Tung Kun Sheng v. Chow Oi Lin

HCA005856/1993

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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Coram: The Hon. Mr. Justice Yeung in Court

Dates of Hearing: 23rd-27th, 30th-31st October 1995, 2nd-3rd, 6th-8th November 1995

Date of Handing Down of Judgment: 22nd November 1995

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JUDGMENT

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1. The Plaintiff Tung Kun Sheng is a citizen of the Republic of China (Taiwan) residing in Taipei City, Taiwan. He was born in Kiangsu, China in 1921. After the Communist took over China in 1'949, the Plaintiff was purged because of his family background and he escaped to Hong Kong in 1951. He left his daughter of his first marriage (Yung Fong), his second wife and a son of his second marriage (Ka Po) in China. The Plaintiff, having spent a short period of about 2 years in Hong Kong, went to Taiwan in 1953 and settled down there.

2. The Plaintiff worked for a construction company and also invested in some building and engineering projects and was able to make some profit. Since 1971, he started his own business, an insurance agency called Lee Kwan Insurance Agency and his business had been very successful.

3. The Plaintiff's second wife passed away in 1958 and due to the political situation between the People's Republic of China (China) and Taiwan, he was unable to keep in touch with his children until sometime in 1978 when China started to adopt the open policy. He was also able to regain contact with some of his relatives and clansmen in Kiangsu and he started sending them money to assist them.

4. One of the persons that the Plaintiff regained contact was Chau Yuk Man, the father of Chow Oi Lin, (the Defendant). Since 1980, the Plaintiff had been sending some money to Chau Yuk Man to assist him financially.

5. The Defendant's husband, Chan Ham Kit came to Hong Kong in 1980 and the Defendant joined him in 1982 together with their daughter. The Defendant was able to get in touch with the Plaintiff who visited them in 1982 and there were subsequent visits by the Plaintiff of the Defendant and her family. In fact before the Defendant came to Hong Kong, her father had informed the Plaintiff of the Defendant's plan.

6. Prior to 1985, the Plaintiff had been remitting money to his friends and relatives in China through a friend of his, Wong Pak Hong and since or about 1985, the Plaintiff had remitted money from Taiwan to the Defendant in Hong Kong so that she could then send the money onward to China for the relatives and friends of the Plaintiff.

7. The Defendant's father came to Hong Kong to join her family in 1984 and the Plaintiff continued to give him money, a few thousand dollars a time and three or four times in a year. In fact, the Plaintiff came to Hong Kong quite often and he would visit the Defendant's family and they were on extremely good terms, partly because of the generosity of the Plaintiff.

8. On the 10^th of March 1987, the Defendant opened a saving account (No. 003-6-081354) (the trust account) at the Sham Shui Po branch of the Hong Kong Bank and from that day onward, the Plaintiff had remitted large sums of money into the account, a total sum not less than $3 million. From the said account, the Defendant would withdraw money and sent it to the Plaintiff's relatives and friends in China, the job previously undertaken by Mr. Wong Pak Hong. One of such persons was the Defendant's mother in Shanghai and she would be getting initially $1,500 a year and then $2,400 a year. The Defendant would also pay her father, from the trust account, three times a year of $5,000 each time. Money would also be withdrawn from the trust account to be given to the Yung Fong and Ka Po as well as the Plaintiff's sister Choi Ying when they visited Hong Kong and for other purposes on the instruction of the Plaintiff.

9. In March and April of 1988, the Defendant in her name purchased a property at Flat D, 4^th Floor, No. 7 Mount Sterling Mall, Mei-Foo Sun Chuen, Kowloon. (hereinafter called the said property) It is not in dispute that the entire purchase price of the said property came from the remittance into the trust account by the Plaintiff. It is also not disputed that the Plaintiff also paid for the other incidental expenses including lawyer's fees, the stamp duty, the decoration expenses as well as the expenses for the purchase of the furniture and appliances to be used in the said property.

10. The Defendant had since April 1988 been residing in the said property with her family, including her father, husband and daughter.

11. On the 1^st of September 1992, the Plaintiff and the Defendant signed a written document in which it was set out that the Plaintiff entrusted the Defendant to purchase the said property and to manage and use the said property for a period of 5 years until the 30^th of June 1993 (The management agreement) The Plaintiff agreed not to charge the Defendant any rent and the Defendant would be responsible for the payment of the necessary expenses and the upkeep of the said property.

12. The Defendant further agreed that upon the expiration of the 5 years period, she would unconditionally go through the formalities of transferring the said property back to the Plaintiff at his expenses. The said document had been stamped and both the Plaintiff and the Defendant had a copy of the management agreement.

13. Since or about early 1993, the bank passbooks in respect of the said trust account had been in the possession of the Plaintiff. The present action had also been registered in the Land Registry by Memorial No. 5614688.

14. Prior to the commencement of the present action, on or about the 26^th of April 1993, the Plaintiff, through his solicitors demanded the Defendant to surrender possession of the said property on or before 30^th of June 1993 and to transfer the title of the said property to the Plaintiff. The Defendant failed and/or refused to comply with the Plaintiff's request and hence the Plaintiff's claim against the Defendant for a declaration that the Defendant was holding the said property on trust for the Plaintiff and an order ordering the Defendant to transfer the title of the said property to the Plaintiff and for mesne profit at $15,000 per month from 1^st of July 1993 until vacant possession of the said property was delivered to the Plaintiff.

