Lau Sau Man also known as Mimi Leong v. Lau Yu Fun and Others
Read the full judgment text of HCA 3398/2016 on BabelCite. This High Court CFI judgment was delivered on 28 January 2026.
1. The plaintiff (“P”) Madam Lau Sau Man was 83 years old [1] when she gifted her properties in Hong Kong in August 2012 to the 1 st defendant Lau Yu Fun (劉汝寬) (“D1”) who is her younger brother. Some of those properties were later transferred to D1’s wife, the 2 nd defendant Tsang Wai Fan (曾惠芬) (“D2”) and D1 and D2’s son, the 3 rd defendant Lau Tsz Wing (劉子穎) (“D3”) (D1, D2 and D3 collectively as “Ds”). A few years later, P wanted the properties back. She therefore brought the present a
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HCA 3398/2016 [2026] HKCFI 113 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 3398 OF 2016 ________________________ BETWEEN
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________________________ J U D G M E N T ________________________ A. INTRODUCTION 1.The plaintiff (“P”) Madam Lau Sau Man was 83 years old[1] when she gifted her properties in Hong Kong in August 2012 to the 1st defendant Lau Yu Fun (劉汝寬) (“D1”) who is her younger brother. Some of those properties were later transferred to D1’s wife, the 2nd defendant Tsang Wai Fan (曾惠芬) (“D2”) and D1 and D2’s son, the 3rd defendant Lau Tsz Wing (劉子穎) (“D3”) (D1, D2 and D3 collectively as “Ds”). A few years later, P wanted the properties back. She therefore brought the present action against Ds. 2.P issued a writ with general endorsement against Ds in the present proceedings on 23 December 2016 on grounds based on breaches of fiduciary duties, misrepresentation, and/or conspiracy to defraud and dishonest assistance and/or knowing receipt (“the Writ”). 3.The statement of claim (“the SOC”) was filed and served on Ds 6 months later on 19 June 2017. The SOC was substantially amended some 6 years later and the amended statement of claim (“ASOC”) was filed on 26 July 2023. 4.A 4-day trial took place before me in February/March 2025, some 12 and a half years after the material events took place. B. BACKGROUND B.1 Undisputed / indisputable facts 5.The following facts contained in the Parties’ Joint Undisputed Facts (“Joint Undisputed Facts”) lodged with the Court on 13 January 2025 are not in dispute:-
6.It is further not in dispute that P executed the Will on 14 August 2012 at the office of Messrs Y S Lau & Partners (“YSL”). It is also not in dispute that P received the original copy of the Will before she left YSL’s office on that day. 7.Further, it is not disputed that other documents referred to in §9 of the Joint Undisputed Facts was executed by P on 21 August 2012 at YSL before a legal clerk of the firm by the name of Lee Cheuk Sum (李卓森) (“Lee”). His boss Mr Lau Yue Sum (劉汝琛) (“YS Lau”) was not in the office at the time when P executed the documents before Lee. 8.The PoA (Power of Attorney) referred to in §9 of the Joint Undisputed Facts was revoked by P by way of a statutory declaration on 13 October 2016. B.2 P’s Case 9.P’s case can be briefly summarised as follows. P did not intend to gift the properties referred to in §4 of the Joint Undisputed Facts (“the Properties”) to Ds[2]. False promise was made by D1 that he would help to manage the Properties[3]. Relying on such promise, she agreed to attend a solicitor’s firm of a familial relative, namely, YSL[4]. There, she gave no instructions to the solicitor, but somehow a number of legal documents was prepared for her to sign later. On 14 August 2012, she signed the Will upon being asked by D1 to do so “without being advised, informed or explained its purpose or its contents”. She only found out that it was a document purportedly to be her last will and testament after the commencement of these proceedings[5]. On 21 August 2012, she was asked to execute “a stack of documents” purportedly to appoint D1 as her agent. She was at YSL for no more than 15-20 minutes for signing papers[6]. She did not bother to read, or ask for an explanation from persons of the firm. She simply signed the documents[7]. Only after 4 years she realised that the signed documents were not something she actually intended[8]. She claims to be fundamentally misled. She now seeks to set aside all the transactions effected by virtue of those executed documents[9]. 10.P has pleaded the following causes of action in order to set aside the various transactions:
B.3 Ds’ Case 11.Ds’ case in gist is that P ordinarily resides in the US. She owned the Properties referred to in the Joint Undisputed Facts but worried that some of them might be subject to outstanding estate duties. She could not enjoy them herself and over the years she had had difficulty in receiving rental income of the Properties from her nephew and co-owner of the Locwood Flat Hui Siu Kwong (“Hui”). 12.In August 2012, she returned to Hong Kong for a visit. She stayed with D1 and D2 at their home. She told D1 that she wanted to have the Properties gifted to him, together with the estate duty liabilities attached thereto, so that she would no longer be troubled with those matters[10]. To give effect to her intention, she attended YSL as per D1’s recommendation[11]. She gave detailed instructions to YS Lau[12]. A number of documents were prepared by the firm in accordance with her instructions. 13.Specifically, the PoA was prepared pursuant to YS Lau’s advice, as an agreed/authorised mechanism for transferring the Properties as gift[13]. 14.When she met YS Lau, she told him that she would like to leave Hong Kong without an extended stay[14]. To cater for P’s plan, YS Lau advised her to make a PoA to D1 so that the transfer could be done by D1 on her behalf[15]. 15.All the legal documents were explained to P before she signed them. She was fully aware of the true legal effect of them. All the transactions in question were thus approved and authorised by P. B.4 Agreed List of Issues 16.Pursuant to the order made by this Court at the Pre-trial review (“PTR”) on 10 December 2024, the parties lodged with the Court the Parties Joint Agreed List of Issues on 13 January 2025 (“Agreed List of Issues”). 17.The following are the issues agreed by that parties which was lodged just over a month prior to the commencement of the trial:-
18.It should be noted here that whether the alleged gift of the Properties being a conditional and/or incomplete gift was never an issue in dispute between the parties, whether under the pleadings or Agreed List of Issues. C. DISCUSSION C.1 New and unpleaded issues raised by P 19.Based on the parties’ pleadings, the Joint Undisputed Facts and the Agreed List of Issues, the issues involved in this case at first appeared to be rather simple and straightforward. They did not involve any complicated legal arguments. The case principally is a factual dispute between the parties. At the end of the day, it really depends on which version of the events the Court would accept after hearing the evidence. However, somehow P and her legal team managed to turn this case into a rather technical and complicated one. Instead of trying to focus on the factual issues in dispute based on the Agreed List of Issues, P and her legal team tried to raise a few new (but unpleaded) issues at trial. This included (i) YS Lau has conspired with Ds together to defraud against P by falsifying the attendance note prepared by him on 14 August 2012 (“Attendance Note”); (ii) the argument that the signing of the PoA by P required 2 witnesses and therefore was invalid; and (iii) the gift of the Properties to D1 was a conditional and incomplete gift. 20.P had also tried very hard to oppose/prevent the production of the Attendance Note prepared by YS Lau prior to the commencement of the trial. YS Lau says that the Attendance Note was written by him immediately after the meeting with P on 14 August 2012 when instructions were taken from her. Without any direct evidence in support, P says that the Attendance Note was written by him subsequently in order to justify the events happened on 14 August 2012 and the documents executed by P on 21 August 2012. Again, without any direct evidence, P alleges that the Attendance Note at least was not in existence at the time when D2 made her affirmation in HCMP 1505/2014 on 27 March 2015[16]. In other words, P alleges that YS Lau has fraudulently made up the Attendance Note years later in order to conspire together with Ds to defraud against P. This was in fact put to YS Lau for the first time during cross-examination by P’s counsel without any proof at all. 21.The alleged requirement that the PoA needed 2 persons to witness was never pleaded but was put to YS Lau and Lee under cross-examination. However, regrettably, it was never followed up in P’s Closing. 22.As said, P’s counsel Mr Earl Deng, appearing with Ms Winky Wong, also very belatedly tried to raise the issue of incomplete/conditional gift which had never been raised nor pleaded by P in the ASOC or the amended reply (“AR”). It was mentioned for the first time under P’s Opening Submissions (“P’s Opening”). C.2 P’s Pleaded Case 23.In essence, P pleaded the following case against Ds:-
