Lau Tung Kuen, Personal Representative of the Estate of Tang Ming Tai, Deceased v. Lau Tung Hoi Kent

DCCJ 1452/2021

[2025] HKDC 219

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1452 OF 2021

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JUDGMENT

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A.  OVERVIEW

1.This is a trial between the Plaintiff (“P”), acting as the sole executor of the estate of the Deceased (the “Estate”), his late mother, under her Will dated 18 September 2007 (the “Will”), and the Defendant (“D”), one of P’s siblings as well as a beneficiary of the Estate.

2.P claims, inter alia: -

(1)  A declaration that P and D each holds 1/3 share in both Lot No 85 in DD 137 (the “Car Park”) and Lot No 169 in DD 134 (the “Land for Storage”) (collectively the “Two Properties”) for the 6 beneficiaries of the Estate including themselves (the “Six Beneficiaries”); and

(2)  Repayment of HK$200,000 (the “Sum”) withdrawn from the Estate by P and passed to D in September 2010.

3.As regards the disputed 2/3 share in the Two Properties[1], there is no dispute that:-

(1)  It was purchased on 22 January 2010 at a total purchase price of HK$892,040;

(2)  A total cash sum of HK$664,987.50 was paid out from the Estate to purchase 3/6 share in the Two Properties (the “Purchase”);

(3)  The father of the parties and husband of the Deceased, the late Mr. Lau Fat Choi (the “Father”), had been holding 1/6 share in the Two Properties before the Purchase. No consideration was paid to the Father for the Purchase; and

(4)  The 2/3 share in the Two Properties have been acquired and held in the names of P and D each with 1/3 share.

4.The parties agree that the dispute essentially boils down to what was agreed during a family gathering amongst the Six Beneficiaries on 24 August 2008 (the “Gathering”) shortly after the Deceased passed away on 5 August 2008 and the reasons for the Purchase.

5.P’s case is that an express trust agreement was reached amongst the Six Beneficiaries that the Two Properties would be purchased using monies from the Estate under the names of P and D to be held by them on trust for the Six Beneficiaries.

6.On the other hand, D’s case is that:-

(1)  An oral agreement was reached amongst the Six Beneficiaries that all monies in the Estate would be held for the benefit of the Father and for his disposal as he saw fit during his lifetime; and

(2)  The Father subsequently decided to gift 1/3 share of the Two Properties to D and the other 1/3 share to P’s son, Lau Sai Fu (劉世富) (“Fu”), in or around August 2009.

7.Depending on the finding of the ownership of the 2/3 share in the Two Properties, there are also subsidiary issues concerning whether D needs to account for the income received by him from the Car Park and the Land for Storage.

8.Regarding the Sum, it is not in dispute that the Estate had paid the same to D on 27 September 2010. The only question concerns the nature and purpose of the payment.

9.P’s case is that it was a loan by the Estate at the request of D.

10.D’s case is that it was another gift by the Father to D, for covering medical expenses for arranging in vitro fertilization (“IVF”).

11.D also contends that P’s claim for loan recovery is time-barred and P’s equitable claims are barred by laches or acquiescence.

12.At the trial, P was represented by Mr Joseph Wong, and D was represented by Mr Peter Chung and Ms Hannah Tang.

B.  BACKGROUND

13.The Deceased passed away on 5 August 2008. She predeceased the Father, who passed away on 1 January 2018.

14.The Six Beneficiaries were the children of the Father and the Deceased, and namely:-

(1)  Lau Che Kwong (劉子光) (“Kwong”), son (passed away on 13 December 2019);

(2)  Lau Fu Yuen (劉富源) (“Yuen”), son;

(3)  P, Lau Tung Kuen (劉東權), son, and father of Fu;

(4)  Lau Chun Yin (劉春燕) (“Yin”), daughter;

(5)  Lau Tung Lok (劉東樂) (“Lok”), son; and

(6)  D, Lau Tung Hoi Kent (劉東海), son.[2]

15.Under the terms of the Will of the Deceased:-

(1)  Kwong and P were appointed as executors; [3] and

(2)  All the Deceased’s assets were to be shared and distributed equally amongst the Six Beneficiaries.

16.There is no dispute that the Estate comprised the following assets as of the date of the Deceased’s death on 5 August 2008:-

(1)  Cash in bank accounts in the total sum of HK$1,860,401.23 and CHF 213.53; and

(2)  Flat A, 4/F, Kam Hing Building, Tuen Mun (the “Kam Hing Flat”).

17.As regards the Kam Hing Flat, there is no dispute that:-

(1)  It was vested in the Six Beneficiaries as tenants in common in equal shares by a Deed of Assent dated 14 September 2011 executed at Messrs. Wong & Poon (“Deed of Assent”); and

(2)  It was the consensus and general understanding of the Six Beneficiaries that they would let the Father live and remain in it rent-free during his lifetime. In fact, the Father and the Deceased had been living in the Kam Hing Flat for many years before the Deceased passed away.

