Tan Kok Pooh, The Administrator of the Estate of Tan Su Chin, Deceased and Others v. Leong Foong Yin
Read the full judgment text of HCA 1148/2021 on BabelCite. This High Court CFI judgment was delivered on 29 June 2026 before Deputy High Court Judge Grace Chow.
Property law – deed of gift – joint tenancy – right of survivorship – mistake – non est factum – mesne profits – trespass – estate planning – whether Deed of Gift liable to be set aside for mistake as to legal character or nature of transaction – whether Deed of Gift void ab initio by reason of non est factum – who is beneficial owner of Property after Deceased's death – whether Ps wrongfully interfered with D's rights by changing locks and retaining title deeds – quantum of mesne profits and interest. The Deceased (Tan Su Chin), a successful Malaysian businessman, purchased a flat in City Garden, North Point in 1983. He had children with both Madam Nah (his Chinese-ceremony wife) and D (Leong Foong Yin, with whom he cohabited from 1957). On 8 April 2004, the Deceased executed a Will and a Deed of Gift prepared by SKWL solicitors, with the Deed of Gift assigning the Property to himself and D as joint tenants. The Deceased had prior experience with joint tenancy through Australian property purchases in 2000 and 2002, and in 2008 severed a joint tenancy for one Australian property. The Deceased passed away on 9 February 2019 at age 95. Ps (children of Madam Nah) sought to set aside the Deed of Gift claiming the Deceased only intended to gift 50% beneficial interest to D under an alleged Arrangement, while D claimed she was the sole surviving owner by right of survivorship. The court held that the Deed of Gift was not liable to be set aside for mistake, as there was no contemporaneous evidence of the alleged Arrangement, the Deed of Gift and Will were inconsistent with it, and the Deceased's prior experience with joint tenancy demonstrated his understanding. The court further held that the Deed of Gift was not void ab initio by reason of non est factum, as the factual basis was the same as for mistake. D was declared the sole beneficial owner of the Property by right of survivorship. The court found that Ps wrongfully interfered with D's rights by changing the locks and retaining the title deeds, constituting trespass. Mesne profits were assessed from 23 March 2021 (date of first demand) at the market rent assessed by the valuation expert: HK$421,200 (2021-2022), HK$439,200 (2022-2023), HK$440,400 (2023-2024), HK$440,400 (2024-2025), HK$440,400 (2025-2026), and thereafter at HK$1,223 per day until actual possession, with interest at prime plus 1% from 23 March 2021 until judgment and thereafter at judgment rate. Costs were awarded to D on a party-to-party basis.
Legal issues: Whether the Deed of Gift is liable to be set aside for mistake · Whether the Deed of Gift is void ab initio by reason of non est factum · Beneficial ownership of the Property after the Deceased's death · Whether Ps wrongfully interfered with D's rights, possession and enjoyment of the Property · Quantum of mesne profits and interest
Outcome: Plaintiffs' claims dismissed. D declared sole surviving owner of the Property by right of survivorship. Ps ordered to deliver vacant possession, title deeds, keys and documents to D within 6 weeks. Ps to pay mesne profits with interest. Costs awarded to D on party-to-party basis.; Ps' claims against D dismissed; Declaration that upon the passing away of the Deceased, D is the sole surviving owner of the Property pursuant to the right of survivorship; Ps to deliver vacant possession, title deeds, keys and documents of the Property to D not later than 6 weeks from the date of judgment; Ps to pay D mesne profits together with interest; Ps to pay D the costs of this action (including the counterclaim) on a party-to-party basis, to be taxed if not agreed
Cites 18 cases
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HCA 1148/2021 and HCA 951/2021 (Consolidated) [2026] HKCFI 3493 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 1148 OF 2021 AND 951 OF 2021 _______________ BETWEEN
(By Original Action) _______________ AND BETWEEN
(By Counterclaim) (Consolidated by the Order made by Master Phoebe Man on 21st October 2021) _______________
_______________ JUDGMENT _______________ A. Introduction 1.In this trial, I have been asked to determine the validity and enforceability of the Deed of Gift executed by the late Tan Su Chin (“the Deceased”) on 8 April 2004 (“Deed of Gift”) concerning a flat in City Garden, North Point (“the Property”). 2.The 1st to 3rd Plaintiffs (collectively, “Ps”) seek to set aside the Deed of Gift on the ground of mistake or alternatively, non est factum. 3.The Defendant (“D”) claims that upon the passing away of the Deceased, the Property held as joint tenants by D and the Deceased, as provided for in the Deed of Gift, belonged to her solely but she has been dispossessed of the Property by Ps for which she seeks inter alia mense profits by way of counterclaim. 4.Mr Keith Tam, counsel, appeared for Ps and Mr KM Chong and Mr Alvin Chong, counsel, appeared for D. B. Undisputed Background Facts 5.The following are facts, largely taken from the Agreed Facts and Agreed Chronology of Key Events or was not disputed at trial, which should be taken as part of my finding of facts. 6.The Deceased was born on 24 April 1923 in Bangkok, Thailand. His ancestral home was Shantou in the Mainland and he moved to Penang, Malaysia in his twenties. 7.In around 1930s to early 1940s, the Deceased and Madam Nah Cheah Keam (“Madam Nah”) contracted their marriage under Chinese ceremony in Shantou. The following children were born out of their relationship:
8.In around 1957, the Deceased and D began to cohabit in Malaysia. In 1958 and 1959, Tan Kok Hooi, their daughter, and Tan Kok Wei, their son, were born respectively. After the birth of Tan Kok Hooi, the Deceased, Madam Nah, D and their children lived under the same roof in Penang, Malaysia. 9.On 20 August 1983, the Deceased purchased and became the sole owner of the Property. 10.In around 1993, the Deceased was conferred with the honorary title of “Dato” for his contribution to the society in Penang. He was a highly successful businessman who founded a number of companies including the South Island Group of companies. 11.On 22 September 2000, the Deceased and D became joint tenants of an apartment in Victoria, Australia (“River Street Apartment”). 12.On 9 May 2002, the Deceased and Tan Kok Hooi purchased an apartment in Victoria, Australia (“Freshwater Place Apartment”) as joint tenants. 