24.Thus, P says that none of the transactions were approved or authorized by her. She therefore sought to set aside the transactions. C.3 The 3 Main Issues 25.I think it is fair to say that P’s pleaded case against Ds based on the causes of action of fraudulent misrepresentation, conspiracy to defraud, breach of fiduciary duties, dishonest assistance and knowing receipt, lack of consideration and construction trust would fall or stand with whether the Court accept P’s evidence that Ds, especially D1, made any false misrepresentation to her on 13 August 2012 while she was staying with D1 and D2. In particular, whether the Court accepts P’s allegations that she was being misled into believing that she was only passing the management power of the Properties onto D1 and not as gift. This essentially would require the Court to look into and decide whether D1 had made those alleged misrepresentations to her as pleaded under the ASOC. For want of a better term, I would call this the Misrepresentation Issue. 26.This issue is closely related to what instructions, if any, were given by P to YS Lau on 14 August 2012 and the execution of the legal documents at YSL before Lee on 21 August 2012. I would like to call that the Execution Issue. 27.Obviously, the main defence of Ds is that the Properties were given by P to D1 as gift, some of which he subsequently transferred to D2 and D3 via different legal instruments. As said, P at the trial raised for the first time (without pleading the issue anywhere) that the gift was a conditional / imperfect gift. P says that even if P fails on the Misrepresentation Issue and the Execution Issue and that Ds manage to prove that the Properties were given to D1 by P as gift, the gift was subject to the condition that D1 have to pay the estate duties on the Properties first. Since D1 has failed to pay the estate duties, the condition of the gift has not been satisfied. The gift is therefore incomplete and Ds have therefore failed to prove their defence based on gift. I shall call that the Gift Issue. C.3.1 Relevant Legal Principles 28.Before delving into the evidence, I would like to briefly set out the legal principles on (i) the different causes of action relied on by P in the ASOC which included fraudulent misrepresentation, conspiracy to defraud, breach of fiduciary duties, dishonest assistance & knowing receipt, lack of consideration and constructive trust; (ii) the law on gift; and (iii) how the Court would assess the evidence in a case where witnesses are trying to solely rely on their memory to recall some undocumented conversations which took place a long time ago. C.3.2 Legal Principles on P’s Different Causes of Action 29.Mr Deng has summarised the well-established legal principles for the different causes of action relied on by P in the AOSC. They appeared in P’s Opening. Those principles are not seriously disputed by Ds’ counsel. I have highlighted some of them below for ease of reference. C.3.3 Fraudulent Misrepresentation 30.The principle of fraudulent misrepresentation is well-established. In Chan Ching Ho Owen v Poon Yuk King (unreported, DCCJ 1802/2012, 28 November 2014), this Court held as follows:-
31.P acknowledges that she faces a high threshold to prove that she had been misled when executing all the documents on 21 August 2012 (“the Executed Documents”). C.3.4 Conspiracy to Defraud 32.In Pido v Compass Technology Co Ltd [2010] 2 HKLRD 537, §§13-17, Ma CJHC (as the CJ then was), set out the essential elements of a claim based on conspiracy:
33.In addition to all the misrepresentations and knowledge of falsity set out in the misrepresentation cause of action, the following particulars for conspiracy are pleaded by P against Ds:
C.3.5 Breach of Fiduciary Duties 34.In Bristol & West Building Society v Mothew [1998] 1 Ch 1, p.18, Millett LJ identified four facets of the core obligation of the fiduciary, which is “single-minded loyalty” to their principal. These are (1) fiduciary must act in good faith; (2) he must not make an unauthorized profit out of his trust; (3) he must not place himself in a position where his duty and his interest may conflicts, and (4) he may not act for his own benefit or the benefit of a third person without the informed consent of his principal. 35.Where, in any transaction, an attorney (agent) has benefited himself without the express approval or consent of the donor (the principal), the transaction is not void, but merely voidable: see Lo Tai Yam v. Hu Mu Simon [1997] HKLRD 588, at 592 per Stone J. 36.Further, in Bristol and West Building Society, supra, Millett LJ said at 18:
37.In Tito v Waddell (No 2) [1977] Ch 106, Megarry VC noted, “the self-dealing rule is (to put it very shortly) that if a trustee sells the trust property to himself, the sale is voidable by any beneficiary ex debito justitiae, however fair the transaction.” 38.P’s case for breach of fiduciary duties has been pleaded in ASOC §§17-18. C.3.6 Dishonest Assistance & Knowing Receipt 39.Both dishonest assistance and knowing receipt are pleaded against Ds. P says that both are equitable wrongs but are not identical. Dishonest assistance is an accessory equitable wrong whereas knowing receipt is not a form of accessory liability but has been described as “an equitable analogue of the tort of conversion because it is a proprietary wrong concerned with interference with equitable proprietary rights”, see Byers & Ors v Saudi National Bank [2024] 2 WLR 237 at §148, 151 per Lord Burrows. C.3.6.1 Dishonest Assistance 40.The requirements for dishonest assistance is fourfold, namely:-
41.P allegedly has pleaded all the necessary elements at ASOC §20 to hold D2 and D3 liable as accessories, namely:-
C.3.6.2 Knowing Receipt 42.Knowing receipt is where:
43.P allegedly has pleaded all the necessary elements at ASOC §20 to hold D2 and D3 retained properties in which P had an equitable interest, which were obtained in breach of trust:-
44.D2 has admitted to having knowledge of all the relevant events, including how the Properties were transferred into her name without consideration. Therefore, as against D2, the issue is whether P’s intention was to gift her Properties to Ds’ family or simply only to D2. 45.As for D3, he claims that he does not know the details of any arrangements and just signed as his father informed him that his aunt wanted to gift the Properties to their family. C.3.7 Lack of Consideration 46.The principles on a total failure of consideration are trite. A consideration must (1) be either a new benefit to the promisor or new detriment to the promisee (see §6-003, 6-004 of Chitty on Contracts (General Principles) 35th Edition), (2) be sufficient and need not be adequate (see §6-015 of Chitty), (3) not be in the past (see §6-029 of Chitty), and (4) move from the promisee at the promisor’s request (see §6-006 of Chitty). 47.In the present case there is no dispute that there was no consideration paid as the defence is that the assignments of all the properties were an intervivos gift conditional on settlement of P’s estate duties liabilities: (Joint Undisputed Facts §11). 48.Therefore, if the Court finds that there was no lawful gift, then it invariably follows that all the assignments made in favour to D2 and D3 are liable to be rescinded and/or set aside for lack of consideration or the proceeds are to be held on constructive trust for P as the donor of the PoA has clearly revoked the PoA and is entitled to change her intention at any time. C.3.8 Constructive Trust 49.The claim pleaded at ASOC §§26-30 is that P is entitled to the proceeds of properties and rental income from all of her properties which D1 admitted that he was receiving rent on. 50.The fallback is that even if she is not entitled to the entire period, she is entitled for the period up to the dates in which the respective properties were assigned. C.3.9 The Law on Gifts 51.In Ng Kit v Wu Tsun Hua & Ors [2021] HKCFI 877, DHCJ Paul Lam SC, after taking into account of Young Kin Kenneth, the Executor and Trustee of the Will of Yang Shen Sum, deceased v Lau Lan Fong Nancy, HCA 1545/2004 (6.9.2006, unreported); Halsbury’s Laws of England (5th ed., 2014), vol. 52, §§201-270; and In re Cole, a bankrupt [1963] 1 Ch 175, summarized the relevant principles on the law on gifts at §33 as follows:-
