Cheng Ancel Ong v. Cheng Anthea Ong, The Executrix of the Estate of Cheng Lai Ping Angela, Deceased
Read the full judgment text of HCMP 100/2025 on BabelCite. This High Court CFI judgment was delivered on 27 March 2026.
1. This is the substantive hearing of the Plaintiff’s Originating Summons dated 17 January 2025 (the “OS”), as amended on 26 February 2025 (the “AOS”).
Cites 2 cases
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HCMP 100/2025 [2026] HKCFI 1768 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 100 OF 2025 ________________________
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________________________ DECISION ________________________ INTRODUCTION 1.This is the substantive hearing of the Plaintiff’s Originating Summons dated 17 January 2025 (the “OS”), as amended on 26 February 2025 (the “AOS”). 2.By the AOS, the Plaintiff seeks against the Defendant as executrix of the Estate of Cheng Lai Ping Angela (the “Deceased” or the “Mother”) for an account of the Estate and a further distribution of HK$2,804,865.00, premised on the alleged wrongful inclusion of a promissory note in the sum of HK$5,610,000 in the Estate (the “Promissory Note”). The Plaintiff and the Defendant are siblings. 3.In respect of an account of the Estate, I agree with the Defendant that the same is not necessary. On 22 April 2024, the Defendant had already provided to the Plaintiff’s solicitors a complete list of the Estate’s assets and liabilities. Thereafter, the Plaintiff made no further request, whether personally or through his solicitors, regarding the account of the Estate or for inspection of supporting documents, until the OS was filed on 17 January 2025. 4.The Plaintiff has also affirmed that he does not challenge the values of the listed assets and liabilities, save that the Promissory Note should be excluded from the Estate. 5.Further, notwithstanding the absence of any pre-action request, the Defendant has re-produced the account of the Estate Account and exhibited all relevant supporting documents to her affirmation. 6.Thus, I accept that there is no need to make an order in terms of paragraphs 1 and 2 of the AOS. 7.The remaining issue in contention is whether the Promissory Note recording a loan of HK$5.61 million (the “Loan”) advanced by the Deceased to the Plaintiff in 2015 should form part of the Estate. The Plaintiff says no, the Defendant says yes. MATERIAL FACTS 8.In 2015, the Plaintiff executed the Promissory Note, recording the Loan advanced by the Mother to him for the purpose of acquiring Apartment 3 on the Third Floor (Of Block 1) Mandarin Court Nos 134-136 Argyle Street, Kowloon (the “Mandarin Court Property”). The execution of the Promissory Note was witnessed by Mr Lai Wai Hung, a solicitor of the HKSAR (“Mr Lai”). 9.Clause 1 of the Promissory Note provides that the Loan was repayable “upon demand in such place as the [Deceased] may from time to time advise”. 10.On 18 March 2015, an assignment was executed in favour of the Plaintiff for the consideration of HK$8.8 million (the “Purchase Price”). The Plaintiff was the sole registered owner of the Mandarin Court Property. 11.The Deceased passed away on 28 October 2022. 12.The Defendant is the named executrix under the Deceased’s last Will dated 14 October 2022 (the “Will”). 13.On 16 May 2023, the Grant of Probate (the “Grant”) was issued, enclosing the Schedule of Assets and Liabilities dated 27 April 2023 (the “Schedule”). The Grant was subsequently amended by including an Additional Schedule of Assets and Liabilities dated 27 November 2023. The Defendant, as executrix, has included the Promissory Note in the Schedule. 14.It is not disputed that the Mother never sought repayment of the sum during her lifetime. The Defendant’s solicitors on 5 April 2024 confirm that “no demand has ever been made to [the Plaintiff]” under the Promissory Note. 15.It is the Plaintiff’s case that the Mother allowed the 6-year limitation period to lapse (which runs from the date of the Promissory Note in 2015) by 2021 without taking any action, by which time it became unenforceable. 16.It is also a fact that the Promissory Note is not listed as an asset of the Estate in the Will. 17.On the evidence, the first time, the Defendant raised the issue of the Promissory Note was through WhatsApp with the Plaintiff and his wife on 15 November 2022 (i.e. after the Mother passed away). THE PLAINTIFF’S CASE 18.The Plaintiff’s case is that from the outset, the Deceased never intended to seek repayment from the Plaintiff under the Promissory Note. The Mother would make such a demand only if the Plaintiff happened to get into debt or become divorced. It was meant to be a means of preserving the family’s assets and preventing the same from falling into the hands of outsiders, but the money advanced was otherwise a gift to the Plaintiff. 19.The Plaintiff’s case is that the Promissory Note was executed during an early 2015 meeting with Mr Lai, a conveyancing solicitor the Mother engaged in relation to the Mandarin Court Property, where the Mother and the Plaintiff were both present (the “Meeting”). At the Meeting:
20.The Plaintiff says that afterthe HK$5.61 million was gifted to him, the Mother mentioned that she would have to make it up to the Defendant by giving her more in the future – to ensure fairness between the Plaintiff and the Defendant, and that is why items (4) to (7) in the Will were left to the Defendant alone, including Apartment C on 1st Floor, Prince Edward Towers, Nos 252-254 (Formerly Nos 252-256), (the “Prince Edward Property”), such that both children got one property each. 21.On the Plaintiff’s case, the next event is back in 2019, when he expressed his fear about what would happen after the Mother passes away, Mother then said she would contact her lawyers and a few days later replied that the Plaintiff “do not have to worry about the note [the Plaintiff] signed anymore]”. The Plaintiff believed that the Promissory Note had been “dealt with by her and her lawyers already”, so that the Plaintiff does not have to worry about it being used against the Plaintiff after the Mother passes away. 22.The Plaintiff, thus, claims that first, the Promissory Note is a sham. In fact, the monies were gifted to him under the disguise of the Promissory Note. Secondly, the Court should exercise its residual discretion under the Cherry v Boultbee rule to disregard the Promissory Note. Thirdly, the Promissory Note should be disregarded as it is discharged by operation of section 63(1) of the Bills of Exchange Ordinance (Cap 19) (the “Ordinance”). THE DEFENDANT’S CASE 23.The Defendant’s case is that the Mother only informed her about the Promissory Note in late 2020, and that in October 2020, Mother gave her the Promissory Note and explained that the arrangement was to ensure fairness between the Plaintiff and the Defendant. 24.It is the Defendant's evidence that when she drafted the Will with the Mother, the Mother was fully aware of the existence of the Promissory Note. 25.The crux of the Defendant’s case is that a term should be implied into the Promissory Note to the effect that the limitation period for the Mother to enforce the Promissory Note shall not commence until specific events happen, namely, the Plaintiff’s bankruptcy, or if he became divorced (the “Implied Term”). ANALYSIS AND DETERMINATION 26.First, I am of the view that the Promissory Note cannot and is not a sham document and therefore the HK$5.61 million advanced thereafter was not a conditional gift. 27.The law on sham is well established. See Aurum Pacific Finance Ltd v T & V International Holdings Ltd [2024] HKCFI 1798 at §§33-36. All the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating. 28.In my judgment, the Promissory Note was drafted by a solicitor precisely to give legal effect to it. Clause 1 of the Promissory Note specifically provides that the Loan was repayable “upon demand in such place as the [Deceased] may from time to time advise.” In other words, the Promissory Note was intended by all parties to be a legally enforceable document against the Plaintiff as and when the Mother exercised her right thereunder. 29.Secondly, I reject the Defendant’s submissions in relation to the Implied Term. I do not seek to rehearse the legal principles in relation to implied terms. It suffices for me to say that it is unreal and incredible that the Mother when directing Mr Lai to prepare the Promissory Note and the Plaintiff to execute the same would have in her mind the legal concept of limitation period. 30.I do not accept that on the evidence, the Promissory Note’s limitation period was to run from the time when the Mother made a demand for repayment. 31.In my judgment, the key issue is that from the evidence that the Mother would make a demand on the Promissory Note only if the Plaintiff “entry into debt which means bankruptcy, or if he became divorced”. Both triggering events never happened during the Mother’s lifetime. Both triggering events have not happened until now. Hence, the correct analysis is that there is not yet any triggering event to make any demand for payment under the Promissory Note. 32.I am of the view that this is the reason why the Mother had not listed the Promissory Note as one of her assets in her Will. She never intended to enforce the same until the triggering events happen. She never regarded the Promissory Note as one of her assets. 33.I also note that the Defendant’s case is that she was with the Mother when the Will was drafted and they were aware of the existence of the Promissory Note. If the Mother had indeed intended to enforce the same, there is no explicable reason why she did not list the Promissory Note as one of her assets. This is particularly the case when it was the Defendant who accompanied the Mother to prepare the Will. 34.To give true effect to the intention of the Mother, I find that the Promissory Note is not yet payable and is thus not an asset that should be included in the Estate. That should be the end of analysis. 35.Alternatively, it is well-established that the 6-years limitation period on a promissory note payable on demand runs from the date of the note or its issue, and not from the date of demand: see Chitty on Contracts (36th ed) at §37-197, Li Fook Chu v HH Lau & Co (unrep, HCA 247/2003, 7 July 2005) at §§33-34. Given that the parties do not dispute that the Promissory Note was made in 2015, it became time-barred sometime in 2021, beforethe Defendant first raised the matter or relied on it. 36.The Defendant does not dispute that the Promissory Note is a note payable on demand. As a rule, the limitation period runs from the date of the note or its issue. 37.Mr Ng for the Plaintiff fairly drawn to the attention of the Court the principles in Cherry v Boultbee (1839) 4 My & C 442 and In re Akerman [1891] 3 Ch 212 (see also Williams on Wills (11th ed) at §30.10-30.12). 38.The former case gave rise to the rule in Cherry v Boultbee which is described as follows in Akerman at p. 219:
39.Re Akerman [1891] 3 Ch 212 is a case cited for the proposition that even the expiry of the limitation period does not prevent the sums from being brought into the netting off under the rule in Cherry v Boultbee: see e.g. Colin Johnston v Natalie Elsie Wackett [2022] EWHC 129 (Ch) at §55. 40.However, I am of the view that the above rule is not inflexible. The Court retains a discretion in the matter, which is to be exercised in accordance with the principles of equity and conscience. In Akerman, Kekewich J remarked that: “[b]ut there is some evidence to shew that the testator did not intend to enforce these documents... I think it deserves further consideration... I think the matter must be inquired into” (p 221). That is to say, that if it can be shown that the testator did not intend to enforce the debt, then the court will not hold that they “owe” those sums for the purposes of equity (p. 221). 41.On the facts of the present case, as I set out above, it is the clear intention of the Mother not to enforce the Promissory Note until the triggering event happened. 42.I also take into consideration that absent exceptional considerations, it is only natural for the Mother to achieve fairness by gifting one real property each to her two children, the Plaintiff and the Defendant. The enforcement of the Promissory Note will inevitably disturb such balance. In my view, that is the reason why the Mother did not list the Promissory Note as one of her assets in her Will. 43.What the Defendant contests is that there is an implied term in the Promissory Note whereby parties agree that any limitation period would not commence until the Deceased had made demand for repayment. Although the Promissory Note contains no express term addressing limitation, when viewed considering the Deceased’s clear intention to enforce the Promissory Note upon the Plaintiff becoming indebted or divorced, the Defendant submits that there is an implied term in the Promissory Note limiting the Plaintiff’s ability to plead limitation. 44.As I said above, I disagree. The Mother’s clear intention is that the Promissory Note should not be demanded until and unless the triggering events happen. It can hardly be said that it goes without saying that the Mother had in her mind the concept of limitation period and that the same should not start to run when a demand is made. 45.Mr Yung for the Defendant further submitted that the Mother intended the Promissory Note to be enforceable, not only upon the Plaintiff’s indebtedness or divorce. I disagree. There is no evidence to support such contention. If that is the case, the Mother could and would have demanded repayment under the Promissory Note before her death. This had not happened. The fact that the Deceased had retained continuous possession of the Promissory Note is consistent with her intention that the same should only be enforced when the triggering events happen. This is to protect the family assets and, in a way, to protect the Plaintiff. 46.This Court fully appreciates that the Defendant assumed an active and sustained role in caring for the Deceased throughout her illness. That is very commendable. However, that subsequent conduct, in my view, does not impact on whether the Implied Term exists. Without the Implied Term, Mr Yung for the Defendant agrees that the limitation defence kicks in. 47.It is of course up to the Mother to change her Will to add the Promissory Note as an asset under her Estate. Hence, on balance, I am of the view that the Mother had all along intended the Plaintiff should have the Mandarin Court Property. Indeed, Mr Yung for the Defendant submitted that the Plaintiff had received substantial benefits from the Mandarin Court Property over the years including rental income, mortgage repayments and the sale proceeds. Had the Mother intended to ask for repayment absent the triggering events, she could have done that long time ago. In my view, the Promissory Note was executed when the Plaintiff was relatively young and to protect the claims for his creditors and/or divorced wife (if any). 48.I note the Defendant’s case that the Mother decided to leave the Prince Edward Property solely to the Defendant in recognition and appreciation of her role as her primary caregiver. It is submitted that this further confirms that the devise of the Prince Edward Property had nothing to do with the alleged gift of HK$5.61 million. However, I am of the view that this is a different matter. The fact that the Mother gifted the Prince Edward Property and other assets to the Defendant in appreciation of her kindness does not mean that the Mother thus changed her intention, for the sake of fairness, to enforce the Promissory Note without the triggering events. 49.Finally, I am of the view that there is no evidence that the Promissory Note has been discharged by the operation of section 63(1) of the Ordinance. I cannot take the Plaintiff’s evidence at its face value. If the Mother had indeed said she would contact her lawyers and that the Plaintiff needed not worry about the Promissory Note as alleged, the Mother would simply have contacted Mr Lai or have the Promissory Note destroyed. 50.In fact, Mr Ng for the Plaintiff fairly gave up this point upon the Defendant’s production of the original of the Promissory Note. DISPOSITION 51.For all the above reasons, I make an order in terms of Paragraph 3 of the AOS. 52.I am of the view that a fair costs order should be the costs of these proceedings be paid out of the Estate. I do not think that the Defendant had in any event acted unreasonably. She has the Promissory Note. It is her duty to seek directions from the Court as to whether the same, on its proper construction, should or should not be included in the Estate for the purposes of distribution. The Plaintiff and the Defendant have, in my view, bona fide but divergent positions which are very normal. Further, the grounds advanced by the Plaintiffs are not totally successful. 53.Accordingly, I make a costs order nisi that the costs of the present proceedings be paid out from the assets of the Estate with a general liberty to apply. This costs order nisi should be made absolutely within 14 days from the date hereof unless an application is taken out to vary the same with the 14-day period. 54.Finally, it remains for this Court to thank counsel for their helpful assistance.
Mr Ernest Ng & Mr Joshua Wang, instructed by H Y Leung & Co LLP, for the Plaintiff Mr Isaac Yung, instructed by Yung, Yu, Yuen & Co, for the Defendant |