Sik Koon Fat v. Mok Yau Tak and Others
Read the full judgment text of HCMP 3555/1994 on BabelCite. This High Court CFI judgment was delivered on 5 September 2001.
1. This trial is concerned primarily with the claims of the 2nd, 3rd and 4th plaintiffs who seek a declaration that 27 share certificates of shares in HSBC Holdings plc (representing a total of 10,785 shares of HK$10.00 each before the share capital reorganisation of the company on 2 July 1999 and a total of 32,355 shares of US$0.50 each thereafter; "the HSBC shares") and 30 share certificates of shares in Great Eagle Holdings Ltd (representing a total of 30,000 shares of HK$0.10 each; "the Grea
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HCMP003555/1994 HCMP 3555/1994 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. 3555 OF 1994 ____________
____________ Coram: Hon Kwan J in Court Dates of Hearing: 19-22 June 2001 Date of Handing Down of Judgment: 5 September 2001 _______________ J U D G M E N T _______________ 1.This trial is concerned primarily with the claims of the 2nd, 3rd and 4th plaintiffs who seek a declaration that 27 share certificates of shares in HSBC Holdings plc (representing a total of 10,785 shares of HK$10.00 each before the share capital reorganisation of the company on 2 July 1999 and a total of 32,355 shares of US$0.50 each thereafter; "the HSBC shares") and 30 share certificates of shares in Great Eagle Holdings Ltd (representing a total of 30,000 shares of HK$0.10 each; "the Great Eagle shares") held in the name of the deceased Mok Kok Kuan also known as Mok Jue Yan ("the deceased") were held on trust for these plaintiffs. These plaintiffs claim that they had provided certain sums of money to the deceased to be invested in shares on their behalf and the shares referred to above were the investments that the deceased had made for them. The deceased had passed away in May 1991. The value of the shares in question, according to the schedule of property to the letters of administration, was HK$340,596.00. The shares have appreciated substantially and they are now worth over HK$3 million. The defendant, Mok Yau Tak, is a brother of the deceased and the administrator of the estate of the deceased. 2.The other part of the plaintiffs' claim herein concerns the 2nd to 7th plaintiffs and the 9th plaintiff and is not contested by the defendant. The claim is for a declaration that these plaintiffs are entitled to a contractual licence to live for the rest of their lives in a Buddhist oratory known as Tai Kok Lin Yuen (大覺蓮苑) built on Lot No. 210 in Ngong Ping on Lantau Island ("the said land"). The said land was registered in the name of the deceased. The claims of the 1st and 8th plaintiffs for this relief are no longer pursued as they had passed away before the trial of this action. 3.I should mention that initially there was also a claim of all the plaintiffs for a declaration that the deceased held the said land on a charitable trust for the promotion of the Buddhist religion. I understand this claim has been abandoned in 1996 after the Attorney General had made known to the plaintiffs that the oratory was not sufficiently open to the public and had declined to argue for the existence of a charitable trust. 4.The background and matters leading to the dispute may be set out as follows. The background 5.The deceased was a Buddhist monk. He bought the said land in 1968 for the price of HK$9,000.00 and in or about 1969, he had caused the oratory to be built on the said land. The plaintiffs herein, being all elderly ladies, were his disciples or followers. The 1st plaintiff was a Buddhist nun, the others are lay people. They have received little or no formal education. It is the plaintiffs' case that they had made specific donations to the deceased when the oratory was built or subsequently on the express understanding with the deceased that they would have the right to occupy a room or a bed space in the oratory, depending on the amount of their contributions, for the rest of their lives. The deceased was the monk in charge of the oratory from 1969 until he passed away on 13 May 1991. After his death, the 1st plaintiff became the nun in charge and after she died in 1998, a lay follower has become the person in charge of the oratory. 6.The 2nd plaintiff, who is now 71 years old, became a lay follower of the deceased before the oratory was built. She was then about 18 years old, so this would have been in 1948. She is illiterate and she had been working as an amah until she retired about three years ago. She has not married. She has been occupying a room in the oratory twice a year during the Buddhist festivals shortly after it was built and she has been living there since her retirement. Of the three plaintiffs who claim to have given money to the deceased to invest in shares on their behalf, the 2nd plaintiff had given the most amount of money to the deceased. The total amount of cash she had allegedly given to the deceased for this purpose was about HK$200,000.00. The 3rd plaintiff, now 83 years old, claims she had given HK$6,000.00 to the deceased to buy shares for her almost 30 years ago when she became his follower. The 4th plaintiff, who is 86 years old, claims she had given the deceased HK$10,000.00 to buy shares on her behalf. This was three or four years after she had converted to the Buddhist religion and according to a booklet she produced, she was converted at the age of 60, so this would have been in about 1978 or 1979. 