C.  THE PLAINTIFF’S CASE

C1.  The Gathering

18.It is P’s case that the Deceased had always had a wish to purchase the Two Properties. This is because the Car Park was adjoining the land owned by Yuen and Kwong and the Land for Storage was owned by the same landowners (apart from the Father being 1/6^th owner).

19.On the day of the Gathering on 24 August 2008:-

(1)  It was a Poon Choi（盆菜）gathering;

(2)  The Six Beneficiaries had all arrived after noon time;

(3)  During the afternoon before the Father arrived, there was discussion and agreement amongst the Six Beneficiaries on essentially 3 matters:-

(a)  Monies from the Estate would be set aside and used for the purchase of the Two Properties in order to fulfil the Deceased’s said wish (the “Mother’s Wish”);

(b)  For the purpose of the purchase, a joint account between P and D would be opened, and the logistics of the purchase would be left to P and D as they were the only male descendants residing in Hong Kong at the time; and

(c)  Yin suggested that the rest of the monies in the Estate would be used as “necessity money” (應急錢) in case the Father needed it for emergency purposes such as medical expenses, which all Six Beneficiaries agreed.

(4)  Kwong suggested that for the purchase, they would ask the Father to speak to the other owners because the Father was a senior figure and also a co-owner of the Two Properties himself;

(5)  At around 4 pm, Kwong went back to the Kam Hing Flat to fetch the Father and Kwong’s wife to the Gathering at D’s residence;

(6)  At around 5 pm, the Father, Kwong, and Kwong’s wife arrived together at D’s residence;

(7)  During the Poon Choi dinner, Kwong told the Father about the decision of the Six Beneficiaries to purchase the Two Properties using Estate monies and asked the Father to help to speak to the other co-owners. The Father agreed.

C2.  The Purchase

20.The following happened after the above agreement:-

(1)  On 29 August 2008, P and D opened a joint account (“P & D Joint Account”). P personally deposited HK$5,000 into P & D Joint Account for account opening purpose;

(2)  On 7 May 2009, P obtained probate for the Will;

(3)  On 23 May 2009, P opened an individual account (“P Account”). He then caused all the monies in the bank accounts of the Deceased to be transferred to P Account from 3 June 2009 to 17 August 2009;

(4)  On 15 September 2009, P and Kwong opened a joint account (“P & Kwong Joint Account”). P transferred HK$100,000 from P Account to P & D Joint Account. P transferred all monies in the sum of HK$1,633,272.52 (which represents all cash monies from the Deceased’s bank accounts less certain testamentary and funeral expenses incurred) from P Account to P & Kwong Joint Account and closed P Account;

(5)  On 21 September 2009, HK$500,000 was withdrawn from P & Kwong Joint Account to P&D Joint Account;

(6)  On 22 January 2010, the Father, P and D attended to the assignment of the 2/3 interests in the Two Properties at Messrs. Leung Kin & Co.;

(7)  On 26 January 2010, a cashier’s order in the sum of HK$604,987.50 was drawn from P & D Joint Account to the Father’s bank account. P & D Joint Account was closed; and

(8)  On 15 January 2011, a further sum of HK$60,000 was transferred to the Father as reimbursement of the monies for the Purchase, making up the total sum of HK$664,987.50 from the Estate for Purchase.

C3.  The Sum

21.As for the Sum, P’s case is that in about September 2010, P received a call from D asking for a HK$200,000 loan from the Estate. The loan was subsequently made with the consensus of the other beneficiaries.

22.In this regard, P relies on contemporaneous evidence in the form of repeated “admissions” by D of his indebtedness and liability to repay the Sum.

23.P also claims that there had been multiple prior occasions when D was orally asked to repay the monies borrowed to him. It is said that Lok had also chased for repayment from D.

D.  THE DEFENDANT’S CASE

D1.  The Gathering

24.It is D’s case that the Lau family was a traditional Hakka （客家） family. The Father was the family patriarch.

25.At the Gathering on 24 August 2008 (soon after the funeral of the Deceased), it was orally agreed among the Father and the Six Beneficiaries that the Estate would be left for the Father, in particular, that:-

(1)  All the money in the Deceased’s bank accounts would be held for the benefit of the Father and for his disposal as he saw fit during his lifetime; and

(2)  The Father would remain and live in the Kam Hing Flat rent-free during his lifetime.

D2.  The Purchase

26.According to D, his 1/3 share in the Two Properties was a gift from the Father.

27.In summary, his case is that:-

(1)  In February 1982, his grandfather Mr Lau Wan (the “Grandfather”) made gifts of about 10 lots of land each to P, D and their male siblings;

(2)  The lands of Lok and D were held on trust by the Father since they had not reached the age of 21 at the time. D beneficially received more than 10 lots of land from the Grandfather in this way;

(3)  The Father subsequently sold all of D’s lands in 1992. As examples, D produced land search documents showing the selling of 2 of his lands for HK$1,073,754 each;

(4)  By contrast, the Father only sold some of Lok’s lands;

(5)  Therefore, as compensation for D’s loss, the Father decided to gift D 1/3 share of the Two Properties in January 2010;

(6)  Although some of Lok’s lands were also sold by the Father, Lok had not received any compensation; and

(7)  The gift of the other 1/3 share to Fu was granted because he was the only grandson at that time.