15. In respect of the money paid into the trust account, the Plaintiff prays for an order for an account and enquiry to be taken and to repay all sum to the Plaintiff after the taking of account and enquiry.

16. At the commencement of the case, the Court ordered that it was a proper case for the Defendant to begin and the Court further ordered that the question of taking account and enquiry was to be dealt with at the trial as well as it was clear that such matters could be more conveniently dealt with by the Court then to refer it to the Master due to the nature of the dispute and the surrounding circumstances of the dispute.

17. The Defendant, in her defence suggested that the property in question was intended to be a gift to her father and his family including herself. The Defendant did not dispute that she had signed the management agreement. However she claimed that she signed it on the representation of the Plaintiff that it was only going to be shown to the Plaintiff's sister and for no other purpose.

18. Alternatively, the Defendant suggested that the Plaintiff was only entitled to be repaid the purchase price of the said property even if it was not intended to be a gift to the Defendant's father and his family.

19. In so far as the balance of the money remitted by the Plaintiff, the Defendant alleged that the bulk of it had been remitted at the direction of the Plaintiff to various people in China, including the Plaintiff's sister and daughter and the balances are gifts to the Defendant and/or her father.

20. Alternatively, the Defendant suggested the balance of about $290,000 had been repaid to the Plaintiff. $150,000.00 was repaid on or about the 29^th of December 1992 and as to $140,000.00, the suggestion was that it was paid to the Defendant's husband as the salary payable to the Defendant's husband by the Plaintiff.

21. It was the Defendant's case that for a period of 28 months from mid-October 1990 to mid-February 1993, the Plaintiff required the service of the Defendant's husband in connection with his purchase of a property and his application for permanent residence in Macau. The Defendant's husband had to accompany the Plaintiff to go to Macau, looking after him there and the Plaintiff had promised to pay him a monthly salary of $5,000.

22. It was not in dispute that the Plaintiff had in fact lent a sum of $20,000 to the Defendant's husband. The Defendant suggested that the balance of salary due to her husband of $120,000 was still due and payable and with the consent of the Plaintiff, she just exhausted the said trust account by paying the remaining sum of about $117,000 to her husband as his salary for serving the Plaintiff.

23. The Defendant denied the Plaintiff's claim and counterclaim for the return of the bank passbooks in respect of the trust account as well as for an order that the lis pendens against the said property be discharged.

24. The Defendant gave lengthy and detailed evidence. Her evidence centred on the following main areas:-

25. But Mr. Chau confirmed that after the laundry shop that his son-in-law, Chan Ham Kit was working closed down in September 1990, Mr. Chan in fact started being employed as a part-time worker in other laundry shop, a fact that Mr. Chan had denied.

26. The Plaintiff's evidence was relatively simple and direct. He agreed that he was grateful to the Defendant's father for saving his life from the Japanese during the war. After escaping from China after the Communist took over, he was successful in his business and was making quite a lot of money. He lost contact with his relatives, including his daughter (Yung Fong), son (Ka Po) and elder sister (Choi Ying) for over three decades. He only managed to re-establish contact with them after 1978 through a friend of his, Wong Pak Hong who had been living in Hong Kong for a long time.

27. Through Wong Pak Hong, the Plaintiff had been remitting money to his relatives and friends in China. One of people he regained contact was the Defendant's father who in 1982 notified the Plaintiff that his daughter was coming to Hong Kong. The Plaintiff first met the Defendant and her family when he came to Hong Kong in 1983. The Defendant and her family was then in rather poor financial condition and the Plaintiff gave her a small sum of $500.

28. Several days later, the Plaintiff met the Defendant again in Wong Pak Hong's place. According to the Plaintiff, the Defendant was crying saying that her father was divorcing her mother and her brothers were not going to recognise him anymore. The Plaintiff admitted that he had indicated to the Defendant that he would be responsible for her father's living expenses after he came to Hong Kong. He also confirmed that the Defendant's father had written him a letter asking him to be responsible for his living expenses in Hong Kong.

29. After the Defendant successfully applied for her father to come to Hong Kong, the Plaintiff instructed her to give her father $15,000 a year in three payments of $5,000 each as fulfilment of the promise he made. The Plaintiff also visited him in Hong Kong.

30. In 1985, Yung Fong and Choi Ying visited Hong Kong as tourists and the Plaintiff came to Hong Kong to meet them. He gave the daughter and sister the respective sums of $80,000 to $90,000 and $20,000 to $30,000 Ka Po also visited Hong Kong in the same year.

31. According to the Plaintiff, he discovered in 1985 that Wong Pak Hong was dishonest as he used his money to carry on his China trade business and the Plaintiff asked the Defendant to take over from Wong Pak Hong as his agent to remit money to friends and relatives in China at the suggestion of the Defendant.

32. The Plaintiff said he had no other person in Hong Kong to trust and he trusted the Defendant. Not only did he ask her to handle quite large sums of money to remit to China, he also lent $50,000 to the Defendant's husband to enable him to start some laundry business.