7.For a number of years, the deceased had invested actively in the stock market in Hong Kong apart from holding other investments such as foreign currencies. At the time of his death, other than the HSBC shares and the Great Eagle shares, the deceased held a number of shares in other companies registered in his name or in the names of his nominees. He earned his living chanting prayers and performing Buddhist rituals. He had lived in Kowloon most of the time, only going to the oratory during the weekend. 8.On 15 September 1978, after the deceased had recovered from a serious illness, he appointed the 2nd plaintiff as his attorney to his safe deposit box at the Mongkok branch of the Hang Seng Bank ("the safe deposit box"). Initially, the deceased had asked the 1st plaintiff to be his attorney but she had declined as she was old and did not want to go to a bank as she was a Buddhist nun. Hence, the 2nd plaintiff was appointed instead. 9.A residential property was bought by the deceased in the Kincheng Building in Shenzhen ("the Shenzhen property") at RMB123,096.00 and this was registered in the joint names of the deceased and the 2nd plaintiff. It was purchased when the building was still under construction and payments by monthly instalment were made to the developer before the building was completed in May 1984. The 2nd plaintiff alleges that she had provided the whole of the purchase price and the deceased bought the Shenzhen property as an investment on her behalf. This is denied by the defendant. 10.In early 1985, a savings account was opened at the Hang Seng Bank in the joint names of the deceased and the 2nd plaintiff ("the joint account"). According to the bank passbook, HK$50,000.00 was deposited into this account on 12 January 1985 and HK$20,000.00 was deposited on 16 January 1985. On 29 August 1986, HK$70,000.00 was withdrawn. The 2nd plaintiff claims that she had made these deposits and the withdrawal was made by the deceased to purchase shares on her behalf. Again, this is denied by the defendant. 11.In October 1985, the defendant left the mainland to settle in Hong Kong. Initially, he had lived in Nam Cheong Street in Kowloon with the deceased for a few months. Then he found work in Lantau Island and he moved to live in the oratory for about a year. After that he moved back to Nam Cheong Street to stay with the deceased for almost a year. In or about 1987, he moved to a property in Yee On Street, Kwun Tong which was acquired by the deceased ("the Kwun Tong property") and later registered in the names of the deceased and the defendant as joint tenants. The defendant's wife came to Hong Kong in 1990 and she had lived in the oratory until 1998. 12.Share certificates for the HSBC shares were issued on 6 April 1991 after a scheme of arrangement had become effective for the exchange of shares of HK$2.50 at the ratio of 4 to 1 into shares of HK$10.00 in HSBC Holdings plc. The share certificates issued to the deceased were placed in the safe deposit box. 13.On 13 May 1991, the deceased passed away suddenly in Hong Kong, four days after the deceased's mother had died in Shenzhen. He was 64 years old. Two days after his death, the 2nd plaintiff went to open the safe deposit box in the company of another brother of the deceased, Mok Yau Kwai. She removed these documents from the safe deposit box: the passbook of the joint account; the share certificates of the HSBC shares and the Great Eagle shares; a duplicate copy of the title deeds of the said land; the original title deeds of the Kwun Tong property; and three savings passbooks in the name of the deceased at the Hang Seng Bank in US dollars, New Zealand dollars and Australian dollars. There were no other share certificates in the safe deposit box. She kept the passbook of the joint account, the share certificates of the HSBC shares and the Great Eagle shares, and the duplicate copy of the title deeds of the said land. The other documents were handed to Mok Yau Kwai the same day and later they were given to the defendant. 14.On 9 June 1993, the defendant obtained a grant of letters of administration of the estate of the deceased. According to the schedule of property annexed to the grant, the value of the estate was HK$2,861,401.60. The value of the shares in question was 11.9 % of the total value of the estate. Other shares owned by the deceased as disclosed in the schedule of property were worth HK$346,850.00 and they were as follows:
15.On 22 February 1994, the solicitors acting for the defendant wrote to the 2nd plaintiff demanding the return of the share certificates of the HSBC shares and the Great Eagle shares and the original title deeds of the said land. Unknown to the defendant and his solicitors, the original title deeds of the said land were kept by the 1st plaintiff. As the 2nd plaintiff had refused to deliver up the documents, the defendant issued a writ against the 2nd plaintiff on 15 July 1994 in High Court Action No. 6909 of 1994 seeking delivery of the share certificates and the title deeds of the said land. The defendant also brought legal proceedings against the 2nd plaintiff in Shenzhen in 1994 claiming a half share in the Shenzhen property. The court in Shenzhen decided in the defendant's favour and ruled that he is entitled to succeed to a half share in that property. 