13.On 8 April 2004, the Deceased executed the following documents prepared by Messrs S K Wong & Lee (“SKWL”) in Hong Kong: (a) a will (“the Will”); and (b) the Deed of Gift. 14.Under the Will, the Deceased bequeathed all his real and personal property in Hong Kong in three equal shares to his three sons of his relationship with Madam Nah. The Will was witnessed by a solicitor, Mr Wong Shun Foon (“SF Wong”) and a secretary, Ms Chiu Man Ki, both of SKWL. SF Wong interpreted the Will, which was in English, to the Deceased in the Punti dialect. 15.Under the Deed of Gift, the Deceased as sole registered owner assigned to himself and D by way of gift the Property as joint tenants. Ms Rebecca Leung (“Rebecca Leung”), a clerk at SKWL, signed on the Deed of Gift as a witness and she interpreted the Deed of Gift to the Deceased and D. Ms Au Yeung Wai Ming (“Au Yeung”), a solicitor, verified the signature of Rebecca Leung. 16.In 2008, the Deceased converted the joint tenancy of the Freshwater Place Apartment into a tenancy in common in equal shares by way of a Transfer of Land. 17.On 17 May 2008, the Deceased executed a will in Australia bequeathing his estate to Tan Kok Wei (“1st Australian Will”). 18.On 3 May 2011, the Deceased executed his second will in Australia, revoking the 1st Australian Will and bequeathed his estate to Chang Jia Ming, the son of Tan Kok Hooi (“2nd Australian Will”). 19.On 16 September 2011, Madam Nah passed away. 20.On 20 August 2013, the Deceased executed a will in Penang, Malaysia (“Penangite Will”) bequeathing various moveable and immoveable properties in Malaysia and Singapore to the Deceased’s children, D and the son of Tan Kok Ping (Tan Poay Seng). 21.On 10 March 2015, the Deceased executed a statutory declaration (“Statutory Declaration”) in Penang to inter alia confirm that D is the lawful wife of the Deceased and that their marriage was solemnized before the coming into force of the Law Reform (Marriage & Divorce) Act 1976. 22.The Deceased passed away in Malaysia on 9 February 2019 at the age of 95. 23.On 25 February 2019, D, Tan Kok Hooi, Tan Kok Wei, Tan Kok Pooh and his daughter (Tan Ching Wern) travelled from Malaysia to Hong Kong. They visited the Property and opened up the Deceased’s safe in the Property which contained documents including the title deeds of the Property and the Will. 24.On 26 February 2019, D, Tan Kok Hooi, Tan Kok Wei, Tan Kok Pooh and Tan Ching Wern all attended Messrs Yuen & Partner (“YP”) where Ms Clare Au Young (“Au Young”), a solicitor of YP, as arranged by Tan Ee Ling (the 3rd Plaintiff), the daughter of Tan Kok Ping, explained the contents of the Will and the Deed of Gift. 25.On 27 February 2019, there was a meeting with Mr Choi, an old friend of the Deceased at his office. Mr Choi had been appointed under the Will as the sole executor. That meeting was attended by D, Tan Kok Hooi, Tan Kok Wei, Tan Kok Pooh, Tan Ching Wern and Tan Ee Ling. Au Young, who arrived later, explained the content of the Will and Deed of Gift again (according to Ps, it was only heard by Tan Kok Hooi, Tan Kok Wei and D whereas the others were talking several metres away). Mr Choi renounced his executorship by signing some documents prepared by Au Young at that meeting. Ultimately, Tan Kok Pooh was granted Letters of Administration on 18 March 2020 (“LA”). Tan Kok Pooh is the 1st Plaintiff in his capacity as the Administrator of the Estate of the Deceased. 26.On 28 February 2019, D, Tan Kok Hooi, Tan Kok Wei, Tan Kok Pooh and Tan Ching Wern returned to Malaysia. 27.On 4 March 2019, according to Tan Kok Hooi, Tan Kok Pooh visited Tan Kok Hooi at D’s residence and asserted that the Property did not belong to D notwithstanding what was said by Au Young. 28.In March 2019, the lock of the main door of the Property was changed. It is Ps’ case (denied by D) that this was done with the consent of D, D’s children and Tan Koh Pooh. The key was thereafter kept by Tan Ee Ling. 29.In June 2020, Tan Kok Pooh lodged the LA at the Land Registry for registration against the Property but registration was withheld by the Land Registry raising requisitions regarding the ownership of the Property. 30.In around August or September 2020, Tan Kok Pooh contacted Tan Kok Hooi to request D to execute two legal documents: (1) a Confirmatory Deed; and (2) a Power of Attorney (collectively, “the Two Documents”), to inter alia declare her ownership as to only half of the Property and to give authority to Tan Kok Pooh to sell and dispose of the Property. According to Tan Kok Hooi, there were other attempts to get D to sign the Two Documents (including at a family dinner on 30 August 2020) but D refused. 31.On 23 March 2021, D’s solicitors issued a letter to Ps’ solicitor (YP) demanding Tan Kok Pooh to: (1) withdraw the LA from the Land Registry; (2) deliver the title deeds, key and documents pertaining to the Property; and (3) account for all income received or mesne profits in connection with the Property. 32.On 3 May 2021, solicitors in Penang, acting for Tan Kok Ping, Tan Kok Aun and Tan Kok Pooh, issued a letter to Tan Kok Hooi and Chang Jia Ming to inter alia challenge the validity of the 2nd Australian Will. 33.On 17 May 2021, D’s solicitors issued a letter to Tan Ee Ling demanding delivery of all keys and documents pertaining to the Property and an account for all income received or mesne profits in connection with the Property. C. The Parties’ Respective Case 34.Ps’ case[1] is that when the Deceased purchased the Property, he intended that he and all the children of the Deceased would have a place to stay whenever they visited Hong Kong. Prior to his passing, the Deceased always represented and made clear that Madam Nah’s children and D’s children could always stay at the Property whenever they went to Hong Kong. As such, Ps argue that the Deceased wished to put into effect the following arrangement (“the Arrangement”):
35.In light of the Arrangement, Ps claim that the Deed of Gift was executed under the fundamental mistake as the Deceased did not intend to create a joint tenancy but only to gift 50% beneficial interest to D. In particular:
36.On the other hand, D’s case is that she denies that the Deceased did not understand the nature of the Deed of Gift but fully understood the concept of joint tenancy. D relies on the Deceased’s prior experience with joint tenancy in respect of the two properties purchased in Australia. D denies the Arrangement or any mistake. D asserts that the Deceased primarily communicated with her in Cantonese and, as a successful businessman, he had been conducting his business in English and executed legal documents in English.[3] 37.As for D’s counterclaim, D claims that Tan Kok Pooh and Tan Ee Ling interfered with D’s rights, possession and enjoyment of the Property by:
D. Agreed List of Issues 39.The agreed issues are as follows:
E. Applicable Principles 40.The starting position is that a person of full age and understanding is generally bound by their signature on a legal document, even if they did not fully understand the document. See: Ming Shiu Chung & Others v Ming Shiu Sum & Others (2006) 9 HKCFAR 334 per Ribeiro PJ at §84 and Bank of China (Hong Kong) Ltd v Fung Chin Kan & Another (2002) 5 HKCFAR 515 per Litton NPJ at §51. 41.Such document is treated to be valid unless and until it can be set aside by one of the vitiating factors which at common law include fraud, mistake, misrepresentation, non est factum, duress, undue influence and lack of mental capacity: see Ming Shiu Chung & Others at §§87 and 96. 42.In respect of mistakes, in Gibbon v Mitchell & Others [1990] 1 WLR 1304 at 1309E (which was applied in Hotung v Ho Yuen Ki & Others [2005] 4 HKLRD 558 at §26), Millett J (as he then was) held:
43.Further, the mistake must be a “causative mistake of sufficient gravity” which is normally satisfied when there is a mistake either as to the legal character or nature of a transaction or as to some matter of fact or law which is basic to the transaction: see Pitt v Holt [2013] 2 AC 108 at §122 per Lord Walker of Gestingthorpe. 44.As for the burden and standard of proof, it is for the person setting aside the disposition to prove on a balance of probabilities: see Hotung, §27. 45.In Hotung, Tang JA referred to cases where it has been held that it would require “very clear and distinct evidence to show there was some different intention at the time when the settlement was executed” (see Keswick v Jardine Matheson & Co & Others [1959] HKLR 29 at 39) and “cogent evidence needs to be adduced before rectification will be granted” (see Anker-Petersen & Others v Christensen & Others [2002] WTLR 313 at §36). Hence at §36, he held that he would approach the plaintiff’s evidence and case with caution and must decide whether they are sufficiently cogent for him to act on them. 46.As for the doctrine of non est factum, it has to be established that: (1) the defendant was under a disability, whether permanent or temporary; (2) the document he signed was fundamentally different from what he thought he was signing; and (3) he was not careless in appending his signature to the document. The defendant bears a heavy burden of proof and he must establish each of the three components. See e.g. Keswani Soshila v Keswani Motiram [2022] 2 HKLRD 822 at §34. 47.As for drawing an adverse inference against a party on the basis of absence or silence of a witness, see Tjang Siu Thu v Profield Construction Engineering Ltd [2015] 5 HKC 22 at §33, where McWalters JA summarised the following as propositions derived from the case law:
48.Thus as Recorder Jenkin Suen SC held in China Forestry Holdings Co Limited (In Official Liquidation) v Top Wisdom Overseas Holdings Limited & Anor [2025] HKCFI 2893 at §34, adverse inference may be drawn from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action, provided there have been some evidence adduced by the opposing party on the matter or a case to answer on that issue, and there is no satisfactory reason for the absence or silence of that witness. 49.Finally, as for the court’s approach in assessing the credibility of a witness’ evidence, I adopt the helpful summary by DHCJ H Au-Yeung (as he then was) in Hu Lan v David Golden [2023] HKCFI 873) at §36:
F. My Assessment of the Witnesses’ Evidence 50.The following factual witnesses testified at trial:
D’s witness statement 51.Although D has made a witness statement, she did not testify given her mental condition. By Order of Master Hui dated 28 November 2025, Tan Kok Hooi was appointed the guardian ad litem of D and next friend in these proceedings. It was agreed that her witness statement could be adduced as hearsay evidence. 52.However, Mr Tam invited this court to accord no weight to D’s witness statement under s.49 of the Evidence Ordinance, Cap. 8 given: (1) she was the key witness and yet her evidence was completely untested under cross-examination; (2) her clear interest and thus she has every motive to conceal or misrepresent matters; (3) her witness statement was not made contemporaneously but recollects what occurred approximately 20 years ago; and (4) although D was already 89 years old when she prepared her witness statement, D did not apply to take evidence from her in the form of deposition before trial. Although I agree there is some validity to the foregoing submissions, I also bear in mind that it was not reasonable and practicable for D to have given evidence and be cross-examined given her mental state, her evidence does not involve multiple hearsay and it is not suggested the adducing of D’s witness statement as hearsay was an attempt to prevent proper evaluation of its weight or that there was any inconsistency with any previously adduced evidence of D. In my view, having regard to all the circumstances of this case, I would give some weight to D’s witness statement but would place greater weight on the contemporaneous documents and the undisputed background. 53.Mr Tam also invited me to drawn an adverse inference against D for electing not to give evidence. In so far as Mr Tam submitted that other than a vague and unparticularised assertion that the Deceased would give the Property to D as a gift, she has said nothing to assist her defence, plainly the burden of proof is on D to prove the alleged mistake or non est factum. Mr Tam seems to have reversed the burden of proof which he accepted was on Ps. I do not accept that there was any election by D not to give evidence. 54.As the authorities have held, an adverse inference might be drawn where a witness might be expected to have material evidence to give on an issue in an action where a prima facie case has already been raised by the evidence. Leaving aside whether a prima facie case has been raised which shall be considered later on, I respectfully disagree with Mr Tam that D would have the “most direct and personal knowledge of the germane factual matters in this case”. The most direct and germane matter must be, as submitted by Mr Tam as a determinative fact to be decided by me, whether the Deceased was acting under a basic mistake as to the effect of the Deed of Gift. I would ask rhetorically, how would D know or be in the best position to know what is the state of mind or understanding of the Deceased. As for the submissions that one would have certainly expected her to give detailed account of the Deceased’s plans for distribution of his estate in Hong Kong and the circumstances the Deed of Gift was executed, with respect, I cannot see how it can be assumed that the details of the Deceased’s plan would necessarily have been known to her apart from her evidence that the Deceased said that he would give her the Property as a gift and her confirmation that the Deed of Gift was executed by her. The most direct evidence about the Deceased’s plans for distribution of the estate in Hong Kong and intentions must be the documents, namely the Will and Deed of Gift, that he engaged legal professionals to prepare for his execution. 55.As for the submissions that D has not given evidence to support her counterclaim, in particular that she has been dispossessed, it seems to me that there is no question of drawing of adverse inference. Either D has adduced sufficient evidence to prove her case on the counterclaim or she has not. Besides, whether she has been dispossessed and is entitled to the relief sought are matters for legal submissions. As for the factual basis relied upon (i.e. the changing of the locks, the keeping of the title deeds by Tan Kok Pooh and refusal to provide the keys and title deeds when demanded from D’s lawyers) none of these were disputed so plainly D had discharged her prima facie case. Thus the failure by D to give evidence on her counterclaim is plainly irrelevant or insignificant. SF Wong and Au Yeung 56.Both SF Wong and Au Yeung were subpoenaed as witnesses for Ps. In gist, their evidence was as follows:
57.Given that both SF Wong and Au Yeung have no interest in these proceedings and are officers of the Court (Mr Tam had made clear no allegations of professional misconduct or negligence were made against them or SKWL at the outset of his cross-examination), I have no reason not to accept their evidence as credible and reliable. Tan Kok Ping 58.Tan Kok Ping was the eldest of the Deceased’s son with Madam Nah who testified for Ps. 59.His evidence was that the Deceased moved to Shantou in around his primary school years and studied in a private school where the medium of instruction was Teochew dialect which was his mother tongue. The Deceased continued to speak Teochew even when he moved to Malaysia in his twenties. Notwithstanding that he was active in the business circle in Penang, he maintained that the Deceased primarily spoke Teochew (as Penang had a large Teochew population), had basic understanding and comprehension of Malaysian-style Cantonese dialect (but which is different from Punti) but did not understand or speak English. In cross-examination, he accepted that Malaysia (where the Deceased lived for over seventy years) is a multi-lingual society, and his father had signed numerous documents in English, but still he maintained his evidence that the Deceased would not understand English[9]. 60.According to him, the Deceased liked Hong Kong very much and visited Hong Kong at least once or twice a year and given how often the Deceased, him and his siblings visited Hong Kong, on 20 August 1983, the Deceased purchased the Property so that they had a place to stay. Apart from himself, who preferred to stay at a hotel, the Property was the usual place to stay for his siblings whilst in Hong Kong. Prior to the Deceased’s death, the Deceased also represented and made it clear to him and his siblings that they (as well as D and her children) could always stay at the Property whenever they went to Hong Kong. Furthermore, it was mentioned to him and his siblings that he wished to put effect the Arrangement. His evidence was that in around March 2004, the Deceased told him and his siblings that they had instructed SKWL to put the Arrangement into effect and the Will and the Deed of Gift were prepared and executed. 61.Moreover, his evidence was that, for the various reasons pleaded in the Consolidated Statement of Claim, the Deceased must have been acting under a mistaken knowledge and belief as to the effect of a joint tenancy when he executed the Deed of Gift. Notwithstanding that he admitted that he was not present at SKWL when the Deed of Gift was interpreted to the Deceased and the Deceased apparently confirmed that he understood its terms and effect, he maintained that the Deceased would not have understood the Deed of Gift. When asked how he would have known that, he merely asserted that the clerk had misled his father (which was never Ps’ pleaded case or mentioned in his witness statement), that he understood his father and he was of the view that his father did not understand.[10] 62.He was asked in cross-examination why the Deceased’s half of the Property, if that was intended by the Arrangement, was not dealt with in the Will to which he answered that the Deceased believed that they (presumably Madam Nah’s side of the family) would not have any problem and would deal with it. When asked according to the Will, the half interest of the Deceased would be sold and how that was consistent with the Arrangement, he said that if the Property was sold they would be able to get the money which would be distributed to everyone and everyone would get a proportion of the cash. He maintained that the Arrangement was not contrary to the Will and later explained that as they do not need the money they would not sell the Property.[11] 63.He was also asked in cross-examination why his father was able to understand the Will when interpreted in Punti to him but not the Deed of Gift also interpreted in Punti. He was only able to say that it was because the Will was a simple document but not the Deed of Gift. When put to him that his father purchased the two properties in Australia as joint tenants such that he would have understood the meaning of joint tenancy, his only answer was that he did have knowledge about those properties and that he himself would not understand. He maintained this answer even though when shown the invoice which was issued on 30 April 2008 by the Australian lawyers to Tan Kok Hooi and the Deceased stating the invoice was for “interim professional legal costs incurred in this matter from 20 March 2008 to 27 April 2008 including conference with your both and Michael Quah to obtain initial instructions for your Wills and transfer of property from joint owners to tenants in common in equal shares to better achieve your estate planning goals, preparing documents including Wills and Transfer of Land...”[12]. Notwithstanding his professed lack of knowledge or interest in the Deceased’s affairs in Australia, he asserted that Tan Kok Hooi had manipulated the Deceased in respect of those transactions, which again was never mentioned in his witness statement.[13] 64.In all, I did not find him to be a credible and reliable witness. I found his evidence inconsistent with the contemporaneous document and/or undisputed background and was internally inconsistent. When offered the opportunity to explain, he was either evasive or was not able to give a satisfactory or convincing explanation for the inconsistencies. Tan Kok Pooh 65.I also found Tan Kok Pooh, who gave evidence for Ps, not a very credible and reliable witness. Although he gave evidence with the assistance of a hearing aid, from my observations, it was not that he was unable to hear the questions asked but there were occasions he chose not to answer the question directly. I found him an evasive witness. His evidence was also self-contradictory and inconsistent with the contemporaneous documents and/or undisputed background. 