33. In order to make it more convenient for the Defendant to remit the Plaintiff's money to China, the trust account was opened in March 1987. The Plaintiff would remit money into the trust account from Taiwan and he would also give detailed instructions to the Defendant for such money to be remitted to China.

34. The Plaintiff said he had never promised to give a sum of $300,000 to the Defendant's father. The Plaintiff also denied that he had promised to buy a flat for the Defendant's father in May or July of 1987. He said he was in Taiwan in May 1987. He was adamant that although he was grateful to the Defendant's father, he would not have gone to the extent of giving him a flat. He considered the regular payment of the sums of $5,000 was all that he had agreed to do to support the Defendant's father.

35. In September 1987 the Defendant wrote a letter to the Plaintiff informing him of the arrival of Ka Po for permanent stay in Hong Kong. The Plaintiff claimed that he got the impression from such letter that a person could not even rent a flat in Hong Kong without a Hong Kong identity card.

36. The Plaintiff also claimed that he was apprehensive that Ka Po might be under the bad influence of Wong Pak Hong and he did not want Ka Po to be in the company of Wong Pak Hong.

37. It was the Plaintiff's evidence that after the death of President Chiang on 13^th of January 1988, people in Taiwan were worry that Taiwan would be striving for independence and there might be conflict between the native people of Taiwan and those who settled there from China. The Plaintiff said he intended to transfer his assets out of Taiwan and to immigrate to Hong Kong as he had been to Hong Kong before and his son also arrived in Hong Kong in September 1987.

38. The Plaintiff had a discussion with the Defendant and asked her if by buying some property, his prospect of immigrating to Hong Kong would be enhanced. When he made the enquiries, the Defendant did not give him a reply. Two days later, the Defendant telephoned to tell the Plaintiff that without an identity card, one could not buy any property in Hong Kong. The Plaintiff asked if he could buy the property in his son's name, the Defendant suggested that as his relationship with his son was not good and his son might also be cheated by Wong Pak Hong. The Plaintiff then asked the Defendant if she could use her identity card to buy the property for the Plaintiff. The Defendant agreed.

39. At first the Plaintiff was thinking that the property could be rent out as his son could only supported his application to immigrate to Hong Kong 7 years after he settled in Hong Kong. He then instructed the Defendant to start looking for a suitable flat for him and in connection with such matter, there had been many telephone conversation with the Defendant.

40. The Defendant wrote to the Plaintiff, listing out the suitable flats that had been viewed and eventually the said property was chosen. The Plaintiff had written a latter dated 8^th of March 1988 to the Defendant and her husband indicating that the flat was required so that he could have a place in Hong Kong to live with his relatives for a long time. (P. 761 of the bundle of documents.) The Plaintiff said the reference to last year in the letter was a reference to the Lunar Calendar as it was shortly after the Chinese New Year when he wrote the letter. He also told the Defendant not to let Ka Po know about the purchase of the said property for fear that Ka Po would became lazy knowing a property had been purchased by his father.

41. According to the Plaintiff, he agreed to allow the Defendant and her family to live in the flat after it was acquired as the Defendant told him that the lease of the flat that her family was occupying was coming to an end. On the 15^th of March 1988, he remitted US$101,000 to the Defendant to purchase the flat. There is no dispute that the entire purchase price of the flat, the expenses and the cost of decoration and furniture were all paid for by the Plaintiff. In July 1988, the Plaintiff visited Hong Kong and it was agreed with the Defendant that the Defendant would look after the said property for the Plaintiff fro a period of five years until 1993 and the Plaintiff would not charge any rent provide the expenses were to be met by the Defendant. Since 1988, the Plaintiff would be staying in the said property when he visited Hong Kong.

42. The plaintiff also said he did not like Yung Fong and Choi Ying because they demanded money every time he visited Hong Kong since 1985. There was an occasion in 1985 when he paid them over $100,000. But they were still demanding for more. The Plaintiff wrote a letter on 22^nd of October 1988 to the Defendant to be shown to Yung Fong and Choi Ying when they visited Hong Kong. (P. 778-779 of the bundle of documents). The Plaintiff said he wanted to sever the relationship with them. He also asked the Defendant just to give them a small sum of money to send them away and he did not want to meet them.

43. When he arrived in Hong Kong on 1^st of December 1988, he chose to stay at the Ambassador Hotel and not at the said property as Yung Fong and Choi Ying were then living there. The Plaintiff said he had never asked the Defendant to pay them as much as $110,000 at all contrary to what the Defendant had claimed. While he was staying in the Ambassador Hotel, he also wrote a letter on the 5^th of December 1988 to his brother in law in Shanghai. (P.77 of the bundle of documents) In the letter, the Plaintiff clearly indicated that he had brought a flat in Mei Foo and was asking the Defendant to look after it for him.

44. The Plaintiff confirmed that the trust account was opened to facilitate his remitting money to Hong Kong for his relatives and friends in China. He also used the trust account to support Ka Po in Hong Kong. On one occasion, he had asked the Defendant to pay Ka Po $600,000 for him to buy a flat but Ka Po used the money for some other purposes and he was angry and his relationship with Ka Po deteriorated.