16.On 17 December 1994, the plaintiffs issued the originating summons in these proceedings. On an application to consolidate the two actions in the High Court, an order was made on 13 June 1995 by which the originating summons was converted to a writ procedure and HCA No. 6909 of 1994 was stayed. 17.On 2 July 1999, the share capital reorganisation of HSBC Holdings plc became effective and shareholders were issued shares of US$0.50 for every one ordinary share of HK$10.00 held. The new certificates were issued on 3 July 1999. As the exchange of shares was made without the need to return the old certificates for cancellation, the defendant has held the new share certificates. 18.Crucial to my decision is my assessment and evaluation of the 2nd plaintiff's evidence. The defendant has no direct personal knowledge of the deceased's investment in shares on behalf of the 2nd, 3rd and 4th plaintiffs as alleged and he simply puts them to proof that the deceased had invested in shares for them with their moneys and the share certificates in the safe deposit box represented the shares purchased on behalf of these plaintiffs. Before I turn to the 2nd plaintiff's evidence, I will set out my findings about the deceased. The deceased 19.Although the deceased was a Buddhist monk, he had maintained close ties with his family. He was brought to Hong Kong by his master before 1948. He came from a family with nine siblings. The defendant is the youngest of the siblings. The deceased was ranked the third among the siblings. Some of the siblings had stayed in the native village in the Guangdong province when the deceased came to Hong Kong, others had subsequently gone to live in Taiwan. The deceased appeared to be a filial son and caring brother. Since 1948, he had been asking his mother and siblings to come to Hong Kong. He made three applications for them to leave the mainland, in 1958, 1981 and 1983. Eventually, he was successful in applying for the defendant to come to Hong Kong to settle. The deceased arranged for his mother and the defendant's family to live in a flat in Shenzhen rented by him and when the Shenzhen property was ready for occupation, he moved them to that property where they lived for several years. Later, he purchased a bigger property for them in Shenzhen and they moved out of the Shenzhen property. He also looked after the defendant when he came to Hong Kong. As mentioned above, the defendant was provided with accommodation and the Kwun Tong property was registered in the names of the deceased and the defendant as joint tenants in August 1990. 20.To his disciples, the deceased was regarded as a kind-hearted man and was a well respected master. The 2nd, 3rd and 4th plaintiffs all testified that he was like a father to them, although he was actually younger than the 3rd and 4th plaintiffs and only a few years older than the 2nd plaintiff. On these plaintiffs' evidence, they were prepared to trust him with their life savings. 21.Looking at the two letters written by the deceased, he would appear to be a man of some education. He had made a record of his earnings from prayer chanting for some years in two notebooks and they were produced in evidence. The earlier period covered by these notebooks was from 1968 to 1973 and the average monthly earnings had ranged from HK$1,460.00 to HK$2,039.00. The latter period was from 1985 to the third lunar month in 1991, shortly before his death. The average monthly earnings for this period had ranged from HK$6,400.00 to HK$17,638.00. Thus, he was earning a steady income from prayer chanting. 22.The oratory built by the deceased in 1969 would appear to have been operated smoothly in his lifetime. There would appear to be sufficient funds generated for the upkeep of the oratory. Records were produced of the amounts paid by the disciples for the use of a room or bed space in the oratory. There were also records of the donations received from worshippers from 1972 to the eighth lunar month of 1990. The annual donation for 1972 was HK$7,490.00 and that for 1990 was HK$75,170.00. The defendant mentioned that fees were received from worshippers who put up tablets of their ancestors in the oratory although there was no record as to the amounts received in this regard. 23.The deceased would seem to have invested fairly actively, extensively and with some success judging from the assets he had acquired at the time of his death. He owned the oratory, the Kwun Tong property and a property he bought in Shenzhen for the defendant's family. He had eight bank accounts and some of them were in foreign currencies. The total amount in his bank accounts came up to approximately HK$1.8 million. And there were shares with a total value of about HK$680,000.00, of which the shares in dispute formed half of the total value of the shares in the estate. 