66.In his witness statement, a relatively short one, he confirmed the contents of the witness statement of Tan Kok Ping. His further evidence was that when the Deceased’s safety box in the Property was opened on 25 February 2019, D, D’s children and he all agreed that he would safe keep all the documents including the title deeds concerning the Property as he was the one who visited Hong Kong most often and was familiar with the Deceased’s properties in Hong Kong and that he also handled the outgoings of the Property. His evidence was also that the locks were changed because the janitor who had been given a copy of the key for upkeep and maintenance whose service was no longer needed and the Deceased’s friend also had a copy of the keys, but there was no reason for them to have access to the Property. 67.In cross-examination, he was keen to emphasize that he did not have a clear understanding of the Deed of Gift notwithstanding he accepted that Au Young had explained both the Will and Deed of Gift at YP’s office on 26 February 2019.[14] In his first witness statement, he never mentioned this meeting or what happened at Mr Choi’s office on the next day. Given that it is not disputed that the meeting was arranged by Tan Ee Ling for the Will and the Deed of Gift to be explained to them, which he attended, it is unlikely that if there was any lack of understanding or if the explanation was not clear, they did not seek further clarification or explanation. When pressed, he chose not to answer on his understanding of the Deed of Gift but only when informed that an adverse inference may be drawn against him, he answered that he did not have a clear understanding. 68.In cross-examination, he also denied that he heard what Au Young had explained, who was sitting aside with D and her children, whereas he and the others were sitting with Mr Choi several metres away[15], yet this is contrary to Tan Kok Ping’s supplemental witness statement that Au Young was explaining the Deed of Gift.[16] 69.He also maintained that he was not clear about who and why instructions were given to YP to draft the Two Documents including the Confirmatory Deed stating that, “Doubt has arisen as to whether pursuant to the Deed of Gift, the [Deceased] held as one of the joint tenants in the entirety of the Property or as to one of the joint tenants in half part or share of and in the Property”, which was contrary to the two occasions when Au Young had explained that D owned the Property upon the Deceased’s demise.[17] Tan Ee Ling 70.Despite having no direct interest in the Property (save perhaps through her father Tan Kok Ping) and stating in her witness statement that she was only brought in as a defendant by counterclaim because it is claimed that she dispossessed D from the Property such that her witness statement was relatively short in saying that D, D’s children and Tan Kok Pooh had all agreed to change the lock out of security concerns and she did not accede to D’s lawyers demanding an account and mesne profits, her testimony was as described by Mr Tam in closing submissions as “ardent” and that she “had a strong desire to explain matters”. I would also agree, as Mr Chong submitted, that she was extremely argumentative during cross-examination. 71.Notwithstanding her witness statement was rather short, she gave evidence on matters not mentioned therein for the first time during cross-examination. These included her evidence that there was a private conversation between Au Young, D, Tan Kok Wei and Tan Kok Hooi that had been improperly (or for ulterior motives) recorded by Tan Kok Wei and that there was a mutual decision between Ps and D to remove Mr Choi as executor which was the purpose of visiting Mr Choi on 27 February 2019.[18] 72.It is plain from the lawyers’ correspondence that Ps were not willing to accede to the request by D for the keys and title deeds to the Property. Yet in cross-examination, she said, contrary to her witness statement[19], that she was always willing to give D a set of the new keys if asked[20]. When shown the lawyers’ correspondence, she resorted to explaining that she could not accede to D’s demand when she was suing them and sent legal letters. 73.In all, I did not find her a reliable and credible witness. Tan Kok Wei 74.Tan Kok Wei gave evidence for D. In cross-examination, he frankly admitted matters that he had no firsthand knowledge about. 75.In his witness statement, he stated that it has long been his understanding that the Property was purchased for D[21]. However, from his answers in cross-examination, he accepted that he was not directly told this was the case by D or anyone but that because he was allowed to stay at the Property by the Deceased whenever he went to Hong Kong and his contribution to the maintenance and repair, it gave him “the feeling” that the Property was owned and given to D. He accepted that he was not told about the Deceased’s estate planning[22]. 76.In his witness statement, he did not mention anything about the visit to the Property on 25 February 2019 although he adopted the content of Tan Kok Hooi’s witness statement. In cross-examination, he said that he was standing aside when the documents were taken out by Tan Kok Pooh and Tan Kok Hooi and did not hear any conversation concerning who was to keep the documents. He also confirmed he did not know about the changing of the locks to the Property.[23] 77.I did not find his evidence of much assistance. Chang Jia Ming 78.Although Chang Jia Ming, the Deceased’s grandson, purported to give evidence for D, he accepted that he did not have direct knowledge on many matters. It is plain that most of his evidence was from documents (such as the Deceased’s purchase of properties in Australia) and from research he did online (such as the businesses the Deceased was involved in and the title and honours conferred on the Deceased) as they happened well before he was born or to which he could not have had any personal knowledge (such as the purchase of the Property and when and how frequent Madam Nah and her children stayed at the Property). As for other matters he gave evidence on, they are matters which he said that he was told by his mother, Tan Kok Hooi (such as the conversations between Tan Kok Ping and his mother whereby allegedly threats were made if D did not sign the Two Documents and the purchase of the properties by the Deceased in Australia). 79.In all, I found his evidence of limited assistance. Tan Kok Hooi 80.Tan Kok Hooi also gave evidence for D. 81.There were a number of inconsistencies between her witness statements and oral testimony. These include:
82.In all, I also did not find her a credible and reliable witness. G. My Findings on the Agreed Issues Is the Deed of Gift liable to be set aside by reason of mistake 83.In light of the authorities discussed above, I shall consider whether there is clear and cogent evidence that the Deceased was mistaken as to the legal character or nature of the Deed of Gift. 84.Clearly, there is no direct evidence from the Deceased that he was mistaken as to the legal character or nature of the transaction when he signed the Deed of Gift. 85.In the Closing Submissions of Ps, it was stated: “Ps’ case is that there was an Arrangement where D would be gifted 50% of interest in the Property. These express representations were made by the Deceased during his lifetime. But the existence of the Deed of Gift is inconsistent with the Arrangement. This forms the thrust of showing that there was the Mistake.” Plainly, Ps’ case on mistake depends on the existence of the Arrangement which they bear the burden of proof to demonstrate but I am not so satisfied. 86.Firstly, the Arrangement is not supported by any contemporaneous document. Even accepting that between family members not all conversations would be recorded in writing, given that it is clear that the Deceased was a prudent businessman and made estate planning well before he eventually passed away by executing various wills in three jurisdictions (Hong Kong, Australia and Malaysia) with the assistance of local lawyers, if the Arrangement existed, it would have been recorded in some contemporaneous document. 87.Secondly, the Arrangement is contrary to the contemporaneous documents prepared by legal professionals and executed by the Deceased:
88.Even leaving aside the Deed of Gift, which Ps challenged, whether the Deceased truly understood its effect despite the interpretation, Ps accepted that the Deceased understood the Will which was also translated to the Deceased in Punti. No doubt if the Will did not reflect his intentions, in particular concerning the disposal of the Property upon his death, he would have rectified it or made another will. 89.Thirdly, in so far as Ps rely on the evidence of Tan Kok Ping and Tan Kok Pooh of the Arrangement, I found both of them not credible and reliable. Tan Kok Ping merely asserted that the Deceased had mentioned to him and his siblings that he wished to put into effect the Arrangement and in around March 2004, the Deceased told him and his siblings that he had instructed SKWL to put the Arrangement into effect. No particulars were given as to when or where or the words used by the Deceased. If that was the case, SKWL would not have prepared the Deed of Gift and the Will in those terms which as explained above is contrary to the Arrangement. Moreover, their evidence is also contradicted by their subsequent conduct in seeking D to sign the Two Documents for the Property to be sold which is plainly contrary to the Arrangement. 90.I next turn to what in Ps’ Closing Submissions were submitted as “key factual findings” which “further tilt the balance in favour of finding that the Mistake was operative”. 91.Firstly, it was submitted that contrary to D’s case that the Property upon the passing of the Deceased belonged to D solely, the outgoings of the Property remained paid from the Deceased’s bank account. No provisions were made by the Deceased for the payment of the outgoings when D had never worked and had no income. It was only by letter from D’s solicitors to the property managers of the Property on 18 July 2024 that enquiries were made on the outstanding fees and contribution to the renovation works and D paid for them in August 2024. [28] However, with the bequests to D in the Penangite Will which included the Silverton Condominium (where both D and the Deceased resided as evident from the address stated in the Will and Deed of Gift) and RM200,000[29], it cannot be seriously suggested that D would have no ability to pay for the Property’s outgoings. Rather, the fact of the matter must be that with the taking away of the title deeds, the changing of the locks and the assertion that the Property did not belong to D and had to be sold (by requesting D to sign the Two Documents), D was not able to pay for those outgoings. 92.Secondly, it was submitted that the acceptance by D in her witness statement that the Deceased and D did not mind letting Madam Nah’s children stay at the Property and D would lend them the keys[30] is consistent with the Arrangement and thus the creating of a joint tenancy was a mistake. However, the fact that during the Deceased’s lifetime, he and D would allow all his children to stay in the Property is hardly surprising and is equally consistent with the Property being jointly held by them. In my view, this fact is unequivocal to the intention of the Deceased in respect of the ownership of the Property after he passed away. 93.Thirdly, it was submitted that because the Deceased would not have known who would have pre-deceased the other, it would be contrary to common sense to take on a risk to have the Property held on joint tenancy. It was submitted that if D pre-deceased the Deceased, then D’s children would not have any share in the Property. As in this case, the Deceased passed away before D, Madam Nah’s children would be at the mercy of D and cannot use the Property. However, it is clear that this submission is premised on there being the Arrangement and the alleged unintended consequences flowing from the Property being held on joint tenancy. 94.Fourthly, it was submitted that as the Deed of Gift was interpreted by Rebecca Leung who was not legally qualified to provide legal advice, she did not explain the effect of the Deed of Gift to the Deceased, in particular, the effect of joint tenancy and whether creating a joint tenancy would help with the Deceased’s estate planning goals. In this regard, I have already accepted the evidence of Au Yeung as credible and that Rebecca Leung was a very experienced staff who interpreted the Deed of Gift to the Deceased in Punti. I also accepted the evidence of Au Yeung and SF Wong, that SK would have taken instructions from the Deceased. Given it is not Ps’ case that no proper instructions were taken from the Deceased to ascertain his intentions and the Deed of Gift and the Will did not properly reflect the instructions of the Deceased, I cannot see what basis there is to assert that prior to signing the Deed of Gift, the Deceased was not explained the effect of the joint tenancy. 