45. By 1990, it appeared that his plan to immigrate to Hong Kong began to look difficult and the alternative was Macau. He confirmed the visits to Macau in connection with the purchase of the property and the making of enquiry about immigrating to Macau. He said the Defendant's husband asked to come along as he was then unemployed and going to Macau would cheer him up. In Macau, the Defendant's husband asked the Plaintiff that a flat should be purchased in his name and the profit would then be shared. The Plaintiff said he was angry at such suggestion and he therefore sent the Defendant's husband away while he stayed on in Macau.

46. When he returned to Macau again to pay for the purchase price of the flat, it was the Defendant's father who suggested that the Defendant's husband should go as well because he could speak good Cantonese. The Plaintiff said the documents in connection with the flat he purchased in Macau were kept in the flat and the Defendant's husband had been given keys in order to facilitate the decoration of the flat. The Plaintiff said he had never promised the Defendant to pay her husband a monthly sum of $5,000 as salary for him to serve the Plaintiff.

47. As far as the document signed by the Plaintiff and Defendant on 1^st of September 1992 (P.111 of the bundle of documents) in which the Defendant acknowledged that she was only looking after the said property for the Plaintiff was concern, the Plaintiff said he had always wanted to have the Defendant preparing such a document to put their arrangement in writing. He said the Defendant always tried to delay the matter. When he found out that the Defendant was not telling the truth in her suggestion that an identity card was required to buy a flat in Hong Kong, he became suspicious and he therefore prepared the document and asked the Defendant to sign it on 1^st of September 1992 in the presence of his secretary Tsui Sau Wah when they were having tea in a restaurant. The Plaintiff denied that it was a bogus document prepared just to show his sister.

48. The Plaintiff confirmed the loan of $20,000 to the Defendant's husband. He also said when he came to Hong Kong in December 1992, he noticed an irregular entry in the bank passbook of the trust account and he was not satisfied with the Defendant's explanation. He asked the Defendant to withdraw $150,000 from the trust account to put it into his own personal account. He also asked the Defendant to give him both passbooks so that he could check the entries. He said the old passbook was in fact taken out from a safe-deposit box of a bank by the Defendant.

49. As he had the bank passbooks with him in Taiwan, when he remitted money on 13^th of January 1993 to pay some tax in connection with the flat in Macau, he had to remit the money into another account of the Defendant and not the trust account. The Plaintiff said that was the only time he remitted money into the Defendant's personal account after the trust account was opened in 1987.

50. In April 1993, the Plaintiff asked the Defendant to formally transfer back the title to the said property to him and she refused. He then wrote a long letter to the Defendant's father pointing out that the Defendant had been greedy and dishonest. (P.791-794 of the bundle of documents) He never received any reply from the Defendant, her husband or her father. Hence the present action was instituted. He also found out that the trust account had been closed.

51. The Plaintiff called his secretary Ms. Tsui Sau Wah (Hsu Hsiu Hua) to give evidence on his behalf. Ms. Tsui was a secretary working in the Plaintiff's company in Taiwan and she had been so employed since 1981. She appeared to have a very closed relationship with the Plaintiff as she would accompany the Plaintiff on his trips to Hong Kong. Ms. Tsui was asked questions about the matters pertaining to the purchase of the said property. She said there was never an occasion in July 1987 when the Plaintiff made the promise of buying a flat for the Defendant's father in the presence of Ms. Au Yeung.

52. Ms. Tsui said she was present in the same office with the Plaintiff in early 1988 when the Plaintiff and the Defendant were having telephone conversation with one another about the purchase of the said property. She confirmed that the Plaintiff was buying a property with a view to support his application to immigrate to Hong Kong. She said there were occasions when she would be talking to the Defendant when the Plaintiff was not in the office.

53. In particular, she said the Defendant once told her that only people with Hong Kong identity cards could purchase property in Hong Kong. She also heard the Plaintiff giving instruction to the Defendant in connection with the purchase of the said property and that the Defendant would be allowed to live in it in order to manage it. During their visits to Hong Kong in July 1988, she also heard the Plaintiff asking the Defendant to prepare a document to the effect that she was managing the said property for the Plaintiff but the Defendant always put it off saying she was busy and that she would do it the next time.

54. Reference was made to what appeared to be a marriage certificate between Ms. Tsui and the Plaintiff. The suggestion was that they were in fact not married. The certificate was only prepared on the suggestion of the Defendant's husband in order to facilitate Ms. Tsui' application to immigrate to Macau. She also confirmed that the management agreement signed on the 1st of September 1992 between the Plaintiff and the Defendant was in fact signed in her presence. She also said she did not hear the Plaintiff instructing the Defendant to give his sister and daughter the sum of $110,000 when the Defendant was visiting them at the Ambassador Hotel in early December 1988.

55. It was against the aforesaid background that I have to consider if the said property had been entrusted by the Plaintiff to the Defendant for management or whether it was a gift to the Defendant's father and her family. I also have to consider if the Defendant had misused any of the money deposited in the trust account and if so to what extent the Defendant had to account to the Plaintiff in respect of such money.

56. Counsel for the Plaintiff and the Defendant each argued that their respective clients' evidence was more convincing than that of the other. Both counsel gave a deep and careful analysis of the evidence adduced by both parties and I am grateful to them for such analysis.

57. I have considered the evidence as well as Counsel's submission carefully. The Defendant clearly was a very intelligent, shrewd and capable woman. Despite the fact that much of her evidence in Court was not in her witness statement and the very lengthy cross-examination, she was able to answer the questions put to her quite well.

