in 2002/2003 and remained bad until the death of the Deceased on 18 July 2016. The Defendant’s evidence is consistent with the undisputed facts and contemporaneous documents as I set out in paragraph 20 above.

25.His evidence is corroborated by the evidence of Madam Lee, a close friend of the Deceased:

(1)  In or about 2002, Madam Lee already knew that the Deceased and the Plaintiff were not on good terms.

(2)  After 2002, the Deceased told her that the Plaintiff used foul language to scold her. The Deceased was unhappy and aggrieved.

(3)  In or about 2010, Madam Lee knew that the Deceased had left a will. The Deceased told her that she would not leave a penny to the “four red guards” (and the Plaintiff was one of them).

(4)  Several years after 2010, the Deceased told her that the title of Sai Yee Street Property had been severed and said, “Now that it’s done and separated. She [the Plaintiff] has her own and I have my own. We were good sisters. I only came to know her true character after living together. I would rather donate my property than benefit her.” (“而家搞掂喇，分開咗。佢有佢，我有我。以前好姊妹，住落先知咁反骨，捐出去都唔益佢”).

(5)  She and the Defendant accompanied the Deceased to move into the elderly home in Tung Chung in 2015. She once asked the Deceased if the Plaintiff had visited her, the Deceased answered, “Of course not. I don’t need her to come visit me. I told Bill [the Defendant] that I don’t even need her to give me incense and pay me respect after I die” (“佢梗係無啦，我唔使佢嚟啊，我叫阿標我死咗之後都唔使嗰個人裝香拜我呀”).

26.The evidence of the Defendant and Madam Lee is also consistent with that of Mr Chan, the Deceased’s adopted son:

(1)  After Mr Chan came to Hong Kong, he visited the Deceased regularly. He had knowledge about the relationship among the Plaintiff, the Deceased and the Defendant. He also had knowledge about the relationship between the Deceased and Fu Wing Kai.

(2)  He had no knowledge about the Plaintiff's allegation that the Defendant controlled or manipulated the Deceased by drugs. He had never seen Defendant injecting any drugs into the Deceased as alleged by Plaintiff.

(3)  After about 2003, the Deceased had a poor relationship with the Plaintiff. The Deceased told him that she was scolded by the Plaintiff with foul language.

(4)  He knew that the Deceased left a will in about 2010. He said that the Deceased had the best relationship with the Defendant and had a poor relationship with the Plaintiff.

(5)  In about 2013, the Deceased told him that she did not like the Plaintiff and she wanted to sever her interest in the Sai Yee Street Property. The Deceased said, “I would not give it to her after I die” (“我死左都唔畀佢”). Later on, he knew that the Deceased and the Plaintiff had quarrelled about the severance of the joint tenancy of the Sai Yee Street Property.

(6)  In about 2015, the Deceased told him that she had incontinence problems. He suggested that the Deceased lived at an elderly home in Tung Chung (where he worked). The Deceased accepted the suggestion.

(7)  When the Defendant was in Hong Kong, the Defendant visited the Deceased on a daily basis. He had never seen the Plaintiff at the elderly home and only saw Fu Wing Kai once outside the elderly home.

(8)  After the Deceased died, the funeral matters were arranged by the Defendant and himself. The Plaintiff and other siblings only turned up at the funeral hall on the funeral day when the ceremony was about to finish (“即是在做法事的臨近尾聲時，舅母的其他弟妹才來到殯儀館，包括符桂珍、符麗珍、符榮佳和一個美國回來的弟弟（符榮鏗）”).

27.I consider the Defendant, Madam Lee and Mr Chan to be all honest and reliable witnesses. Their evidence was consistent with undisputed facts and contemporaneous documents. They answered questions in a straightforward way and their evidence was unshaken under cross-examination.

28.Therefore, I accept the Defendant’s evidence and reject the Plaintiff’s evidence. I find that while the relationship between the Deceased and the Plaintiff was good at the beginning, it began to turn bad in 2002/2003 and remained bad until the death of the Deceased on 18 July 2016.