95.Furthermore, it is more likely than not that the Deceased already had an understanding of the concept of joint tenancy when in 2000 and 2002 he had purchased properties in Australia as joint tenants. Again, there is no suggestion that as professionals, the Deceased’s Australian lawyers did not explain the distinction of between joint tenancy and tenancy in common (which Mr Tam confirmed that he did not dispute that those concepts had the same meaning as under Hong Kong law) prior to the Deceased’s execution of those documents. Given that property can be held by two owners in these distinctly different ways in Australia, in discharge of their professional duties, I would expect that the Australian lawyers would have explained those concepts and taken instructions on whether the acquired property should be held as joint tenancy or as tenancy in common. It was also submitted that there would have been language barriers between Australian lawyers and the Deceased but I do not accept that the Deceased would not have some rudimentary understanding of English and even if he did not, as an experienced businessman, he no doubt would have engaged the assistance of an interpreter to understand and benefit fully from the legal services that he had paid for. 96.The fact that in 2008, the Deceased and Tan Kok Hooi severed their joint tenancy for the Freshwater Place Apartment puts beyond doubt that at least by 2008, the Deceased must have known the effect of joint tenancy. Had he not intended the Property to be held on joint tenancy, no doubt he would have given instructions to SKWL to rectify the Deed of Gift and make another will but up to the date of his death in 2019, this was not done. Whilst Mr Tam in closing submissions faintly suggested that the Deceased might have overlooked the Will or the Deed of Gift, but as evident from the opening paragraph of the Penangite Will in 2013, the Deceased was well aware of his earlier testamentary disposition: “This will shall not revoke or have any effect on my earlier testamentary dispositions made relating to my moveable and immovable properties located in Hong Kong, Australia and elsewhere”.[31] 97.Fifthly, it was submitted that if the Deceased had really intended for D to be the sole owner of the Property upon his passing away, the Deceased could have bequeathed the Property in the Will without incurring stamp duty. However, it was not disputed that any stamp duty would not have been a substantial sum. On the other hand, in 2004, estate duty had not been abolished so to bequeath the Property in the Will would also have incurred costs. 98.Sixthly, it was submitted that there was no general rule or plan that the Deceased only gifted real estate to women and business equities and cash to men. Even so, Ps cannot dispute the Deceased intended to gift some interest of the Property to D (but their case is only half). This submission does not advance Ps’ case any further. 99.Having considered all of Mr Tam’s submissions, I am not satisfied on a balance of probabilities that the Deceased was operating under a mistake as to the legal character or nature of the Deed of Gift when he executed the same. The Deed of Gift is not to be set aside by reason of mistake. My answer to this issue is no. Whether the Deed of Gift is void ab initio by reason of non est factum 100.Given that the factual basis relied upon for non est factum is the same as that relied upon for Ps’ case that there was a mistake, the Deed of Gift is not voidable on this ground. Mr Tam accepted that if this court finds that there was no mistake, then Ps would not be able to persuade the court that the Deceased was unable to understand the Deed of Gift or that it was fundamentally or radically different from what he believed he was signing. My answer to this issue is also no. Who is the beneficial owner of the Property after the Deceased passed away 101.It follows from my finding that the Deed of Gift is not liable to be set aside by reason of mistake and/or non est factum, that D was the sole beneficial owner of the Property after the Deceased passed away. Whether Ps wrongfully interfered with D’s rights, possession and enjoyment of the Property by changing the locks and keeping the title deeds to the Property 102.It was not disputed that in March 2019, the locks of the Property were changed by Tan Ee Ling without giving a copy of the new key to D. The changing of lock to prevent the owner from entering and using their land is trespass: see Tort Law and Practice in Hong Kong, 4th Edn, §10-049. 103.In any event, there is also no dispute that after the visit to the Property when the Deceased’s safe was opened, the title deeds of the Property were kept by Tan Kok Pooh. 104.Being the owner of the Property, D has the proprietary right to the possession of the original title deeds of the Property: see Cheng Yuen Fai (a mentally incapacitated person suing by his son and next friend Cheng Kwok Wai) v Cheng Kwok Leung [2020] HKDC 62 per HHJ Kent Yee at §53. 105.I am satisfied by the retention of the title deeds, this also constituted interference with D’s rights, possession and enjoyment of the Property as sole owner of the Property. Quantum of damages: whether D is entitled to claim mesne profits of the Property at the market rent from March 2019 until delivery of vacant possession 106.As held by Ng J in Ho Kueng & Ors v Lau Yuet Hing [2023] HKCFI 6 at §143, the normal measure of damages is the ordinary letting value of the property for the period of wrongful occupation or user, irrespective of whether the plaintiffs would have let the property out to someone else. In that case, the learned judge ordered the defendant to pay to the plaintiffs mesne profits from 1 November 2016 being the day after the deadline by the plaintiffs’ solicitors for the defendant to demand vacant possession of the property with interest at the rate of prime plus 1% from 1 November 2016 to judgment and thereafter at judgment rate until full payment. 107.Mr Tam submitted that mesne profits should only be calculated from the earliest date of the first demand for the keys and title deed i.e. 23 March 2021[32]. He also submitted that interest should be at half judgment rate up to the date of judgment and thereafter at judgment rate. He referred to Lee Yun Sau v D H Shuttlecocks Limited (unrep) HCA 1459/1991, 21 May 2002 (see §§47 and 56). In P’s supplemental list of authorities, it was further submitted that there are conflicting authorities on whether pre-judgment interest on mesne profits should be awarded as all. 108.On the other hand, in closing submissions, Mr Chong sought mesne profits from early March 2019 and submitted that interest ought to be payable on mesne profits at prime plus 1%. In his supplemental authorities, he referred to the cases of The Hong Kong Polytechnic University v Rehabaid Society [2023] HKCA 956 (see §65), Ho Kueng & Ors (see §148) and Tang Lui Leo v Wong Elaine [2020] HKCFI 3087 (see §81). This seems to be consistent with the supplemental authorities cited by Mr Tam such as the Court of Appeal decisions in Komala Deccof & Co. SA and Others v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) [1984] HKLR 219 (223G-H) and Chow How Yeen Margaret v Wex Pharmaceuticals Inc [2018] 3 HKLRD 163 (§§49-51) that the conventional or starting rate for pre-judgment interest is prime plus 1%. There is no basis for me to depart from this and I am not persuaded by Mr Tam’s submissions to do so. Whilst there have been cases the courts have refused to award interest on mesne profits, these appear to be cases where the court took the view that to do so would over compensate the plaintiff: see as explained by Anthony Chan J (as he then was) in Ho Yat Wah v Chung Hang Him, the Sole Executor named in the Will of Madam Chan Yuk Mui, deceased [2024] HKCA 378 at §§65-69. 