58. But I am not convinced that she was telling the Court the whole truth. Her account of her agreement with the Plaintiff that her husband would get $5,000 a month for accompanying the Plaintiff to go to Macau in connection with his purchase of property and his application for permanent residence and her account of how she found the bank passbooks of the trust account missing was most unconvincing.

59. The alleged promise to pay the salary of $5,000 was said to have been made on or about 17^th of October 1990. At that time, the Plaintiff was just indicating his intention of buying some property in Macau. It was not then known the procedure required. Even if the suggestion of his applying for right of abode in Macau had been mentioned, they could not have known how often they had to go to Macau. The Plaintiff could not have asked the Defendant's husband to give up a job in Hong Kong to work for him in Macau in connection with his purchase of some property or his application for right of abode in Macau.

60. At the material time, the Plaintiff clearly was on good term with the Defendant and her family. He was still contributing regular sums of money for the Defendant, her father and her mother. Her family was residing at the flat acquired with the Plaintiff's money. It was inconceivable that the Defendant would be promised that her husband would be paid the monthly sum of $5,000 for what initially was just accompanying the Plaintiff to go to Macau to make enquiry about the purchase of property and the application for right of abode.

61. There had never been any mention of the $5,000 in the correspondence between the Plaintiff and the Defendant's family. They had not been any subsequent mention of it in their conversations. In any event, if the Plaintiff had indeed promised the Defendant that he would pay $5,000 to her husband, there was no reason why she did not withdraw such sum from the trust account at all. After all the Plaintiff had made the promise and the Defendant could have withdrawn the money from the account if she wanted. Yet she did not even attempt to do it when according to her, her family was in grave financial difficulty at the material time. After all the Defendant was quite used to withdrawing money from the trust account, including payment to herself. There was no reason for her to be shy or embarrassed to withdraw money as payment for her husband's salary as she suggested if she had been promised that her husband would be paid $5,000 a month.

62. Mr. Chan Ham Kit's account of his failing to take up any job since October 1990 clearly contradicted that of Mr. Chau Yuk Man. Mr. Chau's account of the circumstances in which the promise made by the Plaintiff could not be reconciled with those of the Defendant and Mr. Chan. In any event, his evidence that he wanted to make himself available to the Plaintiff at any time and therefore he did not take up the part-time job when the family was in great financial difficulty simply could not be true.

63. The Defendant and her family might feel after their relationship with the Plaintiff turned sour in early 1993 that the Plaintiff should pay Mr. Chan some money for his time accompanying the Plaintiff in Macau. The purported loan in December 1992 might well be a hint to the Plaintiff that he should pay Mr. Chan some money for his effort. But I am not convinced at all that there was ever such an agreement with the Plaintiff that the Plaintiff would pay Mr. Chan a monthly sum of $5,000 for accompanying or serving him in Macau at all.

64. The evidence of the Defendant and her witnesses on such matter was a clear attempt to justify the Defendant emptying the balance in the trust account after her relationship with the Plaintiff deteriorated in early 1993.

65. The same could be said about the promise to pay the Defendant's father $300,000 from the trust account for his emergency use. It was clear that the Plaintiff had been generous to the Defendant and her family. There had been regular payments to her and her parents. As demonstrated from the correspondence between the Plaintiff and the Defendant, she was quick to acknowledge the Plaintiff's generosity by thanking him every time payment was made to her or to her parents.

66. The Defendant's father was an old man, almost 90 years of age. The contribution by the Plaintiff to him would be adequate for him to lead a reasonable living. There was no compelling reasons for the Plaintiff to be so generous as to agree beforehand to pay him $300,000 at all. If the need for such expenses arose, the Plaintiff would be in a position to evaluate the situation and decide what steps to take. After all he lived in Taiwan and he would be coming to Hong Kong on a regular basis and he was in constant touch with the Defendant's family.

67. The conduct of the Defendant was also highly inconsistent with the suggestion that the Plaintiff had promised that a sum of $300,000 in the trust account was intended to be set aside as gift to her father. She was clearly not a person who would be shy or embarrassed to take money from the trust account on the instruction of the Plaintiff and then thank the Plaintiff for it. Yet there had never been any attempt on her part throughout the five years period to withdraw any money from the trust account in pursuance to the alleged promise of the Plaintiff. Indeed the deposit and withdrawal record of the trust account clearly suggested that the alleged promise of $300,000 as a gift could not be true. There was never any acknowledgement of the promise to pay the Defendant's father the said sum of $300,000 in any of the correspondence between the Plaintiff and the Defendant and the Defendant had never thanked the Plaintiff in that regard which was completely out of the Defendant's usual character. Indeed, the reference to the gift of the $300,000 was never mentioned anywhere in the pleadings.

68. I am driven to the conclusion that the allegation that the Plaintiff had promised to pay her father a further sum of $300,000 was again an attempt to justify the way in which she handled the trust account or simply to undermine the credibility of the Plaintiff.

69. The fallacy of the Defendant's evidence pertaining to the missing of the passbooks of the trust account was even more glaring. There were two bank passbooks in question, one being an outdated one. The Defendant claimed that the Plaintiff took them without her knowledge or consent and she did not discover their missing until towards the end of April 1993.