D3.  The Sum

28.It is D’s case that similar to the 1/3 share in the Two Properties, in 2010, the Father gifted a sum of HK$200,000 out of the Estate money to the Defendant to cover his medical expenses for arranging IVF in conceiving male descendants for the Lau Family.

29.D denies that the Sum was a loan. His case is supported by Lok, who denied being asked by D before the Sum was lent, or that he had chased for repayment of the Sum from D.

30.D explains that the alleged “admissions” were only made in the context that D wished to avoid further confrontation with P and to remove any excuses from P to further delay the distribution of the assets in the Estate.

E.  ISSUES IN DISPUTE

31.I think the main issues in this case are as follows:-

(1)  Issue 1: What was the agreement at the Gathering and the nature of the Purchase?

(2)  Issue 2: Whether the Sum was a loan or a gift?

(3)  Issue 3: Whether P’s claim for loan recovery is time-barred?

(4)  Issue 4: Whether P’s equitable claims are barred by laches or acquiescence?

F.  LEGAL PRINCIPLES

F1.  On witness credibility

32.The courts have on many occasions followed the test set out by Chung J on the assessment of the credibility and/or reliability of a witness’s evidence in Star Glory Investment Ltd v Kai Tuo (HK) Technology Co Ltd and Others (unreported, HCA 3523/2002, 13 August 2005):

“12. The assessment of a witness’s credibility and/or reliability is a task frequently undertaken by the court in litigation (in fact, very often an essential task). I consider the following to be the appropriate test to adopt:-

‘There are two objective tests for assessing a witness’s credibility regarding a matter to which he has testified:-

(a) whether that part of his testimony is inherently plausible or implausible;

(b) whether that part of his testimony is, in a material way, contradicted by other evidence which is undisputed or indisputable (an example often given of such evidence is contemporaneous documents).

Further, where it is shown that a witness has been discredited over one or more matters to which he has testified (using the above tests), this fact is relevant to the assessment of his overall credibility. Likewise, regard may be had to a witness’s motive for deliberately not giving truthful testimony. For example, telling the truth may prejudice his interest, or a just determination of the litigation may affect his interest’.

(See, for example, the decisions in Chiu Chi Tong v Lau Chong Sai & Another, HCA 765/2002 (para 28) and Yu Ming Investment Ltd v Pang Ru Chuan, Richard, HCA 814/2002 (para 13)).”

F2.  On family arrangements

33.This is a dispute arising in the context of a family arrangement in a Chinese setting in the New Territories. In such a case, the context and the family setting are particularly relevant. As explained in Leung Hang Lin and Li Kwai Fuk v Lam Mei Yung [2019] HKCFI 2819):

“…

(5) However, the modern approach is to assess the parties’ common intention by a holistic approach having regard to the context and the particular facts. The court is not constrained to consider only pure direct monetary contributions to the purchase price. In a Chinese setting, especially for the older generations, where explicit discussions on property rights within the family are not that common, the court has to pay more regard to circumstantial matters.” (emphasis added)

G.  WITNESSES

34.P’s witnesses include P himself, Yin; and Fu. On the other hand, D’s witnesses include D himself and Lok.

35.Before I address the separate issues, I would like to set out some general observations about the parties’ evidence.

36.Witnesses from both sides have provided extensive oral and written testimonies regarding the various events in dispute, which, as a matter of fact, occurred some years ago. Take the Gathering as an example, in addition to the discussions and agreements finally reached, both sides have presented numerous intricate details about the events of that day. There appears to be a perception that the party providing more specific information will seem more credible, while any ambiguity in the details may raise questions about a party’s reliability. However, I think it is crucial to evaluate the matters from a pragmatic perspective. One must remember that these events took place many years ago, and but for the present dispute, the day in question would have simply been an ordinary family occasion. Thus, there seems to be limited reason to expect that participants would have focused on, and therefore be able to recall many years afterwards, various minor details from that day.

37.As a result, my fact-finding approach will prioritize the inherent probabilities of the accounts provided and evaluate whether the allegations are supported or contradicted by contemporaneous documents.

38.Furthermore, both parties have sought to highlight discrepancies between their opponents’ testimonies in the current case and those given in other related proceedings (i.e. HCMP 1684/2020 (“HCMP”) concerning the removal of P as the Father’s executor and DCMP 4041/2021 concerning the sale of the Kam Hing Flat and distribution of the proceeds). While significant inconsistencies are certainly relevant, I will remain mindful of the different contexts and focuses that shape each of these cases when assessing the impact of any inconsistencies.