52.I find the above passage helpful and would respectfully adopt the principles stated therein. 53.As said, the issue of the alleged gift of the Properties to D1 being a conditional gift / imperfect gift was raised by P for the first time under P’s Opening. P submits that she does not need to amend her pleadings in order to attack Ds’ own case as Ds have the burden to prove that the so called gift was valid and perfected. Further, P says that Ds are not prejudiced. 54.I shall deal with the laws on conditional gifts and incomplete gifts in the later part of the judgment when I discuss the Gift Issue. C.3.10 The law on assessing undocumented conversations evidence based on memory 55.This case involves some important conversations between P and D1 in the presence of D2 on or about 13 August 2012 when P stayed at D1 and D2’s home. There was no notes or documents which recorded those conversations. It was not until years later that the parties tried to recall those conversations: first in the pleadings in 2016, later in their witness statements (“WS”) in 2020; and lastly in the witness box during the trial in 2025. P’s case depends almost entirely on her memory. What makes it more difficult in this case is the fact that both P and D1 are in their 90s by the time when they gave evidence in court. They essentially are trying to remember some conversations during one summer morning over the breakfast table more than 12 years ago. Inevitably, both of their evidence insofar as they are purely relying on their memories on those conversations, without the aid of any contemporaneous documents in support, are inconsistent, confusing and unreliable. This also applies in the case of D2 who is now in her 80s and who is apparently not in good health. 56.Thus, how the Court deals with such evidence is important. I find a great deal of assistance from the judgment of Yu Man Fung Alice v Chiau Sing Chi Stephen [2020] HKCFI 2923, unreported, (23.12.2020; Coleman J) where the Court dealt with a similar situation and stated the following:-
57.Based on the principles laid down in the above case, in such situation, any contemporaneous documents, as well as known or probable facts (in particular objective facts) would be preferred than to rely on the witnesses’ individual recollections of what was said in conversations: See also Macau First Universal International Limited v Ding Xiao Hong, unreported, HCA 992/2010 (20.8.2014; Au-Yeung J) at §§48-52. 58.Further, in my judgment, in such cases, evidence from independent witnesses who have no vested interests in the outcome of the case would become more important and pertinent than to merely rely on the memory of the interested parties. C.4 Assessment of the Parties’ Factual Witnesses’ Evidence 59.In this case, when considering the parties’ key witnesses evidence, I have taken into account of the fact P was 83 years old at the time when the alleged fraudulent misrepresentations were made by D1 to her. D1 was about 6 years younger than her. By the time of trial, P has just turned 96. D1 was 90 and D2 was 83. 60.As I have observed during the trial, all of them were not in good health. Their mind was clearly not sharp nor clear. They all have difficulties in recalling the precise conversations which took place more than 12 years ago. Their thinking and recollection of the was clearly confused and muddled. They often mumbled words to themselves while being cross-examined. They all were readily willing to agree to suggestions made to them by counsel on the other side during cross-examination. Overall, in my view, all these 3 elderly witnesses gave rather confusing, inconsistent and unreliable accounts about the conversations which took place on 13 August 2012. Their oral evidence also departed from their pleaded case and WS in material aspects. In P’s case, they were completely contradictory to the Attendance Note written by YS Lau on the day after those conversations and the subsequent Executed Documents prepared by YSL on her behalf and signed by her a week later. 61.Thus, I do not think it is safe for the Court to purely rely on the 3 elderly witnesses’ memory on the unrecorded conversations which took place over 12 years ago as the foundation of any factual findings in this case. I prefer to rely on the contemporaneous documents like the Attendance Note, the Will and the Executed Documents. In my view, they are objective evidence which more likely able to reflect the true intentions of the parties at the time. I also would give more weight to the evidence of YS Lau and Lee who have no vested interests in the outcome of this case as they have in my view provided a more cogent and logical account of what took place in the meetings at the office of YSL on 14 and 21 August 2012. More importantly, their evidence is entirely consistent with the contemporaneous documents. 62.As said, I consider that P’s case based on the various causes of action against Ds stands or falls with P being able to successfully establish the alleged fraudulent misrepresentations made by D1. They will be dealt with under the Misrepresentation Issue. The other claims like the alternative case for income and rents from DD115 Land and Section B of Lot 667 of Property II, which was introduced under the ASOC some 5 years after the SOC was served, was relatively minor and unimportant. P’s counsel reliance on the unpleaded issue of “conditional gift” only came very late in the day during the trial only. I shall deal with those issues separately under different headings. C.5 The Misrepresentation Issue 63.P’s claim of fraudulent misrepresentation against D1 and conspiracy to defraud with D2 & D3 can be found in §§6-7 of ASOC. The passages underlined below did not appear in the SOC and were added in July 2023 when the SOC was amended and become the ASOC:-
64.As mentioned, the main problem with P’s above pleaded case is that the alleged conversations on 13 August 2012 were not recorded anywhere and that there was no corroborating evidence that the alleged misrepresentations were ever made by D1. Thus, P’s case on the alleged fraudulent misrepresentation depends entirely on the accuracy of her recollection of the undocumented conversations more than 12 years ago. This is to be contrasted with the contemporaneous Attendance Note taken by her solicitor YS Lau, when P attended the office of YSL on the next day. It shows exactly the opposite as what P now claims under the ASOC. The Attendance Note is totally in line with Ds’ case that P intended to gift the Properties to D1 and his family members. C.5.1 P’s Evidence 65.As highlighted by Ds’ counsel Mr Leo Wong in Ds’ Closing Submissions (“Ds’ Closing”), P’s account on the alleged misrepresentation is full of inconsistencies. 66.As pleaded in the ASOC, allegedly, D1 made the representation to P that it would be “better off for someone to manage all her properties” in Hong Kong and that he would take care as her agent in Hong Kong of everything including “all the expense and estate duties”: §§7 of ASOC. 67.In P’s WS dated 29 September 2020, which contents were adopted as part of her evidence when she testified at trial, her case changed considerably in that she alleges that D1 only represented to her that he would help P to manage the “Yuen Long Flat” only: (§§22-27 of P’s WS). Nothing was mentioned about requesting D1 to manage her other Properties. 68.The allegation that P and D1 had talked about adding his daughter’s name to the Yuen Long Flat as joint tenants only appeared for the first time in P’s WS (which was filed in September 2020), long after the SOC was filed. This is in contrast to all the pre-2020 documents filed on behalf of P in various proceedings including the original SOC, the statutory declarations and the affirmations made in HCMP 1505/2014, this account was never mentioned. Before that, P’s stance had all along been she had no intention of making any gift to D1 or his family members at all. 69.However, the above is very different from the account she gave at trial. During cross-examination, P was taken to §23 of her WS where she did not mention about how D1 responded when she made the suggestion that the daughter’s name be added to the Yuen Long Flat. P replied that she only told D1’s daughter her intention in private when D1 was not present. She had not told D1 her intention regarding the joint tenancy of the Yuen Long Flat at any time. 70.When asked about exactly how D1 had misrepresented to her regarding the handling of the Properties, the only short answer that P managed to give was she had asked D1 to help with the management (of the Properties) (“我叫佢打理囉”). She did not give any further details as to what representations D1 might have made to her which was considered as untrue and/or fraudulent. 