70. The Defendant claimed to be in extreme financial difficulty at around December 1992, so much so that she together with her husband had to pretend to ask the Plaintiff for a loan in order to remind him of their difficulty. She even had to withdraw $5,000 from the trust account without the permission or prior knowledge of the Plaintiff in order to pay school fee of her daughter. Yet for a period of four months from December 1992 to April 1993, she said she had no need to use the trust account at all even she claimed the money belonged to her and that was why she did not discover the missing of the passbooks until late April 1993. She claimed the balance of the loan from the Plaintiff was adequate to support the family during the period in question.

71. I cannot ignore the fact that a few days after the Plaintiff's solicitors issued the letter before action, the Defendant chose to close the trust account and transfer the entire balance in the trust account to another personal account of hers. She claimed that she only reported the loss of the passbooks to the bank and it was the suggestion of the staff in the bank that the trust account should be closed. Such suggestion was difficulty to accept. If she was genuine in her belief that the passbooks were missing, she needed only apply for a replacement passbook and there was no need to cancel the account at all. No bank would cancel an account without the express instruction of the holder.

72. I am firmly of the view that the Defendant was fully aware that the Plaintiff was in possession of the passbooks of the trust account as she gave them to the Plaintiff to enable him to check the accuracy of the entries in late December 1992. When their relationship took a severe set back, particularly after the letter before action issued by the Plaintiff's solicitor in late April, 1993, the Defendant took the step to cancel the trust account and appropriate the balance in the trust account to try to have a clean break in her dealings with the Plaintiff when she realised that the generosity extended to her and her family by the Plaintiff was coming to an end.

73. It was not disputed that on the 13^th of January 1993, the Plaintiff remitted a sum of money into the personal account of the Defendant for her husband to pay the property tax of the Macau flat. The only reason for the Plaintiff not remitting the sum into the trust account was because the passbooks of the trust account were with him in Taiwan and the Defendant could not withdraw money from the trust account.

74. Despite her intelligence and shrewdness, the Defendant was clearly not a truthful witness. She was prepared to twist the bent the facts in order to achieve her purposes, in particular her desire to keep the said property to her. I do not find her a credible witness at all.

75. Her witnesses evidence was not that of impartial witnesses. Apart from her own husband and father over whom she clearly had some dominating influence, her other witness, Ms. Au Yeung Yin Fun was the Defendant's family friend since 1960. Indeed Ms. Au Yeung was observed to be present in count during the majority part of the trial. Their evidence must be viewed in that regard.

76. I cannot help but ask myself the very fundamental question. Was there any reason for the Plaintiff to give a flat to the Defendant's father, a flat that cost almost $1 million? Was there any reason that having paid for the purchase price of the flat, he also paid for all the incidental expenses, including lawyer's fee, the decoration expenses and even expenses for the purchase of furniture and appliances?

77. It was true that the Defendant's father had saved the Plaintiff's life during the war against the Japanese and that the Plaintiff was grateful. Indeed even at the time of the trial when the Plaintiff was giving evidence, he still harboured no grudge against the Defendant's father and was grateful and respectful towards him. But the Plaintiff had been out of touch with the Defendant's father for almost 35 years and he only saw him again in 1984. Since he regained contact with the Defendant's father, he had been regularly paying sums of money to support him as he had agreed to do.

78. The Plaintiff gave him $5,000 there times in a years and he also paid extra money to him during his visits to Hong Kong. Those payments were clearly indication of his gratitude and respect for the Defendant's father and from the point of view of the Plaintiff, such payments were adequate demonstration of the gratitude and respect. Such payments of regular sum were inconsistent with the suggestion that the Plaintiff would then spend almost one million dollars on the purchase and decoration of the flat to give it to the Defendant's father as a gift.

79. At the material time, the Defendant and her family were having reasonable accommodation. If the Plaintiff had been as generous as the Defendant would suggest, he probably would have contributed more significant sums to the Defendant's father than the three payments of $5,000 each in a year and the further sums when he visited Hong Kong. If the Plaintiff was anxious that the Defendant's father would have a reasonable living condition, all he needed to do was to assist them in their payment of the rents. After all, the Defendant's father was a 90 year old man. There was no need to buy him a flat at all.

80. If the Plaintiff had been so generous as to have given the said property to the Defendant's father, was there any reason for him to then change his mind and adopt the attitude as he demonstrated in the present proceeding?

81. The Defence suggested that he changed his mind because of pressure from his sister or perhaps from Ms, Tsui Sau Wah. I have given such suggestion careful and conscientious thought.

82. The Plaintiff had been out of touch with his sister for 35 years and the only time he saw her was in 1985 when his sister and daughter visited Hong Kong. The Plaintiff had not been to China to visit them. He was treating his sister just like his other relatives and clansman and he was remitting sums of money to her regularly. Indeed when they visited Hong Kong in 1988, the Plaintiff would refuse to meet them as demonstrated by the letter he sent to the Defendant (P. 778 and 779 of the bundle of documents). It was quite improbable that the sister could exercise any influence, let alone pressure on the Plaintiff at all.