24.I do not doubt that the deceased would have sufficient means to invest in the shares in dispute. The question is whether he had done so on behalf of and with the moneys provided by the 2nd, 3rd and 4th plaintiffs as they have alleged. It is not in dispute that no claim was made by any of these plaintiffs to the shares during the lifetime of the deceased. No documentary evidence was produced in support of any of the alleged investments. Mr Wong Po Wing, who appeared for the defendant, submitted that I should be alive to the likelihood of false claims against the estate and that I should not accept the plaintiffs' evidence unless it is clear and convincing. With that caveat in mind, I turn to consider the plaintiffs' evidence. The 2nd plaintiff 25.The 2nd plaintiff is an uneducated, unsophisticated and simple-minded person. Indeed, these descriptions apply equally to the 3rd and 4th plaintiffs, the difference between them is only a matter of degree. Reckoning by calendar years has no meaning for her. She is quite incapable of answering a question as to when a certain event had happened. This has led to difficulties in her evidence and her giving inconsistent answers that may seem impossible to reconcile. She does seem to retain quite a good memory of the sequence of events though and she has no apparent difficulty in placing the events with regard to her own age when they occurred. Being illiterate, she is unable to keep records to assist her memory. Although she can recognise figures, she does not appear to have a good grasp of figures and she cannot do arithmetic. 26.I will first consider her evidence about her income and resources. As mentioned earlier, the 2nd plaintiff worked as an amah for her entire working life and she started working at the age of 18, the year she became the deceased's disciple. When she was 21, she went to work for Mr Lok Tin Yee and she remained with Mr Lok's family for 32 years. She brought up two sons of Mr Lok. She was paid HK$60.00 a month in the beginning and by the time she left Mr Lok's employment, her monthly salary was about HK$5,000.00 odd. She claims that when her employment with Mr Lok was terminated, he gave her HK$100,000.00 in recognition of her services. The amount was given to her in cash and she gave it all to the deceased to invest for her in shares. 27.After leaving Mr Lok, the 2nd plaintiff went to work for Madam Cheung Ching Yat and served this employer for eight years. She was working for Madam Cheung at the time of the deceased's death. Her wages then were HK$4,000.00 a month. Her employment was terminated when her employer immigrated to Canada. She alleges that half a year before her employer left, she was asked to stay on to help until the last day and her employer gave her HK$70,000.00 in cash as a reward. Again, she gave this sum to the deceased to invest in shares for her. 28.After Madam Cheung, the 2nd plaintiff went to work for a Mr Ho and remained in his employment for five years until he immigrated to the United States. She was paid HK$3,500.00 a month. At first, she gave evidence that Mr Ho gave her HK$50,000.00 upon the termination of her employment and she deposited this into the joint account on 12 January 1985 and the amount was used by the deceased to buy shares for her when he withdrew HK$70,000.00 from the joint account in August 1986. Later, she changed her evidence and stated that the deposit of HK$50,000.00 in 1985 was not given by Mr Ho and that she could not remember what amount he had given her. I should also mention that it was not pleaded in her Defence filed in 1994 that she had received any money when she left the employment of Mr Ho whereas it was pleaded that she had received the aforesaid sums from Mr Lok and Madam Cheung. 29.Mr Nelson Miu, who appeared for the plaintiffs, submitted that the 2nd plaintiff must have been mistaken about the sequence of events and that she must have worked for the three employers in this order, Mr Lok, Mr Ho and Madam Cheung, and not in the order mentioned by the 2nd plaintiff. This submission was made because the sequence of employers related by the 2nd plaintiff did not seem to tally with other parts of her evidence and with her initial evidence about the deposits made in the joint account as evidenced by the passbook. I do not think the 2nd plaintiff was mistaken about the sequence of her employers. I have worked out the years in which various events had occurred with reference to the year of birth of the 2nd plaintiff and her ages and I have found that the time and sequence of the events related by her were substantially correct and supported by other parts of her evidence. The events in chronological order are as follows:
30.The 2nd plaintiff appeared confused when she was asked about the two deposits of HK$50,000.00 and 20,000.00 into the joint account in January 1985. In her examination in chief, she stated that these sums totalling HK$70,000.00 were given to her by Madam Cheung when she left her employment. This cannot be correct, as she was clear she was still with Madam Cheung when the deceased died in 1991. Under cross-examination, she changed her evidence and stated that the deposit of HK$50,000.00 was given to her by Mr Ho. This cannot be correct either, as she was quite sure she had worked for Mr Ho after she left Madam Cheung's employment. When I questioned her at the end of her evidence, she changed her evidence again and stated that she could not recall who gave her the HK$50,000.00 which was deposited into the joint account. 31.Was she being untruthful in giving inconsistent evidence or was she genuinely confused and unable to recall some of the events? I have observed her closely in the witness stand. As mentioned earlier, reckoning by calendar years does not mean a thing to her. Whether an amount of money was given to her in 1985 or in any other year would not have made much difference to her, as that is not the way she has remembered things. She did not always understand the questions put to her but did not inform the court about it. I only managed to elicit this from her when I noticed she looked perplexed or when her answers did not seem to make sense to me. I had to admonish her quite firmly that she should not say the first thing that came into her head or agree readily with what was suggested to her and that she should make sure that she understood what was asked before she was to give an answer. 