39.Finally, I have taken into account all the arguments presented by both sides regarding the factual disputes. However, without disrespect, I will limit my analysis below to the matters that are important to my decision.

H.  ISSUE 1: WHAT WAS THE AGREEMENT AT THE GATHERING AND THE NATURE OF THE PURCHASE?

40.Having considered all the evidence, I prefer the case of P to that of D on this issue.

41.I think there are a number of problems with D’s case.

42.First, I find the alleged Hakka tradition to be incredible.

43.It is D’s case that there was an agreement at the Gathering amongst the Six Beneficiaries that their mother’s estate would be at the free disposal of the Father (“母親的遺產交由父親自由處置”).[4]

44.It was reiterated by D that the actual owner of the Estate was the Father, and the Six Beneficiaries agreed to let the Father freely dispose of the Estate (“我再重申，母親的遺產的實質業權擁有人是我的父親。我們六兄弟姊妺都同意將母親的遺產任我的父親自由處置”).[5]

45.The above is based on the alleged Hakka tradition within the family that the male head would control all the assets within the family.

46.At the trial, D agreed that the Deceased’s Will would not necessarily be followed within the family, since the Father was in full control. He also agreed that there would be problem if, for example, the Deceased decided to bequeath everything to D, as the ownership of the Deceased’s Estate remained with the Father.

47.Regarding the Kam Hing Flat, it is D’s case that although it was purchased in the name of Madam Tang, the purchase price however was wholly funded by the Father.[6]

48.At the trial, D agreed that although the Kam Hing Flat was under the Deceased’s name, the Father had the actual ownership (實質業權), and that the Estate was at the Father’s sole discretion (由他全權處置).

49.As stated above, it is not in dispute that by a Deed of Assent dated 14 September 2011 executed at Messrs. Wong & Poon, the Kam Hing Flat was vested in the Six Beneficiaries as tenants in common in equal shares, a fact which seems to be inconsistent with the alleged Father’s ownership rights.

50.When D was cross examined as to whether the Kam Hing Flat was in fact at the free disposal of the Father pursuant to the agreement at the Gathering, D gave answers which changed his case.

51.He first explained that he had confused thoughts (思緒混亂) when he gave his previous testimony under cross examination. He said the truth was that the Kam Hing Flat should be distributed according to the Will first. The Father would be allowed to live there until he died. Then, after consultation among the Six Beneficiaries, it was agreed that the money would be left for the Father’s use.

52.Second, the alleged gift is also inherently incredible.

53.As summarized above, the Father had sold all of D’s more than 10 properties in 1992. D had produced as examples land search documents showing the selling of 2 of his properties for HK$1,073,754 each. At the trial, D said when all his properties were sold by the Father in 1992, those properties were worth around HK$3,000,000. He further gave an estimate that the value of those properties would have appreciated around 10 times from 1992 to around 2010. In other words, if his properties had not been sold by the Father, they would have been worth around HK$30,000,000 by the time of 2010.

54.By contrast, it is not in dispute that the consideration for the purchase of the 2/3 share in the Two Properties was only HK$892,040.

55.D was questioned at the trial about the following matters, and he was unable to provide any meaningful explanation:-

(1)  The Father caused D significant losses back in 1992. Why did he need to wait for 17 years before suddenly deciding to compensate D for his losses in 2009?

(2)  The Father was a man of substantial means. Why did he not use his other assets to compensate D?

(3)  Why did the Father wait until the Mother passed away and then use the Mother’s estate monies to compensate D?

(4)  Why did the Father only compensate around 1.5% of D’s losses after having caused D such significant losses 17 years ago?[7]

(5)  Why did the Father still have to split up the gift between D and Fu when the compensation to D was already so small and grossly insufficient to compensate D?

56.Further, Fu's evidence, which was not challenged, and I accept, raises substantial questions about the credibility of D’s case. According to Fu, after his university graduation, he returned to Hong Kong in July 2011. He thereafter met the Father (his grandfather) every week. He also regularly attended family gatherings. However, he had never heard from anybody including the Father that he had received the alleged gift or anything marginally touching upon the same.

57.If D's statement regarding the gift is true, it is hard to comprehend why Fu would have no knowledge of it at all.

58.Third, when asked about his knowledge of the content of the Will, D's testimony also lacked credibility.

59.It is D’s case that he was only aware of the content of the Will by 2020.

60.At the trial, when it was put to him that there were references to the Will in the Deed of Assent executed on 14 September 2011 at Messrs. Wong & Poon, he admitted that the lawyer had explained the document to him, that he signed on the document and that he understood the content of the document.

61.However, when he was challenged about why he would be ignorant about the content of the Will when the staff of the law firm had mentioned the content of Will many times, D backtracked and claimed that he merely trusted and followed his elder brothers in signing the document.