83. Ms. Tsui might well have a relationship with the Plaintiff closer than that of a secretary. But she was only half his age. In any event, it was not disputed that in the Plaintiff's dealing with the Defendant and her family, Ms. Tsui was always present. Indeed, the Defendant suggested that the promise to give the flat to her father was made in the presence of Ms. Tsui. If Ms. Tsui intended to and /or was able to exercise any influence or pressure on the Plaintiff over the said property, such influence or pressure would have manifested itself much earlier.

84. The Plaintiff was clearly a man of strong character and view. Any suggestion that he changed his mind due to influence or pressure from another or others was in my view untenable.

85. I have not the slightest hesitation in rejecting the suggestion that the said property was purchased as a gift for the Defendant's father or for herself. I accept the Plaintiff's evidence that he purchased the said property in order to facilitate his application to immigrate to Hong Kong and it was because the Defendant who told him that only people with Hong Kong identity cards could purchase property that he used the name of the Defendant to acquire the said property.

86. I also accepted the Plaintiff's evidence that they had an agreement whereby the Defendant and her family would be allowed to stay in the flat until 1993 and in the meantime, the Defendant would look after the said property for the Plaintiff who would charge no rent.

87. Some of the correspondence between the parties might not be conclusive. There are however some documents which clearly supported the Plaintiff's case. Apart from the document dated the 1^st of September 1992 which was a clear declaration of trust by the Defendant, the other contemporaneous documents also supported the Plaintiff's case. In the letter that the Plaintiff sent to the Defendant on 8^th of March 1988, shortly before the said property was purchased, the Plaintiff had expressed the desire to use the property for his retirement so that he could live in Hong Kong for a long time with his relatives. (P.761 of the bundle of documents.) The terms of the document dated 1^st of September 1992 are valid and enforceable and must be upheld.

88. In the letter dated the 5^th of December 1988 written on the letter paper of the Ambassador Hotel to the Plaintiff's brother-in-law in Shanghai, (P.78 of the bundle of documents) the Plaintiff clearly stated that he had bought a property at Mei Foo in Hong Kong and had asked the Defendant to take care of it for him.

89. Mr. Chan, on behalf of the Defendant suggested that the letter to the Plaintiff's brother was written by someone else in order to stir up matters for reasons not apparent. It was suggested that the handwriting of that letter was different from the Plaintiff's handwriting in other documents. I found the suggestion far-fetched. There was no evidence that the hand writing in question was not that of the Plaintiff. The Defence had knowledge of the existence of the document for a long time. It was simply not open for Counsel to suggest at his final submission without any evidence that the document was a forged document as Mr. Chan seek to do.

90. Looking at the content of the letter, the date in which the letter was written and the circumstances pertaining thereto, it must have been written by the Plaintiff and it was clearly inconsistent with the suggestion that the Plaintiff was buying the said property as a gift to the Defendant's father as alleged by the Defendant.

91. On the evidence before the Court, I have not the slightest hesitation in rejecting the Defendant's contention that the property in question was intended to be a gift to the Defendant's father at all. I accept that the said property was registered in the Defendant's name in trust for the Plaintiff and that the Defendant was allowed to reside in the said property until the 30^th of June 1993. The Defendant was thereafter obliged to vacant the said property in favour of the Plaintiff and to reassign it to the Plaintiff.

92. Further in the pleadings, the Defendant claimed that the said property was intended to be a gift to her father and his family including the Defendant and the gift was perfected by allowing the Defendant to be registered as the owner of the said property. Such assertion was unsupported by her evidence at all. In her evidence, she only the said property was meant to be a gift to her father only. There was no suggestion from her that she was to be one of the beneficiary under the alleged gift at all.

93. Even if the Plaintiff had promised to give a flat to the Defendant's father as she alleged, the Plaintiff had not completely constituted a valid trust in favour of the Defendant' father. The Plaintiff paid for the flat and the flat was never registered in the name of the Defendant's father. It was only registered in the Defendant's name.

94. It was not disputed that the Plaintiff paid for the entire purchase price of the said property and it was registered in the name of the Defendant and prima facie, a resulting trust in favour of the Plaintiff arose. The Plaintiff could of course assign his equitable interest in the said property to the Defendant's father or to direct that the Defendant to hold that interest for the benefit of her father. On the Defendant's own case, the Plaintiff had done neither. It was also not suggested that the Plaintiff had declare himself to be a trustee of the interest in the said property for the Defendant's father.

95. Mr. Chong on behalf of the Plaintiff was right in relying on the judgment of Turner L.J. in Milroy v. Lord(1862) 4 De GF & J 264 at 275;

"Under the circumstances of this case it would be difficult not to feel a strong disposition to give effect to this settlement to the fullest extent, and certainly [have spared no pains to find the means of doing so, consistently with what Iapprehened to be the law of the Court; but, after full and anxious consideration, I find myself unable to do so. I take the law of this Court to be well settled, that, in order to render a voluntary settlement valid and effectual, the settler must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him. He may of course do this by actually transferring the property to the persons for whom he intends to provide, and the provision will then be effectual, and it will be equally effectual if he transfers the property to a trustee for the purposes of the settlement, or declares that he himself holds it in trust for those purposes; and if the property be personal, the trust may, as I apprehend, be declared either in writing or by parol; but, in order to render the settlement binding, one or other of these modes must, as I understand the law of this Court, be resorted to, for there is no equity in this Court to perfect an imperfect gift. The cases I think go further to this extent, that if the settlement is intended to be effectuated by one of the modes to which I have referred, the Court will not give effect to it by applying another of those modes. If it is intended to take effect by transfer, the Court will not hold the intended transfer to operate as a declaration of trust, for then every imperfect instrument would be made effectual by being converted into a perfect trust. These are the principles by which, as I conceive, this case must be tried."