32.I have considered her evidence thoroughly and paid special attention to the inconsistent answers she gave including those I have not specifically mentioned in this judgment. I do not think the 2nd plaintiff was a dishonest witness. In my view, the inconsistent answers she gave were not because she had lied deliberately or because she had to make up something to cover up a falsehood. I find that she was, on the whole, a truthful witness. She was quite incapable of embellishing her evidence. When she was asked about the things the deceased had said to her or what he had not told her, it would have been easy for her to give answers that would tailor with her case if not advancing her interest. However, some of the answers she gave in this respect would seem to go against her interest. Her lack of understanding of some of the questions put to her and confusion as to the dates could not have been pretence. 33.Her evidence that the joint account was opened at the suggestion of the deceased for her to deposit sums which he would withdraw to buy shares for her would appear to have been borne out by the pattern of deposits and withdrawals in that account, as submitted by Mr Miu. The defendant gave evidence that the 2nd plaintiff had told him on an occasion in November 1985 that the deceased had made quite substantial profits in investing in shares, that the money in the joint account had belonged to the deceased, and that the joint account was opened so that the 2nd plaintiff could make withdrawals on behalf of the deceased if he was not free to do so. I reject the defendant's evidence on this. 34.Other than the two deposits in January 1985, there were no substantial deposits. The 2nd plaintiff's evidence was that she made the opening deposit of HK$500.00 and the two deposits in January 1985 and that the passbook of the joint account was kept all along in the safe deposit box. It is a telling feature that of the two deposits of HK$20,000.00 and HK$50,000.00 paid into the joint account within four days in January 1985, she was able to recall that the deposit of HK$20,000.00 was by a bank draft and this was borne out by the entry in the passbook, something she could not have known about. The deposits of HK$6,000.00 in February 1987, HK$4,000.00 in April 1988 and HK$9,000.00 in May 1990 were not made by her. Although the 2nd plaintiff did not make the three small deposits herself, it is not improbable that the funds could have come from her, as Mr Miu has submitted. It is unnecessary to speculate about this. The deposits that I have mentioned were the only deposits in the joint account apart from credits for interest. There was only one withdrawal from the joint account before the deceased's death and that was in the sum of HK$70,000.00 in August 1986. I agree with counsel's submission that it would make no sense if the joint account was to be used for the deceased's own benefit as one may wonder why he had made deposits in 1987, 1988 and 1990 and not used the money at all. The lack of movements in the joint account would make sense if this was used to hold the moneys of the 2nd plaintiff entrusted to the deceased. 35.I am mindful of the fact that the 2nd plaintiff could not recall who gave her the HK$50,000.00 which she deposited into the joint account. As for the HK$20,000.00, she said it was withdrawn from her account with HSBC and the amount was saved up from her wages. From what I learned of the 2nd plaintiff's earnings from her wages as an amah and the tips she received from mah-jong games hosted by her employer regularly, she would seem to have a steady source of income. Other than making donations to the oratory in Buddhist festivals twice a year, and remitting money to her family in the native village from time to time ranging from several hundred to a thousand dollars, she had no occasion to spend money as a live-in amah. I am satisfied that both the deposits in 1985 had come from the 2nd plaintiff's own funds. I also find she was mistaken when she said in evidence initially that she did not have a bank account of her own until three or four years ago. She had forgotten about her account at HSBC from which she withdrew HK$20,000.00 to purchase a bank draft which she deposited into the joint account in 1985. According to her, she did not like using a bank account as she found it troublesome and she had seldom deposited money into her own bank account. This sort of thinking was not unusual among those of a similar personal and social background. I do not think she was trying to hide from the court she had a bank account in 1985, as submitted by Mr Wong. 36.The Shenzhen property is another piece of evidence that would appear to lend some support to the 2nd plaintiff's case. According to her, she provided the entire purchase price of RMB123,096.00 and she had given the money to the deceased to pay the monthly instalments. The property was registered in the joint names of the 2nd plaintiff and the deceased because she had intended that half of the rental receipts should go to the upkeep of the oratory as her donation in her lifetime (this was actually given by the deceased to the defendant for the maintenance of the defendant's family in Shenzhen and it is not clear