D2.  Whether the Deceased borrowed any sum from the Plaintiff between 1990 and 1995 and whether any of the sums were outstanding as of late 2013 or early 2014

29.To start with, there is not a single document evidencing such loans between the Plaintiff and the Defendant. Mr Yau was called by the Plaintiff to give evidence about the first alleged loan in the sum of HK$250,000. I however agree with Mr Siu (who appeared on behalf of the Defendant) that Mr Yau is not an entirely independent witness and he has a close relationship with the Plaintiff.

30.There is also a material discrepancy between the Plaintiff’s pleaded case and the evidence of Mr Yau. According to the Plaintiff’s pleaded case, “the Deceased asked for loans because she needed to repay the loan of her margin account for the futures on the commodity market.” Pursuant to Mr Yau’s evidence, the loan was for the gold investment of the Deceased’s husband.

31.According to the Defendant, even during the quarrels between the Plaintiff and the Deceased, he had never heard the Plaintiff alleging any loans owed by the Deceased to the Plaintiff. The Deceased had a stable rental income from the Happy Valley Property. At all material times, she was cautious financially.

32.HK$250,000 was not a small sum at the time. There ought to have been some documentary records. In the absence of any documentary evidence, I do not accept the bare assertions of the Plaintiff and Mr Yau.

33.In any event, Mr Yau’s evidence was that the loan was repaid within 1 or 2 months. He did not go so far as to suggest (and he had no knowledge to suggest) the existence of any outstanding debt in late 2013 or early 2014 between the Plaintiff and the Deceased, which is one of the alleged bases of the Deceased’s drawing of the Cheque.

D3.  Whether the Deceased suffered any accident in late 2013 or early 2014

34.The Plaintiff alleged that the Deceased fell in an accident and was immobilised for more than one month in or about late 2013 or early 2014. This is, however, contrary to the Deceased’s medical records at the relevant time and her travel records in November and December 2013.

35.Mr Leung (who appeared on behalf of the Plaintiff) objected to the Defendant’s reliance upon the Deceased’s medical records on the basis that they were not put to the Plaintiff during her cross-examination and relies upon Kaifull Investments Ltd v Commissioner of Inland Revenue [2002] 1 HKLRD 858.

36.In the case of Kaifull, Deputy High Court Judge Reyes SC (as he then was), applying Browne and Dunn (1893) 6 R 67 held that:

“(1) The general principle is that, where an attack on a witness’ evidence is to be made, notice should normally be given to the witness in cross-examination of the nature of the attack if such is not otherwise obvious.

(2) There is no breach of the principle if the witness knew or ought to have known that his version of events was being challenged or that adverse inferences might be drawn against him.

(3) Even if the procedural rule is transgressed, it does not inexorably follow that matters which have not been put to a witness in cross-examination cannot be relied on. It may be a question of the weight to be given to a witness’ testimony taking into account all the available evidence. Thus, for example, a witness’ evidence may be so incredible as to be incapable of belief or his evidence may be unsupported or contradicted by known facts and contemporaneous documents.

(4) The principle does not inflexibly require every point which might be used against the witness to be put to him. There can be no hard-and-fast rule. The paramount consideration is fairness to the witness. In essence, the principle is breached if in all the circumstances an omission to cross-examine on a specific point is unfair to a witness.”

37.Applying the above the above principles, I disagree with Mr Leung that the Defendant cannot rely on the Deceased’s medical records:

(1)  The Defendant has always denied that there was the alleged accident in late 2013 or early 2014.

(2)  The relevant medical records had been disclosed to the Plaintiff before the trial.

(3)  During his oral opening submissions, Mr Siu expressly made the point that the Plaintiff’s alleged accident was inconsistent with the medical records.

38.Therefore, the nature of the Defendant’s attack ought to be obvious to the Plaintiff when the medical records were disclosed or at the latest when Mr Siu opened his case. The Plaintiff knew or ought to have known that his version of events was being challenged by the medical records. If she desired to respond to the point, she could have done so by adducing a supplemental witness statement or providing a response during her evidence-in-chief which was given after Mr Siu’s oral opening submissions.