71.This answer of her requesting D1 to manage the Properties on her behalf then became P’s “central theme” in her evidence as she had repeated this phrase multiple times as if she was reading it out from a prepared script. When it was suggested to her that the answer given by her was too vague and general and whether she really understood the detailed accounts she gave in her WS, P replied that she could not remember (“唔記得”). 72.When the only paragraph in her WS which contained the allegations of misrepresentation (§25) was read to her under cross-examination, P appeared to be confused and hesitated to confirm that it represented her understanding. 73.When asked to explain why estate duty was a relevant issue to the Yuen Long Flat, she could not give any satisfactory answer. 74.Most importantly, P was not able to explain in her evidence, why when her intention was for D1 to manage her Properties only, she was willing to sign all the Executed Documents subsequently at YSL which, according to YS Lau, was allegedly prepared according to her instructions. 75.Another matter which does not support P’s case of misrepresentation is the fact that she had brought with her the original title deeds of some of the Properties (together with some other copied title deeds) when she met D1 at his home. They were shown to D1. Subsequently, those title deeds were handed to YS Lau at YSL’s office. In my view, the handing over of the original copies of the title deed of the Properties is not consistent with P’s case that she had only intended D1 to manage the Properties for her and not as gift. 76.Overall, I find P’s evidence on the Misrepresentation Issue vague, confusing and inconsistent. They fell far short in establishing the very serious allegations and high threshold of fraudulent misrepresentation and conspiracy to defraud made against Ds under the ASOC. 77.In the circumstances, I have no hesitation to dismiss P’s case on this issue based on her far from satisfactory evidence which was solely based on her memory of the conversations she had with D1 on 13 August 2012 without any contemporaneous documents in support. 78.Likewise, her claims based on the causes of action of breach of fiduciary duties, dishonest assistance and knowing receipt, lack of consideration and construction trust, which entirely depends on whether her evidence on the undocumented conversations would be accepted, must fail also. C.5.2 Raymond Cheng’s Evidence 79.Raymond Cheng (PW2) who accompanied P for the visit to Hong Kong from US in August 2012 was not present during the undocumented conversations between P and D1 on 13 August nor was he present at YSL’s office when P attended the office of YSL on 14 and 21 August. Thus, his evidence does not assist P’s case in any way. C.5.3 D1’s Evidence 80.While I find D1’s evidence at times was confusing and not consistent, particularly when it comes to the land properties inherited from their grandfather and pass onto P via Lau Yee Pang (“LYP”), one of the most important matters that he was able to maintain throughout his evidence consistently is the fact that during the undocumented conversations on 13 August 2012, P said to him that she wanted to give the Properties to him. It was according to those understanding that he had contacted YS Lau and arranged the meeting on the next day with P at YSL’s office. 81.Another thing which D1 was adamant throughout his evidence is the fact that he disagreed with the suggestion that P had only asked him to manage the Properties rather than passed them to him as gifts. On this part of the evidence, I find D1’s evidence remained unshaken and consistent throughout. Most importantly, on this crucial part of his evidence, his case is entirely supported by the contemporaneous documents like the Attendance Note, the Will and the Executed Documents. They are also supported by the evidence of YS Lau and Lee who are not parties to the case and have no reason to lie about their involvement. 82.As to the “condition” that he has agreed to pay the estate duties of the Properties, D1 has never denied this either in his WS or evidence. I shall come back to this matter when I discuss P’s unpleaded case of conditional / incomplete gift below. C.5.4 D2’s Evidence 83.Equally, I find D2’s evidence not entirely satisfactory as she at times appears to be confused and not clear about what were asked of her. It is also clear from her answers under cross-examination that she was not able to remember details of the conversations which took place between P and D1 on 13 August 2012. But on the crucial issue of whether the Properties were given to D1 / her as gift, D2 was very clear and remained consistent throughout her evidence that they were so intended by P. C.5.5 D3’s Evidence 84.It has been agreed by both sides that D3’s evidence is brief and of limited relevance. He clearly has never made any representation to P or did he know what took place between P and D1/ D2 at their home on 13 August 2012. He only found out from his parents at a later date that P had wanted to pass the title of Land 115 to his name. It was done through D1 by using the PoA. He was asked by his father to go to the solicitors’ office to complete the assignment in July 2013. Hence, D3’s evidence is inconsequential to the outcome of this case. C.6 The Execution Issue 85.Fortunately, my factual finding in this case does not need to depend on P’s memory (or that of D1 and D2’s for that matter) on the undocumented conversations on 13 August 2012 as the events which subsequently took place at YSL on 14 August 2012 and the Excuted Documents signed by P at YSL on 21 August 2012 have, in my view, clearly demonstrated the true intention of the parties at the time. I find that they are contemporaneous documents which came into existence as a result of the instructions given by P to YS Lau on 14 August at YSL’s office. C.6.1 Events happened at YSL’s office 86.It is not in dispute that P had visited the office of YSL twice in August 2012. First time was on 14 August when she went there with D1 and D2 where instructions were taken by YS Lau from her. Second time was a week later on 21 August (also with D1 and D2) when she was attended by Lee, a very experienced legal/conveyancing clerk who worked in YSL. On that occasion, P signed and executed a number of legal documents prepared by Lee on the direction of his employer YS Lau. 87.It is also not in dispute that the handling solicitor YS Lau was someone known to P as he was a distant relative of P and D1. However, at that time P had not met YS Lau for over 20 years. Thus, P gave YS Lau a red packet when they met again on 14 August 2012 as was customary for people of her age to do. 88.While the account given by P and Ds’ witnesses (in particular YS Lau and Lee) as to what happened at YSL’s office might be different, there are a number of contemporaneous documents which came into existence at or around that time which tell a more consistent story. They included (a) the Attendance Note prepared by YS Lau after instructions were taken by him from P; (b) the Will prepared by YS Lau according to P’s instructions on 14 August 2012; and (c) the Executed Documents signed by P on 21 August 2012. 89.In my view, the above contemporaneous documents directly contradicted P’s case of fraudulent misrepresentation and/or conspiracy to defraud, etc. On the other hand, they are entirely consistent with Ds’ case that the Properties were given by P to Ds by way of gift. C.6.2 The Attendance Note 90.In my judgment, the 2-page handwritten Attendance Note prepared by YS Lau (which was written in English) is a very crucial piece of evidence in this case. It recorded down the background to the case and the alleged instructions given by P to YS Lau at the meeting on 14 August 2012. YS Lau testified that it was written by him immediately after the meeting he had with P. It stated clearly the date and time of when the meeting started (at 3:30 pm) and when did it end (at 4:30 pm). It also recorded down the follow-up actions YS Lau took and the instructions he gave to his staff subsequent to the meeting. 91.I think it is worth setting out the entire contents of the Attendance Note in full here due to its importance:-