if the 2nd plaintiff had known about this) and after her death, her half interest should also go to the oratory. She did not intend to give a half share of the Shenzhen property to the deceased for his personal benefit although she had agreed to allow the defendant's family to reside there for several years before it was let. 37.As mentioned earlier, it was decided by a court in Shenzhen that the defendant is entitled to succeed to the deceased's half share in the Shenzhen property. As I have no idea of the evidence adduced before that court, I do not propose to attach weight to that decision, as submitted by Mr Wong. The defendant gave evidence that it was the deceased who had provided the entire purchase price, something that was not put to the 2nd plaintiff in cross-examination. When he was asked as to why the deceased had given a half share to the 2nd plaintiff if she had not provided any part of the purchase price, initially he said that the intention was that the 2nd plaintiff could go and live there and subsequently he said it was because the deceased had considered the 2nd plaintiff as one of his family. I reject the defendant's evidence as incredible. Being the filial son and caring brother that the deceased was, it is inconceivable that he did not allow one of his own family members in Shenzhen to be registered as co-owner with him. I find that the entire purchase price was provided by the 2nd plaintiff. The Shenzhen property demonstrated that the 2nd plaintiff had on another occasion entrusted the deceased with her money to make an investment in a property which was registered in their joint names. 38.Mr Wong has attacked the 2nd plaintiff's evidence as vague concerning the money she had given to the deceased for investing in shares, her conflicting evidence as to the value of the shares bought for her and the virtual absence of documentary evidence to support her allegation other than the passbook of the joint account. I ask myself whether there are good explanations for these deficiencies. 39.The 2nd plaintiff was unable to tell the court the total approximate amount she had given to the deceased for investing in shares, nor could she recall each and every occasion she had given money to the deceased to invest in shares and details. Is this so very astonishing considering her illiteracy and inability to do arithmetic? She has however identified three sums which she said positively were given to the deceased for buying shares. These were the HK$100,000.00 she received from Mr Lok, the HK$70,000.00 she received from Madam Cheung and the deposits of HK$70,000.00 which she put into the joint account. 40.As for the total approximate value of the shares bought for her, she said in her evidence in chief that the deceased had told her that the total amount of her shares was worth a few hundred thousand dollars. It was pleaded in her Defence filed in 1994 and repeated in her witness statement that in early 1991, she had asked the deceased what was the value of her shares and he had told her that her shares were worth about HK$300,000.00, which tallies with the value of the shares in the schedule to the letters of administration. Under cross-examination, she said she had not asked the deceased and he had not told her what her shares were worth. She could not explain why the figure was mentioned in her pleading and her witness statement. I do not attach a great deal of importance to this, as she has obviously no head for figures. I am sceptical if the deceased had indeed told her that her total investment of shares was worth about HK$300,000.00, but I do not think this has seriously undermined her credibility. The 2nd plaintiff was able to recall some of the shares the deceased had bought for her over the years, as she had learned from the deceased. She has named some of them and they included shares in Hong Kong Land, Diary Farm, Hang Seng Bank, HSBC and New World Holdings. 41.The 2nd plaintiff was unable to say what loss or profit was made regarding the shares the deceased had bought and sold on her behalf. She had never asked him to account to her and the deceased had never given her any money in respect of the profit he had made. She said in evidence that the profits from share dealings were "all deposited", but it has not been clarified with her where the moneys were deposited. Until the incident that I am about to deal with, she had not given a thought to have the shares registered in her name instead of in the deceased's name. She had left it entirely to the deceased to decide which shares to buy and sell, and although he would occasionally tell her that she would make a loss if certain shares were sold she would invariably let him decide. I do not find her behaviour strange or inexplicable, given her background and her relationship with the deceased. They had known each other for many years. She was a faithful disciple to the deceased and had looked up to him as a father. She had trusted him entirely. He had complete trust in her too in that he made her his attorney to have access to the safe deposit box in 1978. 