62.It is also D’s case that he was present at the Kam Hing Flat when the Will was taken out from the cabinet and laid it out for all to see the day after the Deceased passed away. He said he had not read the Will at that time. On the other hand, he said his wife had read the Will as she was involved in preparing the documentations for the probate application.

63.However, when he and his wife went home, his wife only told him that the Will was a normal will, and that the Will stated that the Estate consisted of two parts, property and money. She did not tell him about the distribution in 6 shares, and D did not ask. He agreed that he had a good relationship with his wife.

64.I find D’s answer to be extraordinary. The Will was the will of D’s own Mother but P appeared to be disinterested. Further, the Will was a very simple document, and its only material term was that the Estate would be shared equally amongst the Six Beneficiaries, and yet his wife had not bothered to explain the same to D. Finally, the limited explanation by his wife was not even accurate. The Will did not consist of two parts and did not specify its components as property and cash.

65.Conversely, I do not think P's critique of D's other specific memories from the Gathering has harmed D's credibility.

66.P submits that there are at least the following 4 instances where D has changed his evidence on the events at the Gathering:-

(1)  From (i) confirming that it was a Poon Choi dinner to (ii) confirming that it was a BBQ dinner to (iii) being unsure whether it is a Poon Choi or BBQ dinner;

(2)  From (i) confirming that the Father arrived at noon to (ii) confirming that the Father arrived in the evening after going to watch horseracing at betting branch to (iii) confirming the Father arrived in the evening after either watching horseracing or buying Mark Six tickets at betting branch;

(3)  From (i) confirming that the Father was present during the making of the alleged agreement to (ii) confirming that the Father was not present during the making of the agreement; and

(4)  From (i) confirming that Lok was present since noon until the Poon Choi dinner to (ii) confirming that Lok arrived at around noon, then left after a short while, then came back again with the Father in the evening.

67.In my view, the aforementioned details are minor and, barring any special reasons, participants like D are not expected to remember them. After all, a trial is not a test of memory.

68.On the other hand, D submits P’s case should not be accepted for a number of reasons.

69.One of D’s main criticisms of P’s case is that the Mother’s Wish has changed from time to time and is inherently incredible in any event.

70.D points out that in P’s witness statement dated 20 June 2022, P’s version of the Mother’s Wish was very simple: (1) that the 6 Siblings should purchase the land adjacent to the pieces of land owned by Kwong and Yuen (2) to build houses so that they can reside next to each other and (3) to take care of each other[8]. This is corroborated by Yin’s evidence[9]. They both stated in their statements that the Mother’s Wish had been made known to the family before her death. Under cross examination, it is P’s evidence that the Mother’s Wish was made known to the family as early as 10 years before her death, i.e. as early as in 1998.

71.D submits that the Deceased could not have such a wish as it should have been known to the Deceased and the family that the Six Beneficiaries could not build 3 houses over the Two Properties because:-

(1)  P, D and Lok had already applied for the lands at other locations at as early as 1993 for their “dings” (丁);

(2)  Kwong and Yuen had used their “dings” on the adjacent land in 2007, and Yin has no “ding”;

(3)  The registered owner of a village house has to be the person with the “ding” used in the house;

(4)  When the “dings” of the 5 sons of the Six Beneficiaries had been used on different lands at different locations, the Six Beneficiaries could not be expected to apply their “dings” and build houses together on the Two Properties; and

(5)  It was well known all along that one of the legal title owners, Mr Lau Kam Wan (through his wife Ms Wu Lai Ha) was unwilling to sell his interests in the Two Properties. Therefore, even after the purchase of the interest from the other legal title holders, no houses could be built.

72.During cross examination, P explained that the land could be bought first and the application to build houses could be made when there were new “dings”. D contends that the answer does not make sense because the siblings were unlikely to give birth to newborn “dings” anymore at the time of the Deceased’s death:-

(1)  As of 2008, Kwong only had 2 grown-up daughters and no son. By that time, Kwong already reached the age of 52 – which means that Kwong is unlikely to give birth to another son;

(2)  The other siblings had already reached the age of 40s and only the Plaintiff himself had a son (and a grown-up daughter). His son, at the time of 2008, had already reached the age of 18. The Plaintiff himself is unlikely to give birth to another son as of 2008;

(3)  The rest of the Six Beneficiaries were already in their 40s-50s and were unlikely to give birth to a newborn “ding”. When asked whether he thought of this inherently improbability for having another newborn “ding” to spend on the 2 Properties for the 6 Siblings during the Poon Choi dinner, P simply could not answer; and

(4)  Passing on the interests in the Two Properties to new “dings” who can build houses equates to absolving Yin and any male Siblings who did not have a son, of their interests in the Two Properties. This is contrary to the Deceased’s Will, not to mention any alleged Mother’s Wish.