92.P, through her legal team, disputed that the Attendance Note was prepared by YS Lau contemporaneously and/or immediately after the meeting. P boldly claimed (without any evidence in support) that the contents of the Attendance Note were made up by YS Lau years after the meeting and it was a fabricated document. 93.Through her counsel Mr Deng, P made the very bold (but bald) assertion in court when YS Lau was being cross-examined by him that the witness lied about this whole event and made up the Attendance Note in order to conspire together with Ds against P. Regrettably, such serious accusation made against an experienced solicitor was never pleaded by P in the ASOC or the AR. The closest it got to any wrongdoings on the part of the solicitor suggested in the pleadings is the averment that YS Lau and D1 was “on the same side of the internal conflict between the Lau family members”: (See AR §14). 94.I should note here that P’s former solicitors (Messrs Cheung & Liu) had inspected the original copy of the Attendance Note back in December 2020. Nothing suspicious was found. Nonetheless, P revived such unfounded allegation against YS Lau at the PTR before me in December 2025 and has since relentlessly tried to challenge the authenticity of this document. Further, P and her lawyers tried multiple times to exclude a copy of the Attendance Note to be included in the trial bundle. Yet each time the challenge was proved to be unsuccessful. But that did not stop P and her legal team to ask for the inspection of the original document just prior to the trial. Again, nothing suspicious was found. 95.The Court has had the opportunity to examine the original copy of the Attendance Note (“Exhibit D-1”) during the trial. The 2-page document was written on some “recycled” photocopied papers showing certain pages of an old edition of the White Book (pp 240-242 on the discussion on Order 14 at §§14/4/10 to 14/4/14). In my view, it will not be difficult for P’s legal team to find out which edition of the White Book it was and whether that edition existed at the time when YS Lau said he wrote the Attendance Note. Yet nothing was said about this during the trial or at any time at all despite the repeated attempts to inspect the original of that document. 96.Despite of all the above, P still insisted to challenge the authenticity of the Attendance Note during the trial. At the end, those attempts proved to be futile. C.6.3 YS Lau’s Evidence 97.The extremely tenuous basis which P’s counsel suggested YS Lau was part of the conspiracy is based on an affirmation filed by D2 in HCMP 1505/2014 on 31 March 2015[17]. There, D2 stated that P offered to sell her 50% share in Locwood Flat to her at HK$1.5 million. D2 said she found the price was good, so she agreed to buy. 98.It was put to YS Lau that, because he was the handling solicitor for D2 in those proceedings, and had the Attendance Note existed, he would not have helped/allowed D2 to make the above allegation which was untrue as a matter of fact. 99.YS Lau disagreed. He said that when the affirmation was prepared, he knew and remembered clearly that P intended to gift all the Properties in Hong Kong (including the Locwood Flat) to Ds. Therefore, there was no need for him to refer to the Attendance Note. 100.He also did not consider the statement made by D2 being untrue. The relevant sale and purchase agreement and assignment relating to the transaction expressly provided for a consideration of HK$1.5 million. Therefore, the position stated in the affirmation was consistent with the conveyancing documents. 101.I agree with the following submissions made by Ds’ counsel that YS Lau was justified to take such a view:-
102.In any event, as a matter of logic, I simply cannot see how the wrongly stated consideration of HK$1.5 million of the Locwood Flat in D2’s affirmation filed in March 2015 could prove that the Attendance Note did not exist at the time when D2 made the affirmation and that it must be a subsequent fabrication. In my view, the two matters simply do not have any direct connection at all. 103.I have the benefit of hearing the oral evidence given by YS Lau in court. He is a very experienced solicitor in his 70s. He is a partner of the law firm which bore his own name and of which he has been running for many years. He gave his evidence in a direct and no nonsense manner. He has not tried to avoid any difficult questions put to him by P’s counsel during cross-examination. He also tried to explain why the Executed Documents were prepared in such a manner as he did, given P’s specific instructions that she wished to leave Hong Kong as soon as possible and did not want to return again for “gifting the properties”. While with hindsight one may criticize the way the gift was effected, there is nothing in YS Lau’s evidence which suggests to me that he was doing anything other than trying his best to carry out his job as a solicitor professionally by strictly following the wishes and instructions of his client, namely, P. Further, there is no evidence to suggest that he or his firm would receive any financial benefit other than the usual fees they would charge for the conveyancing transactions. I simply cannot imagine that he would risk losing his professional reputation (and possible livelihood) to conspire together with Ds to try to defraud P by making up the Attendance Note in a relatively minor and ordinary conveyancing transaction. In my judgment, that is highly improbable. 104.I find this whole episode most unfortunate as very serious accusations have been made by P through her counsel against a very experienced solicitor when there was nothing but pure conjectures to support such grave accusations. It is most regrettable that P’s counsel saw fit to make those unpleaded and unfounded accusations against a solicitor in court when there was no tenable basis to do so. 105.In the aforestated premises, I find the Attendance Note was written by YS Lau on 14 August 2012 on the occasion when P attended his office. There is no doubt in my mind that the Attendance Note has accurately recorded the instructions given by P to him and his firm at the time. As a result, legal documents were prepared according to those instructions. In my judgment, based on the contents of the Attendance Note, there is no question that P had intended to gift the Properties to Ds at the time. There is also no doubt in my mind that P has subsequently changed her mind. This explains why she and her legal team had tried so hard to exclude the Attendance Note from the evidence prior to the trial. In my view, those futile attempts and the serious allegations made against YS Lau were both unnecessary and uncalled for as it is beyond any shadow of doubt that the Attendance Note was genuine and it has accurately reflected P’s true intention to gift the Properties in Hong Kong to D1 and his family at the time. 106.Of course whether things could have done better or more direct, like by using a deed of gift, instead of using the PoA and other legal instruments, is up for debate. But it was a judgement call made by YS Lau at the time, based on the specific instructions from P that she wanted to effect the gift of the Properties to D1 as soon as possible and before she left Hong Kong for the US. However, what P cannot do is try to “undo” the gift by making the unfounded allegation that the Attendance Note was a fraudulent document. C.7 The Will 107.When P first attended YSL’s office on 14 August 2012, she executed the Will which was witnessed by YS Lau and one Ms Yeung who was a clerk working for YSL at the time. Under the Will, she bequeathed all her Properties in Hong Kong to D1 and D3 in equal shares. D1 and D3 were also named as co-executors of the Will[18]. 108.P received the original copy of the Will before she left YSL on that day. 109.YS Lau stated in evidence that he had prepared the Will according to the instructions given by P. P on the other hand said that she had no idea what was stated in the Will. She even claimed that she did not know what the word “will” mean and what that document was about. 110.I do not accept P’s evidence on this at all. As testified by YS Lau, P was a relatively healthy and robust 83 years old at the time when she made the Will back in August 2012. By that time, she had already lived in the US for over 40 years. She also had an office job that required her to use basic English. She said she could read newspapers in English. It is therefore most unlikely that she did not even know the meaning of the word “will” as an instrument of testamentary disposition when she signed the document at YSL on 14 August 2012. 111.Significantly, although the 2-page Will was written in English, there was a signature clause at the end which P had placed her signature next to. It specifically stated that following:
112.Underneath the above clause, besides the signatures of YS Lau and Ms Yeung, the clerk at YSL who had witnessed the signing of the Will, there was an additional signature of YS Lau under the words “INTERPRETED by:-”. That means the contents of the Will had been interpreted by YS Lau to P. I do not believe that YS Lau would put his signature to the “interpretation clause” if he had not in fact interpreted the contents to P, bearing in mind that it was witnessed by his clerk Ms Yeung. 113.I simply do not see how P can now argue that she did not know what she was signing when she put her signature in the Will next to the signature clause. 114.More importantly, P agreed that the original copy of the Will was provided to her on 14 August 2012, the date she executed the document. However, it took more than 4 years for P to come to court to claim that the Will did not reflect her true intention. She failed to provide any plausible explanation as to why it took her all that time to dispute the unequivocal contents of the Will. No attempts were ever made to try to reconcile her case (that she did not intend to gift the Properties to D1) with the contents of the Will which she had signed. There was simply no mention of the Will in her WS. 115.In the circumstances, I find the Will executed by P on 14 August 2012 has accurately reflected her true intention at the time that she wanted to gift the Properties to Ds. C.8 The Executed Documents 116.In my judgment, the Executed Documents also support Ds’ case that P had intended to gift the Properties to Ds, in accordance with the instructions of P as accurately recorded by YS Lau in the Attendance Note. 117.For example, the notices to sever joint tenancy in the Locwood Flat with Hui were in line with YS Lau’s advice (as recorded in the Attendance Note) so as to allow D1 to deal that particular property. 118.The S&P agreement, confirmation and assignment relating to the Yuen Long Flat reflected the scheme of making an unconditional gift of that property by P to D2. 119.It is important to note that P had put her signature on all the Executed Documents on 21 August 2012 when she attended YSL’s office for that purpose. This shows that P must have intended to gift all the Properties to Ds as she had instructed YS Lau to do in their meeting on 14 August 2012. 120.However, P now says that she did not know nor approve the Executed Documents. She alleges that she was misled as to the effects of the documents she signed. 121.In the ASOC, P alleges that no one from YS Lau or D1 has ever explained or interpreted the contents of the executed documents to her when she signed and executed them at YSL on 21 August 2012. She did not ask any question because she relied on and believed D1’s representation that the documents were for the purpose of facilitating the management of the Properties and that she had full trust and confidence in D1 as he was her brother and YSL was run by a distant relative: (§8(b)-(c) of ASOC). 122.In P’s WS, she claims that Lee did not explain anything about the documents to her. It was D1 who told her generally that documents she signed would allow him to manage the Yuen Long Flat and it would automatically transfer when she passes away: (§29(2) of P’s WS). 123.However, in her oral evidence, P said that D1 was not present when the Executed Documents were signed. C.8.1 Lee’s Evidence 124.It is clear that P’s evidence on the execution of documents was in direct conflict with those given by YS Lau and Lee. 125.YS Lau in his WS stated that before P signed the Executed Documents on 21 August 2012, Lee had explained the contents of each of those documents to P and the legal effects of them. P had no question about them before she signed. 126.Lee in his WS stated how he had personally handled the conveyancing matters after receiving instructions from his boss YS Lau on 14 August 2012. He had only briefly met P on 14 August 2012 at the end of his boss’s meeting with P, D1 and D2. Lee had never met P prior to that date. 127.Lee said on 21 August 2012, he was the person who had attended P, D1 and D2 as YS Lau was out of the office. After settling them down at a small conference room, Lee went back to his seat to fetch the file. Because P said she needed to go back to the US after dealing with the Properties, she told Lee that she had already instructed YS Lau to prepare the PoA for her to appoint D1 as her attorney. Even though Lee had prepared the PoA prior to the meeting in accordance with the direction of his boss, Lee took the trouble to explain the two types of PoA to P. For the general PoA which Lee had prepared for P, Lee explained to her that this would give tremendous power to the attorney and she should appoint a person whom she has complete trust to fill that role. Lee emphasized to P that the attorney can sell, mortgage, rent out and gift any of her Properties as he likes once the PoA is signed. 128.P replied to him that D1 was her close family member of whom she has complete trust. Lee then explained in details the legal effects of the PoA to her: (Lee’s WS §5). 129.Lee also explained the contents of the S&P agreement, the notice of severance, the purported consideration to the transfer (even though between P and D2 it was in fact a gift) and other details of the legal documents to both P and D2. They both acknowledged that they understood the contents before they signed them: (Lee’s WS §6). 130.Lee was also very cautious when asking P to execute the PoA as he recognized that it was a very important document. Hence, he asked a solicitor by the name of Shum Kwan Ming (岑君銘) (“Shum”) who was working at YSL at the time to witness the signing. Lee knew Shum was a very meticulous lawyer. He heard Shum explained the contents of the PoA to P and asked if she understood them before inviting P to sign on the document: (Lee’s WS §10). 131.Despite the lengthy cross-examination by P’s counsel, I find Lee’s evidence remained unshaken and cogent. As a legal clerk with experience of almost 50 years (he has worked as a legal clerk in different solicitor firms since 1976 and has been with YSL since 2005), I have no reason to doubt any part of his evidence when it comes to how he had prepared the PoA and the other Executed Documents. I also have no reason to doubt that he had carefully and meticulously explained the contents of all the legal documents to P before she signed them. The fact that Lee had taken the trouble to ask Shum to witness the signing of the PoA and have it explained to P one more time demonstrates to me that Lee was a very cautious and conscientious clerk. I accept that the execution of the documents, including the explanations given by Lee and Shum, took slightly more than an hour as testified by Lee. I do not accept that it only took 10 to 15 minutes as claimed by P in her evidence. As Lee has no vested interests in the transactions between P and Ds (and none was suggested to him during cross-examination), there is no reason why Lee would lie about what took place on 21 August 2012 when P executed the PoA and other legal documents. I simply do not see any reason why Lee or his firm would act without following P’s instructions and would act directly against her interests. 132.In conclusion, I find it is inherently improbable that YS Lau and Lee would have conspired with Ds together to defraud P. I find that has never happened and was mere unfounded accusations made up by P and her legal team in order to try to get her out of the gift she made to Ds in August 2012. I therefore have no hesitation to reject P’s case on the Execution Issue and accept the evidence given by YS Lau and Lee. C.9 The Gift Issue C.9.1 Taped telephone conversation between P & D1 in August 2016 133.Besides the above documents, another important piece of evidence which indicates P’s intention at the material time when the gift was made is a taped telephone conversation adduced by P. According to P, the conversation took place in or around August 2016, just a few months before the Writ was issued. 134.The following extracts from the transcript of the taped conversation in my view has demonstrated the clear intention on the part of P that she had intended to gift the Locwood Flat to D2 as of that time, ie 4 years after the August 2012 conversations at D1 & D2’s home:
135.In fact, P has unequivocally confirmed the above in her evidence when cross-examined by Ds’ counsel Mr Wong during the trial:-