109.In the present case, bearing in mind that on D’s case that she was advised that she was the sole owner of the Property in February 2019 but there is no evidence of any demand for the keys and title deeds until the letter to YP from D’s solicitors dated 23 March 2021, I agree that mesne profits should be calculated from then. 110.The monthly market rent for the Property as assessed by the valuation expert Mr Jack Chan (“the Expert”) was not disputed. Accordingly, I assess mesne profits for: (1) 23 March 2021 to 22 March 2022 to be HK$421,200; (2) 23 March 2022 to 22 March 2023 to be HK$439,200; (3) 23 March 2023 to 22 March 2024 to be HK$440,400; (4) 23 March 2024 to 22 March 2025 to be HK$440,400; (4) 23 March 2025 to 22 March 2026 to be HK$440,400; and (5) thereafter at HK$1,223 per day (or HK$36,700 per month) until date of actual possession. 111.Furthermore, I take the view that it is appropriate to award interest on mesne profits in the circumstances of this case. This is because mesne profits is calculated on the basis of “notional rent” as at the various dates of valuation from 9 February 2019 to 9 February 2023 but were not calculated at the date of judgment by the Expert[33], and did not contain any element which might reflect the loss of use of the “notional rent” which would have been payable since March 2021. I therefore will allow on mesne profits at prime plus 1% from 23 March 2021 until date of judgment and thereafter at judgment rate until payment. H. Costs and Orders 112.Mr Chong sought costs on an indemnity basis against Ps which was opposed by Mr Tam. 113.It was not disputed that costs are generally awarded on a party to party basis. To justify costs on an indemnity basis, the receiving party must show that the case has some “special or unusual feature”. The court’s discretion may be exercised in relation to (but is not limited to) cases “brought with an ulterior motive or for an improper purpose or where there is some deception or underhand conduct on the part of the losing party”. However, such improper conduct generally relates to the conduct of the litigation rather than conduct which constituted the cause or matter giving rise to the litigation. See Libertarian Investments Limited v Thomas Alexej Hall (unrep) FACV 14/2012, 11 March 2014 at §6 per Ribeiro PJ. 114.Having considered all the submissions of counsel, I am not persuaded that the matters relied upon by Mr Chong, whether individually or collectively, justify an award of costs against Ps on an indemnity basis. 115.Mr Chong submitted that Ps relied on the Arrangement but did not have evidence of the Arrangement. He also referred to the fact that despite asserting that D had 50% beneficial interest in the Property, the claim for rescission of the Deed of Gift and the declaration sought contradicted their case. Further, Ps refused to provide D with the keys despite D’s repeated demands. However, essentially these all go to the merits of Ps’ claim but even in cases where severe adverse findings are made against the defendant this does not ipso facto justify an indemnity cost. See e.g. Libertarian Investments Limited, §7, KJ v KLML (unrep) HCMC 4/2010, 21 May 2014, §22 per To J and Kao, Lee & Yip (a firm) v Midland Realty International Limited (unrep) HCA 2153/2007, 31 March 2010, §18 per DHCJ Lisa Wong SC (as she then was). 116.As for the submissions that P’s own handling solicitors Au Young was available and present throughout the trial but Ps never deemed it appropriate to call her as a witness to offer any explanation regarding her advice, I cannot see how the failure to call Au Young could be said to amount to deception or underhand conduct on the part of the losing party. 117.I also disagree with the submissions that Tan Kok Ping was extremely hostile to D and her family as evident from the pre-action correspondence, his alleged involvement in removing Chang Chuen Hwa from his position in South Island Plastic, demanding that D signed the Two Documents, the alleged relocation of the Deceased’s resting urn as well as his evidence. I am not satisfied from these matters it can be demonstrated that these proceedings were brought with an ulterior motive and for improper purposes. Certainly, I do not regard the present litigation as very hostile. 118.For all the above reasons, I will order as follows:
Mr Keith Tam, instructed by Messrs Yuen & Partners, for the 1st to 3rd Plaintiffs (By Original Action) and 1st to 3rd Defendants (By Counterclaim) Mr KM Chong and Mr Alvin Chong, instructed by Messrs Rebecca VI Ho & Co, for the Defendant (By Original Action) and the Plaintiff (By Counterclaim) [1] See Consolidated Statement of Claim, §§7, 12-13 [A/1/6-7]. [2] See ibid, §§20, 22-29 [A/1/8-11]. [3] See Consolidated Defence and Counterclaim, §§4, 15-17, 23-26 [A/2/20, 23-24, 26-27]. [4] See ibid, §19 [A/2/24-25]. [5] See ibid, §§30-33 [A/2/28-29]. [6] See Wisniewski v Central Manchester Health Authority [1998] PIQR 324 at P340: (1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action. (2) If a court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness. (3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue. (4) If the reason for the witness’ absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified. [7] Day 1; morning. [8] Day 1; before lunch and afternoon. [9] Cross-examination of Tan Kok Ping: Day 1; afternoon. [10] Ibid: Day 1; afternoon. [11] Ibid: Day 1; afternoon. [12] [C/4/57]. [13] Cross-examination of Tan Kok Ping: Day 1; afternoon and Day 2: morning. [14] Cross-examination of Tan Kok Pooh: Day 2; before lunch. [15] Ibid: Day 2; before lunch. [16] See Supplemental Witness Statement of Tan Kok Ping, §56 [B/3/43]. [17] Cross-examination of Tan Kok Pooh: Day 2; afternoon. [18] Cross-examination of Tan Ee Ling: Day 3; morning. [19] See Witness Statement of Tan Ee Ling, §13 [B/4/51]. [20] Cross-examination of Tan Ee Ling: Day 3; morning. [21] See Witness Statement of Tan Kok Wei, §5 [B/7/66]. [22] Cross-examination of Tan Kok Wei: Day 3; morning. [23] Ibid: Day 3; morning. [24] See Witness Statement of Tan Kok Hooi, §§10-11 [B/8/75] [25] Cross-examination of Tan Kok Hooi: Day 4; morning. [26] Ibid: Day 4; morning. [27] [C/9/269]. [28] [C/8/238] and [C/8/260]. [29] [C/11/289, 291] [30] See D’s witness statement, §10 [B/6/62]. [31] [C/11/287]. [32] [C/65/458]. [33] [B/3/134]. |
Cases cited in this judgment
Further hearings and rulings under HCA 1148/2021