73.With respect, I do accept the above submissions because:-

(1)  To begin with, it is crucial to view the Mother’s Wish in the correct context. In P's case, this wish was introduced as one of several familial considerations that framed the discussion during the Gathering. The Six Beneficiaries intended to purchase the particular pieces of land for their use because their mother had expressed a desire for it. It is important to note that the Mother’s Wish should not be viewed as a rigid requirement akin to a commercial obligation in a business venture. Instead, these family wishes are often expressed in a more general manner and can evolve over time. As a result, the feasibility of certain aspects of these wishes may not have been thoroughly considered at the time they were articulated or during the planning to realize them; and

(2)  Further and in any event, following P’s amendment of his Statement of Claim on 22 December 2022, the Mother’s Wish was expressed as “that the 6 Beneficiaries do acquire the 2 Properties for their own use/collective rental” rather than only focusing on a sole purpose. During cross examination, P confirmed that the Mother’s Wish was to build houses for the siblings. However, P also suggested that building houses might not be necessary if small houses could not be built, as the siblings could still run the Car Park and generate profits from the Two Properties. Yin also gave answers to a similar effect. She also suggested that the Two Properties could potentially be sold to outside parties if deemed appropriate. I do not find the above to be inherently incredible.

74.D also points out that there are inconsistencies between P’s evidence in the HCMP and this action about when the agreement to purchase the Two Properties was reached. In P’s affirmation dated 5 October 2020 in the HCMP, the agreement was said to be made when the Six Beneficiaries were at the office of Messrs. Wong & Poon in October 2009. There was no mention about any prior agreement which took place in August 2008.

75.However, as previously explained, I believe that the contended inconsistencies must be assessed in light of the different natures of the two cases. The HCMP presents a spectrum of issues that contribute to the overarching question whether P should be removed as an executor of the Father. In contrast, the present case is more targeted, with one of the primary issues centering on the specific agreement regarding the assets in the Estate of the Deceased. Consequently, I think inconsistencies in some of the factual statements are not necessarily unreasonable. Further, D had explained at the trial that both discussions mentioned above had happened, and that there had been another subsequent discussion in 2010.

76.Further, D contends that if P’s case is true, it is unreasonable that the Father had not arranged for a formal trust instrument. This is because P has confirmed that the Father knew the concept of trust, and formal trust instruments had been used when the Grandfather distributed various pieces of land to be held on trust by Father for certain specific grandsons who were minors at the time. When being asked why the Father did not use any instrument of trust, the Plaintiff at most could only answer that the Father might not find it necessary.

77.I believe the points raised do not undermine P's case. We do not have detailed evidence regarding the circumstances under which the Grandfather chose how to distribute his properties to his grandsons. The factors influencing the Grandfather's decision at that time may well have been entirely different from those considered by the Father in this particular instance.

I.  ISSUE 2: WHETHER THE SUM WAS A LOAN OR A GIFT?

78.I also prefer the case of P to that of D on this issue.

79.I agree with P’s submission that there is substantial contemporaneous documentary evidence supporting P's claim regarding the loan. This evidence includes explicit and repeated admissions by D, acknowledging both the existence of the loan and his obligation to repay it. These admissions are documented in WhatsApp messages sent by D within a group comprising the Six Beneficiaries.

80.In the WhatsApp message dated 17 April 2020, D stated as follows:-

“B) 鄧明娣女士之銀行戶口現金

存入: $2329785.56 + $200000 (劉東海還款) = $2529785.56

…

劉東海$198588.9 - $200000還款 = $1411.1

…

現要求閣下於4/21前開出支票付給各承繼人，而劉東海亦同時歸還借款。” (emphasis added)

81.Similarly, in another WhatsApp dated 23 April 2020 sent under the name of D and Lok, it was stated that:-

“… 劉東海已經承諾扣回20萬借款 …” (emphasis added)

82.Finally, in the WhatsApp dated 24 April 2020, D stated:-

“3)劉東海承諾在分出的現金扣回20萬借款 …” (emphasis added)

83.P contends that it is significant that D chose to use the words “借款” and “還款” in the WhatsApp message. D could have used a more neutral term such as “款項” if it was not a loan.

84.During cross-examination D gave 2 explanations on his choice of words in the WhatsApp messages:-

(1)  He wanted to reach settlement quickly, and therefore used the wrong terms; and

(2)  His writing ability was very poor and he used the wrong terms.

85.P submits that the first explanation is unreasonable. Even if D had wanted to reach settlement quickly, he did not have to describe the sum as a loan. A desire to reach settlement quickly could not have been a “reason” to describe the sum as a loan. In fact, D could have insisted that that was not a loan, but he would nevertheless return it to the Estate in the spirit of reaching settlement (which would arguably put him in a better bargaining position to reach settlement). Further, D’s admissions in the WhatsApp messages were unconditional; they were not linked to P’s performance or compliance of any of D’s requests in return. Finally, it is worth noting that the WhatsApp messages were serious and formal messages sent to the Six Beneficiaries. They were not casual conversations.

86.P submits that the second explanation is a non-starter. Anyone with basic Chinese reading and writing abilities would know the meaning and effect of the terms “借款” and “還款” and can understand the difference between such terms and terms with a more neutral connotation such as “款項”.