136.Given the above, I do not see how it can still be argued that P did not intend to gift the Locwood Flat to D2 in 2012. C.9.2 The unpleaded case of conditional Gift 137.Given the dire lack of any credible evidence to prove her case against Ds, in another desperate attempt made by P, P’s counsel has, very belatedly under P’s Opening, introduced the unpleaded case of conditional gift / imperfect gift. 138.First, I would like to point out the fact that this new issue of conditional / imperfect gift was never an issue in dispute between the parties before the unexpected mention of it in P’s Opening. It was not pleaded in the P’s reply or AR after Ds had made clear of their main defence is that the Properties were gift from P. The allegation that the gift was subject to a condition and/or was an imperfect one was not mentioned in the Attendance Note or any of the Executed Documents prepared on her behalf by YSL. It was never mentioned in P’s own WS. It was never an issue identified and agreed upon by the parties under the Agreed List of Issues. It is clearly an afterthought of P’s lawyers who realized just how hopeless P’s case was in view of the contemporaneous documents like the Attendance Note and the Executed Documents. C.9.3 How P framed the conditional / imperfect gift issue 139.The following is how P has introduced the issue of conditional / incomplete gift under P’s Opening. 140.P says that Ds have pleaded a defence of gift. If the Court finds that P had intended a gift, it is in fact not the end of the matter. This is because in the present case:-
141.Therefore and in the absence of an express deed (after all the general power of attorney does not express powers to dispose of land and is drafted only in general terms), P submits the following questions must invariably arise:-
142.P further submits that she does not need to amend her pleadings to attack the Ds’ own case – they have the onus to prove that the so called gift is valid and perfected. 143.Furthermore, P submits that Ds are not prejudiced for the following reasons:-
144.In my view, the above position taken by P’s counsel on conditional / incomplete gift gives rise to 2 separate issues, namely, (i) whether the issue of conditional / incomplete gift has to be specifically pleaded so that it can fully canvassed in evidence and argued at the trial; and (ii) if no need to be pleaded, whether the gift was a conditional one and the condition has not been fulfilled and thus making it an imperfect / incomplete gift. C.9.2 Whether the issue of conditional / incomplete gift has to be specifically pleaded? 145.In this regard, I am in agreement with the following submissions made by Mr Wong on behalf of Ds under Ds’ Opening. 146.Whether the gift was conditional or not is a matter of P’s own intention. She has fully committed to the pleaded case that she did not intend the gift at all. A party is not entitled to plead an inconsistent alternative unless the party has reasonable grounds for so doing: RHC O.18 r.12A. I agree that the “conditional gift” intention is wholly incompatible with P’s “no intention to gift” case, and there is no reasonable ground for P to plead such an inconsistent alternative. 147.It is therefore a futile exercise for P’s legal team trying to establish a completely new and self-contradictory case by simply quoting some of Ds’ statements out of context. 148.Furthermore, on merits, P will face considerable difficulty to establish a case of “conditional gift” (also any breach of the said condition), even assuming that she is allowed to raise it at the trial (without any evidence in support):-
149.On the other hand, the argument based on “imperfect gift” appears inconceivable. By executing the PoA for the specific purpose of allowing D1 to transfer Properties on her behalf, P has taken all the steps necessary within her exclusive power for effecting the gift: Snell’s Equity, 33rd Edn, p.653, 24-006. The Properties are now under the names of Ds and it was exactly why P now seeks to set aside those transactions. 150.The following principles stated by Ma JA (as the CJ then was) at Poon Hau Kei v Hsin Chong Construction Co Ltd and Others [2003] 2 HKLRD 56 (“Poon Hau Kei (CA)”) are approved by the Court of Final Appeal (“CFA”) in (2004) 7 HKCFAR 148 at 156-157 (“Poon Hau Kei (CFA)”), even though the CA decision was reversed:-
151.I find the above passage helpful and consider that the principles stated herein apply in this case. In my view, the same two questions should be asked. C.9.3 Question 1 – is the “new version” a radical departure of issues already before the court 152.I agree with Mr Wong that the answer must be “yes”. 153.All along on P’s pleadings, she fully committed to the case that there was no gift at all. The issue all along is whether a gift was intended. 154.P is now trying to argue that:-
155.It goes without saying that the above line of argument was heading towards a completely different direction from the “no gift” scenario. 156.P argues that she did not need to plead the above issues because it was borne out of Ds’ pleadings. 157.I do not agree with that submission at all. 158.With respect to P’s counsel, it was never featured in Ds’ case that the gift was subject to any condition precedent. 159.Ds’ case was clearly that P intended a gift which would pass as soon as it could be practicably arranged by YSL: (AD §14; AD §§21-24). In this sense, the gift was intended to be immediate and unconditional. 160.Ds never pleaded that before they were entitled to receive the gift, they had to first do something (including clearing up all potential estate duties). 161.Nor there were pleadings to the effect that D1 could only exercise the power under the PoA after certain conditions were met (which appears to be P’s current stance). To the contrary, Ds pleaded that D1 had P’s authority to deal with the Properties as his own: (AD §30). 162.P should have sought clarification on Ds’ pleaded case if she considered that there was any unambiguity (which is denied by Ds). She did not seek further and better particulars in respect of the AD. 163.In my judgment, it is incumbent for P to amend her pleadings if she now contends that the promise by D1 was a legally binding conditional precedent. Besides, she must specifically plead D1’s corresponding duties under the conditional precedent, and the facts as to how he breached them. She also needs to spell out the legal consequence which follows the alleged breach. 164.She has completely failed to do so. In my judgment, she is not entitled to raise this now. C.9.4 Question 2 – Would the preparation and conduct of Ds be different had the issues been pleaded? 165.Again, I agree with Mr Wong that the answer must be “yes”. 166.Mr Wong submits that had P properly pleaded the conditional gift issues, Ds would put P to an election as to which factual version of the same event she was going to run at trial. 167.I agree. 168.Of course, a party can generally plead and run cases in the alternative, but where he seeks to advance two entirely different factual versions in relation to the same event, he will almost invariably be required to elect which version he is going to advance. This approach is consistent with consideration of justice to the parties and proper trial management: Poon Hau Kei (CA), supra, §35 (Ma JA). 169.P is not entitled to have the best of both worlds. She cannot avoid the aforesaid election (and preserving her “primary case”) by not pleading the “alternative case” (viz. conditional gift line of defence), at the same time arguing that it was always open to her to fall back on the alternative case in the event her “primary case” failed. 170.Further, had P chose to run the conditional gift case, I agree with Mr Wong that Ds would have been entitled to raise the following issues in response:-
171.The above issues are obviously fact sensitive. I agree with Mr Wong that the Court cannot try the issues in the absence of pleadings. P’s Reply on Poon Hau Kei (CA) 172.Mr Deng in P’s Closing stated that, unfortunate for Ds’ counsel, Poon Hau Kei (CA) was overturned by the CFA in Poon Hau Kei (CFA). He cited the following passage of Bokhary PJ (who gave the judgment of the Court) at §§18-19 to try to make good his point:-
173.While it is true that Poon Hau Kei (CA) decision was subsequently overturned by the CFA in Poon Hau Kei (CFA), I do not think the principles laid down by the CA as cited in the passage by D’s counsel above was overruled by the CFA. In fact, Bokhary PJ specifically endorsed Ma JA’s above passage at §§11-12 (at pp 156-157) but subject to the “omission” the learned judge has discussed in §12 of the CFA judgment. 174.In my view, Poon Hau Kei dealt with a very unique (and very narrow) situation where the respondent pleaded a scenario (the light rough scenario) and said the accident was “caused solely or contributed to by the negligence of the appellant”. It was a scenario which the appellant had not pleaded and not relied on at the trial. He subsequently succeeded at the first instance not on his own pleaded case (the ladder scenario) but the respondent’s case (the light trough scenario). I note that the plea of the respondent was self-contained and complete by itself. It did not require any clarification or subject to any condition. 175.Thus, in my judgment, the rules laid down by Bokhary PJ in Poon Hau Kei (CFA) do not apply in this case as the facts / pleas of Ds (now purportedly P tries to rely on) in our present case are very different:-