39.In any event, even if there was any breach of the rule in Browne and Dunn, as held in Kaifull, it does not necessarily follow that the Defendant cannot rely on the medical records but it may be a question of the weight to be given to a witness’ testimony taking into account all the available evidence. In the present case, I do not consider that my assessment of the Plaintiff’s evidence will be materially improved given my view on her credibility taking into account all the other available evidence.

D4.  Whether the Defendant is liable for the Cheque

40.I have concluded above against the Plaintiff on the existence of the alleged loans between 1990 and 1995, or in late 2013 or early 2014. It follows that I do not accept and reject the Plaintiff’s case that the Deceased drew the Cheque as “repayment of the debt”.

41.I have also concluded above against the Plaintiff on the relationship between the Plaintiff and the Deceased after 2002/2003 and the existence of the alleged accident in late 2013 or early 2014. It follows that I do not accept the Plaintiff’s case that the Deceased drew the Cheque in favour of the Plaintiff “as a gift and/or gratuity”.

42.Further or alternatively, I agree with the Defendant the Cheque was (at most) an incomplete gift inter vivos and cannot be validly enforced after the Deceased’s death on 18 July 2016.

43.Mr Siu referred me to and cited Halsbury’s Laws of England, Vol 52 (2020), at §268:

“A cheque is not money or the indicia of title to money. It is merely a mandate to the donor’s bank, which is revoked by his death, unless before that event the cheque is presented and paid.”

44.Mr Siu also relied upon the case In re Swinburne [1926] Ch 38 whereby:

(1)  Pollock M R held, at p 41, that:

“Now a cheque is clearly not an assignment of money in the hands of a banker. A cheque, as explained by Lord Romilly M R in Hewitt v Kaye (1), is nothing more than an order to obtain a certain sum of money, and it makes no difference whether the money is with the bankers or elsewhere. It is an order to deliver the money; and if the order is not acted upon in the lifetime of the person who gives it, it is worth nothing. … In the case of Hewitt v Kaye (1) a cheque was given, and it was not presented before the donor’s death. In the present case it was presented, but the bank asked legitimately for confirmation of the signature, and a cheque holding a confirmation of the signature was not presented. Lord Romilly held in that case that the cheque did not operate as a good gift. “All the authorities,” he says, “decide that there must be a complete delivery,” that is, “delivery not merely of the authority to receive, but of some property.”

(2)  Warrington L J held, at p 44, that:

“In the first place, in order to make an effectual gift inter vivos there must be an actual transfer of the subject of the gift or of the indicia of title thereto. A cheque is nothing more than an order directed to the person who has the custody of money of the testatrix requiring him to pay so much to the person in whose favour the cheque is drawn. ... Those words of Lord Romilly apply exactly to the present case. The cheque here was an order to pay a certain sum of money. It was not acted upon by the person to whom it was directed in the lifetime of the testatrix, and therefore, to use Lord Romilly’s expression, “it is worth nothing.””

45.Therefore, Mr Siu’s submission was that even if the Deceased drew the Cheque “as a gift and/or gratuity”, it had been revoked by the death of the Deceased and the Plaintiff can no longer enforce it against the Defendant. Mr Leung has cited no authorities in response. I accept Mr Siu’s submission and agree that the Plaintiff’s claim in this action should be dismissed in any event.

46.To be fair to Mr Siu’s diligence, I put on record that Mr Siu has also advanced other grounds of defence to resist the Plaintiff’s claim, such as the absence of consideration/total failure of consideration, the Plaintiff’s own admission in or about July/August 2016 that she then possessed a blank cheque signed by the Deceased and therefore the Cheque was at most an inchoate cheque, defects in the Plaintiff’s pleadings and the lack of notice of dishonour. As I have already rejected the Plaintiff’s case based on the reasons set out above, it is not necessary for me and I do not propose to go into the details of each ground of defence advanced by the Defendant.

E.  Conclusion

47.For the reasons above, I dismissed the Plaintiff’s claim in this action.

48.Costs should follow the event. I make a costs order nisi that the Plaintiff do pay the Defendant the costs of this action, to be taxed if not agreed, with certificate for counsel.

Mr Colin Leung, instructed by Lawrence Y W Ng & Co, for the Plaintiff

Mr Stanley Siu, instructed by Yeungs, for the Defendant