96. Even if the Plaintiff had indicated that he wished to buy a flat to give to the Defendant's father, the Plaintiff had not done what was required to effectively pass the legal or equitable interest of the said property to the Defendant's father who in any event was not a party to the action.

97. Mr. Chan, on behalf of the Defendant agreed that in the Defendant's statement, she had clearly stated that the gift was to her father, but held by her. But she never said so in her evidence in Court. There was no suggestion that she was holding the said property on trust for her father at the direction of the Plaintiff.

98. The Defendant did not have any valid claim to the said property against the Plaintiff and her case failed both on law and on facts. The Plaintiff's claim over the said property against the Defendant must succeed.

99. Mr. Chan in the course of his submission, quite rightly conceded that the Defendant could not argue that the Plaintiff was only entitled to be repaid the purchase price of the said property if the Court found against the Defendant on the question of gift.

100. The Plaintiff must be entitled to the declaration in prayers (1) (a) and (b) of the Statement of Claim as well as for the delivery of vacant possession of the said property. As for the claim for the mesne profit of $15,000 per month from the 1^st of July 1993, there was no evidence adduced by the Plaintiff to show the open market rent of the said property at all. The Court can therefore only award a nominal sum. Bearing in mind the background of the matter, I am of the view a nominal figure of $5,000 a month would be suitable.

101. I shall now deal with the question of account and inquiry in respect of the trust account. Mr. Chong on behalf of the Plaintiff complained in the course of his final submission that because of a interlocutory order by The Hon. Liu J. to the effect that the duty to account on the part of the Defendant did not arise until it had been so adjudicated and therefore the court should only order an inquiry into the account and not adjudicating on the issue. He suggested that the Plaintiff had not been given adequate opportunity to properly prepare his case in order to test the accuracy and completeness of the Defendant's account.

102. The Court at the outset had clearly indicated that it was a proper case for the Court to deal with the question of account and inquiry as well. There had been no indication then that the Plaintiff did not have adequate preparation. If there had been such indication and if an application for further time was made, the Court might well have entertained such application. The Plaintiff could not be allowed to make the complain at Counsel's final submission.

103. The Defendant said of the amount remitted into the trust account, she had withdrawn various sum at different stages for the following purposes:

104. Many of the relevant documents had been produced. There were however quite a few items not supported by invoices or documents. Mr. Chong argued that if the Defendant was not able to produce documents to support any item of expense, the Court should presume that the amount was not spent for the Plaintiff.

105. I found such suggestion difficult to accept. We are not dealing with a business transaction. We are dealing with what can be described loosely as a family arrangement. Apart from the available documents, it was not disputed that the Defendant had regularly accounted to the Plaintiff the status of the trust account by letters or over telephone conversations. It was also not disputed that some of the documents in connection with the remittance to China on behalf of the Plaintiff's friends were in fact given back to the Plaintiff.

106. In court, the Defendant had given a detailed account of the withdrawals from the trust account. There were 3- 4 withdrawals that she was unable to remember precisely. But that was understandable and to be expected in the light of the background and circumstances of the case and I am not prepared to hold it against the Defendant at all. The Plaintiff on the other hand, did not challenge the Defendant's evidence on such matters at all with the exception of the $110,000 withdrawn on 2 December 1988. The Defendant claimed it was a sum withdrawn to give to Yung Fong and Choi Ying during their visits to Hong Kong in 1988. The Plaintiff denied, saying he only instructed the Defendant to pay them some money, meaning a small sum of money.

107. I note from the history of the trust account that the Defendant had been very careful and meticulous with it. Sometimes, she would be putting back into the trust account small sums of money from the balance of the withdrawal after the instructions of the Plaintiff had been carried out. I do not believe that the Defendant would appropriate the sum of $110,000 without the knowledge and/ or authority and/or permission of the Plaintiff. The dispute could well have been the result of some mistake or misunderstanding. I am satisfied on a balance of probability that the sum of $110,000 was also spent for the Plaintiff's purpose and the Defendant had properly accounted for it.

108. It was not in dispute that in April 1993, there was still a balance of $118,135.33 in the trust account. The Defendant transferred such sum into her own account after cancelling the trust account on 30 April 1993.

109. The Court had found against her on her assertion that the sum was to be treated as payment of salary to her husband and the Defendant must therefore account to the Plaintiff in respect of the said sum of $118,135.33.

110. To give effect to the decision reached by the Court, I make the following orders:

111. The Court further make an order nisi that the Defendant is to pay the Plaintiff the costs of the proceeding to be taxed if not agreed. The order nisi on costs is to be made absolute 14 days after the handing down of this judgment.

Representation:

Mr. K.M. Chong instructed by M/S Sousae & Hoosen for the Plaintiff.

Mr. Maurice J. Chan instructed by M/S Norman M.K. Yeung & Co., for the Defendant.