176.I agree with Bokhary PJ that in a situation like this ultimately it boils down to a question of fairness and whether the opponent will be prejudiced. 177.In this case, the fact is that P has specifically denied in the AR that she had made any gift to Ds: (See §§3a., 11, 10 & 15 of AR). It is not a situation that she has run her case in the alternative. It is also not a case where she said that I might have given the Properties to D1 but they were all subject to some conditions that D1 has to fulfill first. She could have raised the point in the reply or AR that they were conditional / incomplete gifts but she had not. 178.In my judgment, it will be grossly unfair and highly prejudicial to allow P to raise the unpleaded issue of unconditional / incomplete gift at trial when it was not even pleaded by Ds. I therefore will reject P’s case that she is entitled to succeed on the Gift Issue by relying on Ds’ pleaded case. C.9.5 Conclusion on the unpleaded case 179.In conclusion, I am of the view that P should not be allowed to run the conditional gift argument without first having pleaded the issue in her reply or AR. C.9.6 Pre-assignment rental income 180.On the alternative case about pre-assignment rental income (which was only introduced for the first time in the 2023 amendment under ASOC §§26-30), I agree with Ds that there is simply insufficient evidence in support. 181.There was no serious dispute that the NT lands originated from P and D1’s father Lau Leung Sheung. 182.P did not give any evidence to the effect that she did not agree to allow D1 to manage the NT lands before the gift. In fact, she did not touch upon the pre-assignment rental income issue in her WS. 183.According to P’s own affirmation §22(2), she mentioned that since 1977, D1 has been collecting all the rental income from the lands belonging to Lau Leung Sheung and LYP. In 2000, the 2nd Fong DFA was entered into. On 23 September 2010, P signed the said DFA and wrote “我明白家庭協議書 同意”. According to the terms of the DFA, D1 (together with another manager, Lau Yu Woo) was apparently authorised to manage the lands comprising the estate. 184.In the AR, P denied the effect of the DFA §24(1). However, none of the averments stated therein (including, inter alia, the NT lands did not fall within the scope of the DFA; there was total failure of consideration; there being misrepresentation of law etc.) were made out in evidence. 185.On balance, I find that P failed to prove that D1’s receipt of the pre-transfer rents as trustee was against her consent. For this reason, this alternative claim will be dismissed also. C.10 2 witnesses’ requirement under the PAO 186.In a desperate attempt to try to set aside the PoA, P’s counsel suggested to YS Lau and Lee in cross-examination that there was a legal requirement that a power of attorney must be witnessed by 2 other persons. Mr Deng referred them to section 2(2) of the Power of Attorney Ordinance (Cap 31) (“PAO”). Both YS Lau and Lee disagreed. 187.With greatest respect to Mr Deng, this argument is disingenuous and totally misconceived. It is based on a complete misreading of the relevant section of the PAO. I am surprised that an experienced counsel like Mr Deng would even attempt to put forward such an absurd proposition and interpretation of the statute on behalf of his client. 188.Section 2(1) of PAO provides that “An instrument creating a power of attorney shall be signed and sealed by, or by direction and in the presence of, the donor of the power”. [emphasis added] 189.Section 2(2) of PAO provides that “Where such an instrument is signed and sealed by a person by direction and in the presence of the donor of the power, two other persons shall be present as witnesses and shall attest the instrument.” 190.The law in this area has been succinctly summarised by Godfrey J (as he then was) in Champhon Industrial Ltd v Hight Projects Industrial Ltd, unreported, HCMP 3631/1992, 29 December 1992 at §2 on p3 of the judgment as follows:-
191.It is clear that P does not fall within the section 2(2) situation as she was quite capable of signing and sealing of the PoA by herself without the need of having another person to sign and seal the instrument by her direction and in her presence. Hence, the first half of s2(1) of PAO applies to her. 192.Thus, insofar as P’s argument that the PoA was invalid due to the requirement of 2 persons have to witness and sign, that must fail also. 193.I note with great deal of regret that despite raising this matter boldly and putting it to YS Lau and Lee strongly during cross-examination, P’s counsel did not seek to argue or comment on this any further under P’s Closing. In my view, this is rather irresponsible. C.11 Conclusion on the disputed facts 194.In a case where parties are heavily relied on their memory of the unrecorded conversations which happened years ago, more weight should be given to the contemporaneous documents and inference drawn from the objective evidence rather than the witnesses’ recollections: see Yu Man Fung Alice, supra at §58. 195.In my judgment, all the contemporaneous documents in this case point to one direction only and that is P intended to gift the Properties to D1 and his family in August 2012. These documents included the Will prepared by YSL according to P’s instructions and signed by P on 14 August 2012; the Attendance Note composed by YS Lau immediately after his meeting with P on 14 August 2012; and the PoA, the severance notices and the S&P agreements prepared by YSL (according to P’s instructions) which were subsequently signed and executed by P. 196.Based on the above contemporaneous documents and my findings on the parties witnesses’ oral evidence above, I would make the following factual findings that in August 2012:-
197.I further find that the gift was completed in 2013 when D1 relied on the PoA to execute the relevant assignment of the Locwood Flat and the NT Lands to D2 and D3 respectively. In my view, P has done everything necessary within her power in order to transfer the Properties to D1: Ng Kit v Wu Tsun Hua & Ors, supra at §§32-33. 198.At the time when D1 transferred the Locwood Flat to D1 and the NT Lands to D3, he was making use of the power given to him by P under the PoA. The PoA was still valid and subsisting and the use of the PoA was with P’s express authorization. 199.Thus, in my judgment, the gift then become irrevocable. D. CONCLUSION 200.Based on my analysis of the evidence and the findings above, I have no hesitation to dismiss P’s claims in this case at all. In my judgment, they contain no merits at all and should have never been bought in the first place in the light of the unequivocal contemporaneous documents. 201.Costs should follow the event. P who has lost in her claims against Ds is ordered to pay the costs of the action of Ds, including any costs reserved. Given the poor conduct of P in pursuing this case, including arguing on matters which are clearly unarguable (like the Attendance Note and PoA issues) and the very late introduction of the unpleaded issue of unconditional gift, they have unnecessarily prolonged the trial and added unnecessary costs to the proceedings. I am therefore of the view that Ds are entitled to a higher scale of costs in this case. I will therefore make an order nisi that P to pay the costs of Ds on an indemnity basis, such costs to be taxed if not agreed. The order will become absolute in the absence of any application from the parties within 14 days after the judgment is handed down.
Mr Earl Deng and Ms Winky Wong instructed by Chui & Lau for the plaintiff Mr Leo Wong instructed by Ho, Tse, Wai & Partners for the 1st, 2nd and 3rd defendants [1] She was 96 years old at the time of trial, having been born on 7 February 1929. [2] ASOC §6 [3] ASOC §7 [4] ASOC §8(2) [5] ASOC §8(2)(a)(iv) [6] ASOC §8(2)(b) [7] ASOC §8(3)(b) [8] ASOC §12 [9] ASOC prayers (1)-(8) [10] Amended Defence (“AD”) §5 [11] AD §11 [12] Attendance Note at [C/399-400] [13] AD §37 [14] AD §§23-24; YS Lau’s WS §§5(f)-(i) [15] AD §§21-22; YS Lau’s WS §§5(g)-(i) [16] See §§126-127 of P’s Closing Submissions (“P’s Closing”) [17] [TB2/395] [18] [TB2/370-372] [19] [A/52-1 to 52-2] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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