87.I agree with the above submissions. I find that the Sum was in the nature of a loan, which D had acknowledged in the above WhatsApp messages.

88.On the other hand, I do not agree with P’s contention that D’s stated purpose of the sum for IVF expenses was obviously a lie in view of the relevant timeframe. P submits that even if D had immediately taken the money and applied for IVF on 27 September 2010, it is simply impossible that his child, Lau Ka Hei born on 19 May 2011, was a product of the IVF services after a mere 7 month and 22 days after the sum was advanced.

89.I agree with D that the relevant timeframe is not unreasonable in itself:-

(1)  D explained under cross examination that he had been attempting to have a baby by IVF since 2009, before he informed the Father;

(2)  He informed the Father in 2010 about his wish to have a baby and that he had already tried 6-7 times, and had spent over HK$1 million out of his own pocket. The Father then indicated his willingness to subsidize D.

(3)  D did not know whether the previous IVF had already succeeded at the time when he told the Father about the IVF attempts and before he received the Father’s subsidies. In any event, the Father was not paying for D and his wife to kick start the IVF attempt, but to subsidize D for the monies already invested by D on the IVF attempts.

J.  ISSUE 3: WHETHER P’S CLAIM FOR LOAN RECOVERY IS TIME-BARRED?

90.On the issue of time bar, P relies on s.23(3) and s.24(1) of the Limitation Ordinance (Cap 347) (“LO”) such that time does not begin to run until after the acknowledgment of the debt by D in writing in the aforesaid WhatsApp messages sent on 17, 23 and 24 April 2020.

91.S 23(3) LO provides:-

“Where any right of action has accrued to recover any debt or other liquidated pecuniary claim, or any claim to the personal estate of a deceased person or to any share or interest therein, and the person liable or accountable therefor acknowledges the claim or makes any payment in respect thereof, the right shall be deemed to have accrued on and not before the date of the acknowledgment or the last payment …”

92.S 24(1) LO provides:-

“Every such acknowledgment as aforesaid shall be in writing and signed by the person making the acknowledgment.”

93.WhatsApp messages inherently lack a physical "signature" from the senders. In this regard, I agree with P’s submission that the key is whether one’s name or mark is attached to it in a manner which indicates objectively his approval of the contents. Given that it is not in dispute that D sent those WhatsApp messages, there cannot be any dispute that he has approved of the contents before sending them.

94.Goodman v J Eban LD. [1954] 1 QB 550 contains a general definition of the word “signed” at 557:-

“…if reference is made to the Shorter Oxford English Dictionary, it will be found that the primary meaning of the verb “to sign” is not confined to actual writing with a pen or pencil. The word in origin appears to have related to marking with the sign of the cross. But the later meanings include “(2) To place some distinguishing mark upon (a thing or person)” and “(4) To attest or confirm by adding one’s signature; to affix one’s name to (a document, etc.).” It follows, then, I think, that the essential requirement of signing is the affixing in some way, whether by writing with a pen or pencil or by otherwise impressing upon the document, one’s name or “signature” so as personally to authenticate the document.”

95.In Good Challenger Navegante SA v Metalexportimport SA [2004] 1 Lloyd’s Rep 67, the English Court of Appeal was dealing with a substantively identical provision with s 24(1) LO under s.30(2)(a) of the Limitation Act (p 71). At p 72, the following passage was cited with approval:-

“As a matter of general principle, in my view a document is signed by the maker of it when his name or mark is attached to it in a manner which indicates, objectively, his approval of the contents. How this is done will depend upon the nature and format of the document. Thus in the case of a formal contract which prints the names of the parties and leaves a space under each name for the parties to write their names, the document will not have been signed by a party until he writes his name in the space provided. Conversely, with a telex, where there is no such facility, the typed name of the sender at the end of the telex not only identifies the maker but leads to the inference that he has approved the contents: the typed name, therefore constitutes his signature. Thus in my judgment each of the telexes relied on by the Claimant was signed by the sender typing in its name, or his name, at the foot of the document.”

96.The above passage was cited with approval and applied in Hong Kong in Hoie Sook Fong & Anor v Ismail Halima & Anor (unreported, HCA 1974/2006, 3 July 2007) at §18.

97.As a further illustration of the general principle, it was held in Neocleous v Rees [2020] 2 P&CR 4 at §§51-57 that auto electronic signature in an email also constitutes a signature in the context of a conveyancing transaction.

98.I have found above that D had factually acknowledged the loan in the WhatsApp messages, and hence, P’s claim for loan recovery is not time-barred.

K.  ISSUE 4: WHETHER P’S EQUITABLE CLAIMS ARE BARRED BY LACHES OR ACQUIESCENCE?

99.D argues that P’s claims for equitable remedy are barred by acquiescence and laches.