42.I reject the suggestion that the 2nd plaintiff was deceitful or opportunistic in asserting her claim to the shares only after the deceased had passed away. She has impressed me that she holds a strong belief that the shares in the safe deposit box are rightfully hers. She asserted her claim to the shares by refusing to hand over the share certificates right after the safe deposit box was opened. It is worth noting that it was the 2nd plaintiff who had volunteered the information to the deceased's family that there were items belonging to the deceased in the safe deposit box on learning about the deceased's death. That was how it came about that she had opened the safe deposit box accompanied by one of the deceased's brothers Mok Yau Kwai two days after his death. She kept the share certificates, which she believed to belong to her for the reasons I will deal with below, the passbook of the joint account and the duplicate of the title deeds of the said land (which she identified by a photograph of the deceased attached to it and she gave this to the 1st plaintiff) and returned all the other items to Mok Yau Kwai. If she had wanted to cheat the deceased's family, she could easily have removed some of the items from the safe deposit box in advance. 43.The 2nd plaintiff gave evidence how and why she has regarded the share certificates in the safe deposit box as belonging to her. She mentioned that the deceased went to visit his mother in Shenzhen when she was sick and came back to Hong Kong after she had passed away. He had spoken to her about the shares on his return to Hong Kong. This conversation would have taken place shortly before the deceased's death on 13 May 1991. The deceased gave her a packet containing the share certificates of the HSBC shares and the Great Eagle shares and told her to put the packet in the safe deposit box. He told her these were her shares and he would like to transfer the shares back to her after all matters relating to his mother were settled. She therefore placed the share certificates in the safe deposit box. 44.It was only under cross-examination that the 2nd plaintiff mentioned for the first time that deceased had told her he would like to transfer the shares back to her. Was this a recent fabrication or was this because she genuinely recalled this when she was pressed in questioning? Having considered the 2nd plaintiff's evidence in the round, I am inclined to think she did not make this up. This would also explain why in handing over the packet to her, the deceased had told her to put it in the safe deposit box to which he would have access as he would transfer the shares to her name. I think this would be too sophisticated for the 2nd plaintiff to think of. 45.I make these principal findings of fact on the evidence:
46.It was submitted by Mr Wong that for the 2nd plaintiff to succeed in her claim, there must be certainty of the subject matter of the trust property and she would need to establish "the means of identifying or distinguishing the subject matter of the trust" (Re CA Pacific Finance Ltd (In Liquidation) & Anr. (No. 1) [1999] 2 HKC 632 at 647I to 648I). Here, as one does not know the quantity or kind of shares that were purchased so as to form the subject matter of the resulting trust, it is necessary to consider "segregation or appropriation as a means of identifying [the shares]". Mr Miu did not dispute the above proposition but submitted that in the case of the 2nd plaintiff there was clearly segregation or appropriation if I accept the 2nd plaintiff's evidence of the deceased's words and conduct in handing over the packet of share certificates to her in May 1991. I think that is right. 47.For the sake of completeness, I should mention that I have considered the defendant's evidence but I do not think what he said is of any material significance to what I have to decide. I attach no importance to the fact that the deceased had written to the authorities in China in support of the defendant's application to be issued with a one way permit that the purpose of the application was to ensure that if the deceased should pass away, his assets would be taken over by his brother and would not go to an outsider. I also attach no significance to the defendant's evidence that the deceased had never told him that he had bought shares on behalf of the 2nd plaintiff or any one else, even if that were true. I reject the defendant's evidence that the deceased had told him that the moneys in two of the foreign currency accounts did not belong to him but were held in his name for two of his brothers, Mok Yau Chuen and Mok Yau Kwai. I do not know why this evidence was introduced, as it has not been suggested that the deceased would have told the defendant which of the properties or assets held by him did not belong to the deceased beneficially in the expectation that the defendant was to administer the estate when the deceased passed away. In any event, I reject this evidence as incredible. The defendant has alleged that the money in the NZ dollar account had belonged to Mok Yau Chuen, who had passed away two or three years before their mother died in May 1991. He was asked to identify which of the bank accounts in NZ dollar had belonged to this brother, as there were two such accounts in the schedule to the grant. He pointed to the account with a balance of the exact sum of NZ$50,000.00 as belonging to this brother. I think this is highly improbable, as this brother had passed away two or three years before 1991. Any savings of this brother in NZ dollars would have accumulated interest in the interim. 48.In summary, I find that the 2nd plaintiff has established her claim over the shares in question. I turn to consider the claims of the 3rd and 4th plaintiffs. The 3rd plaintiff 49.The 3rd plaintiff claims that she had given HK$6,000.00 to the deceased almost 30 years ago to purchase shares on her behalf. The deceased had told her at the time that he would buy HSBC shares for her and he informed her later that HSBC shares had been bought. She did not know the quantity of shares purchased. She too is illiterate, like the 2nd and 4th plaintiffs. She had been working as a knitter of towels and she retired about ten years ago. She gave money to the deceased to invest in the hope that this would provide some security for her when she was old. She had also paid for a room in the oratory and had followed the deceased as his disciple for a long time. After giving the deceased the money, she did not think that the deceased would have to give the shares to her but he was to "save up" for her and give her the money when she got very old. She had not asked for the money before the deceased passed away. She has no documentary evidence to support her claim. 50.I accept her evidence. I reject the suggestion that the 2nd, 3rd and 4th plaintiffs had put their heads together to concoct a claim against the deceased's estate. 51.I rule that there is sufficient evidence of segregation or appropriation to identify the subject matter of the trust in favour of the 3rd plaintiff. The 3rd plaintiff was able to name the kind of shares purchased on her behalf. All the HSBC shares in the deceased's name were placed in the safe deposit box. I was informed by Mr Miu that the 2nd, 3rd and 4th plaintiffs do not seek an order or declaration to define the proportion of their respective interests in the shares in the safe deposit box and if the court should find in their favour that these shares were held by the deceased on trust for the 2nd plaintiff or for the three of them, these plaintiffs would work out among themselves their proportional entitlement. That being the case, it is unnecessary for me to make a finding now on the quantity of HSBC shares held by the deceased on trust for the 3rd plaintiff. I should record that it is my view that there is evidence for such a finding to be made and I propose to give the 2nd plaintiff, the 3rd plaintiff and the defendant liberty to apply if there should be difficulty in working out her proportional entitlement. The 4th plaintiff 52.The 4th plaintiff claims she had given HK$10,000.00 to the deceased to buy shares on her behalf three or four years after she was converted to Buddhism in about 1978 or 1979. The HK$10,000.00 given to the deceased to invest for her was meant for her funeral and burial expenses. Hence, she had not asked for the return of her money at any time. She had no idea what the deceased had done with the money she gave him or what shares, if any, were purchased with her money. She had been working as a weaver. She had also paid for the use of a room in the oratory. She has no documentary evidence to support her claim. 53.I accept the 4th plaintiff's evidence. However, unlike the situation of the 2nd and 3rd plaintiffs, I do not think there is sufficient evidence here to identify the subject matter of the trust. Accordingly, the 4th plaintiff's claim for a declaration of a trust of the shares in her favour fails. Apart from asserting a claim over the shares in question and a claim for a contractual licence to reside in the oratory during her lifetime, she has not made any other claim against the deceased's estate. In dismissing her claim against the estate in respect of the shares in question, I express the hope that the 2nd and 3rd plaintiffs may consider her position sympathetically and allow the 4th plaintiff to recover some money for an investment she had made to provide for her funeral and burial expenses. The claim for contractual licence 54.This is a claim made on behalf of the 2nd to 7th plaintiffs and the 9th plaintiff that they are entitled to reside in the oratory for the rest of their lives. The claim was contested by the defendant initially but some time before the trial, the defendant has withdrawn his opposition. I am satisfied on the oral evidence of the 2nd, 3rd and 4th plaintiffs, the evidence on affirmation of the 1st plaintiff, and the record produced of the amounts paid by those of the deceased's disciples who were given rooms or bed spaces in the oratory that the plaintiffs have established their case for a contractual licence and there will be a declaration accordingly. Conclusion and orders 55.For the above reasons, I give judgment in favour of the plaintiffs in the terms set out below and I dismiss the defendant's counterclaim. The orders are as follows:
56.Except for the 4th plaintiff's claim in respect of the shares, the plaintiffs have succeeded in all their claims. I make an order nisi that the defendant should pay 90% of the costs of the plaintiffs in this action, to be taxed if not agreed. As all the plaintiffs are legally aided, I order that their costs be taxed in accordance with the Legal Aid Regulations. 57.I should mention that loose ends should be tidied up in respect of the action between the defendant and the 2nd plaintiff in HCA No. 6909 of 1994, which was ordered to be stayed without more on 13 June 1995 and not consolidated with the present proceedings. An appropriate application should be taken out in that action.
Representation: Mr Nelson Miu, instructed by Messrs Hobson & Ma, for the plaintiffs Mr Wong Po Wing, instructed by Messrs Stephen Lo & P Y Tse, for the defendant |
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