100.It is trite that the doctrines of acquiescence and laches are only applicable where it would be practically unjust to give a remedy. To maintain such a defence and obtain relief a defendant must have an equity which on balance outweighs the plaintiff’s rights: The Estate of Yang Sen-Hui & Ors v Pao Yuen Tung Hsing Yieh Co Ltd [1983] HKLR 124 at 145H-146C per Kempster J:

“The most helpful guide, in my view, is to be found in the speech of Lord Blackburn in Erlanger v. New Sombrero Phosphate Co. [1878] 3 App Cas 1218-

“In Lindsay Petroleum v. Hurd [1874] LR 5 PC 239, it is said-‘the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct done that which might fairly be regarded as equivalent to a waiver of it, or where, by his conduct and neglect he has, though perhaps not waiving that remedy yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases lapse of time and delay are most material. But in every case if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances always important in such cases are the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.’ I have looked in vain for any authority which gives a more distinct and definite rule than this; and I think, from the nature of the inquiry, it must always be a question of more or less, depending on the degree of diligence which might reasonably be required, and the degree of change which has occurred, whether the balance of justice or injustice is in favour of granting the remedy or withholding it. The determination of such a question must largely depend on the turn of mind of those who have to decide, and must therefore be subject to uncertainty; but that, I think, is inherent in the nature of the inquiry.”

Put in summary form by Lord Radcliffe when giving the opinion of the Judicial Committee in Anachuna Nwakobi v. Nzekwu [1964] 1 WLR 1019 : “Laches is an equitable defence, and to maintain it and obtain relief a defendant must have an equity which on balance outweighs the plaintiff’s rights.” Each case depends very much on its own facts.” (emphasis added)

101.In the present case, P submits that there is no delay in bringing these claims (or at least no delay to such an extent where the circumstances would make it inequitable for P to make such claims). On P’s case, there was an agreement at the Gathering that the Estate monies would be used as “necessity money” (應急錢) in case the Father needed it for emergency purposes (which they were in fact used as such). Hence there was a consensus at the time that the Estate monies would not be distributed until after the Father passed away. After the Father passed away on 1 January 2018, Kwong then suddenly became very ill in early 2019 and was diagnosed with malignant lymphoma (淋巴癌). He passed away on 13 December 2019 at the age of 63. As D admitted during cross-examination, it was only in April 2020 that D formally asserted his interest in the 2 Properties and the income therefrom. Hence it was at that point that P realized that he had no choice but to commence the present action to safeguard the interests of the Deceased’s estate on behalf of the Six Beneficiaries.

102.Given that the relevant matters pertain to a family dispute and noting that D only formally asserted his interest in the 2 Properties and the income therefrom in 2020, I do not find that there has been any delay on the part of P.

103.In any event, even if there has been any delay, such delay should not be significant enough to absolve D of his obligations. As explained in Patel v Shah [2005] EWCA Civ 157 at §33:-

“The effect of conduct by the claimants, which may properly be described as unconscionable, is to release a defendant trustee from the equitable trust obligation, which binds his conscience as the holder of the legal title for the benefit of others. In the case of an ordinary trust by way of gift to trustees for the benefit of the beneficiaries, where the beneficiary is not required or expected to do more than receive what has been given for his benefit, it will obviously be extremely rare for laches and delay on the part of the beneficiary to make it unconscionable for that beneficiary to assert his claim to the beneficial interest, or for the trustee to claim that he has been released from the equitable obligations that bind his conscience.” (emphasis added)

L. CONCLUSION

104.In my judgment, on balance, I find P’s case to be more credible than D’s. I accept P’s factual case as more likely to be true, and in case of conflict, I prefer the evidence of P’s witnesses to D’s.

105.In view of my findings on Issue 1, D has to render an account of the income he received in relation to the Car Park and the Land for Storage.

106.Regarding the Carpark, D’s case is that before the death of the Father in 2018, the income was received by the Father. On the other hand, D accepts that he has to account for profits to P himself (instead as the executor of the Estate) for the income after the Father’s death, even if D’s factual case is accepted.

107.P contends that there is no documentary evidence to prove D’s factual allegations.

108.Given that this situation involves a father and son, I do not find it unusual that there was no documentary proof available. On balance, I accept D’s case that that the income had been received by the Father before his death.

109.For the Land for Storage, there seems to be no dispute that D started to collect rent since April 2020.

110.The parties are to lodge an agreed draft order for approval reflecting my above findings within 14 days. In the absence of agreement, the parties are to lodge a joint letter with a draft order indicating which parts are agreed and which parts are disagreed, and the reasons for disagreement.

111.I also make a costs order nisi that the costs of the action should be paid by D to P, to be taxed if not agreed, with certificate for counsel.

112.Lastly, I thank all counsel for their helpful assistance.

Mr Joseph Wong, instructed by Leung Ki Hin & Co., for the Plaintiff

Mr Peter K.M. Chung and Ms Hannah Tang, instructed by Joyce Chan & Co., for the Defendant