Cheung Cham and Another v. Lau Shui Chu

HCA004241/1982

Action No. 4241 of 1982

IN THE HIGH COURT OF JUSTICE

BETWEEN

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Coram: Hon. Mantell J.

Dates of Hearing: 5th - 7th June, 1984.

Date of Delivery of Judgment: 7th June, 1984.

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JUDGMENT

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1. This unhappy piece of litigation comes about in the following circumstances. The plaintiff and the defendant are husband and wife. They have one child, a daughter, now aged 20. In about 1963, the plaintiff left the defendant to live with his mistress who has given him three children. The defendant continued to live with the daughter and the plaintiff's mother in what had been the matrimonial home. The plaintiff's mother died on 3rd May 1981 and the plaintiff is the administrator of her estate. He now sues in that capacity. He claims on behalf of the estate, of which he is, of course, the principal if not the sole beneficiary, a declaration that a Deed of Gift executed by his mother in favour of the defendant and relating to her half share in an apartment in Tai Hing Building, Des Voeux Road West should be declared void and set aside on the ground either that his mother knew nothing of its contents or effect or that it was made under the undue influence of the defendant. He also seeks to have brought into the estate, or alternatively that the defendant should account for, certain monies held in his mother's bank accounts and certain other property of which, he says, his mother was possessed at the date of her death.

2. The premises in Tai Hing Building were purchased jointly by the mother and the defendant on 14th January 1974. Thenceforward, they became the home of mother, daughter-in-law and grand-daughter. Mother and daughter-in-law each provided half of the purchase price. The plaintiff made no contribution. Nor has he paid anything towards the expenses of that household notwithstanding his undoubted obligation towards the defendant, and if not towards her, then certainly towards his daughter. Mother was in business as a wholesaler of Chinese medicine and I find on the evidence before me that from January 1974 at the latest, she was assisted in the business by the defendant. From at the latest January 1974, the household of grandmother, defendant and grand-daughter supported itself from the income produced by that business. The plaintiff was in a similar line on a much smaller scale but, as I have said, none of the profits from that business went either towards the purchase of the premises or to the support of its occupants.

3. Towards the end of 1980, the mother began to show symptoms of a progressive illness affecting her liver. The probable cause was hepatitis. The condition was advanced and, as I find, by January 1981, it was inevitable that she would deteriorate so as, at first, to become incapacitated by her illness and in the end to suffer death. It was only a matter of time. I find that it is probable that by 5th January 1981, she knew that her health was deteriorating. On that date at her suggestion, the plaintiff opened an account with the Hong Kong and Shanghai Bank. She, the deceased, retained the chop by which withdrawals from the account were to be made.

4. On 25th January 1981, mother was first admitted into hospital. Although from time to time there was some remission of symptoms, overall her condition was becoming more and more serious. During a period of remission on 3rd March 1981, she executed the Deed of Gift which the plaintiff seeks to attack. On 4th March, she was re-admitted into hospital. From 25th January 1981 until the date of her death, she surrendered effectual control of her various bank accounts to the defendant. They included not only the accounts in her own name but also the account which had been opened on 5th January 1981 in the name of the plaintiff. The day after the account in the plaintiff's name had been opened, the defendant withdrew from the deceased's account with the Dao Hang Bank a total of $20,000 by two separate cheques which amount was then paid into the plaintiff's account. I find that those withdrawals and payments into the plaintiff's account were made with the full authority of the deceased. Prior to that, the only money in the plaintiff's account had been some $500 with which it had been opened. On 9th February 1981, $20,000 was withdrawn from the plaintiff's account, again by two separate cheques. $10,000 was paid into an account held by the defendant and the balance into one of the deceased's accounts. The defendant has told me that the $10,000 which was transferred effectively from the plaintiff's account to her own was intended by the deceased to be a gift to her. If one includes the transactions to which I have referred, it is common ground that between the date of the deceased first going into hospital and the date shortly after her death, a total of approximately $94,000 was withdrawn from all the various accounts taken together and deposits of some $26,000 were made leaving in total some $68,000 which falls to be accounted for.

5. Apart from the Deed of Gift and the monies in the deceased's bank accounts, the plaintiff asserts that his mother was possessed at the date of her death of approximately one hundred taels of gold and various items of jewellery, household furniture and equipment. The plaintiff claims that the gold and the articles should be brought into the estate.

6. I shall find it convenient to deal with the gold, the article of jewellery, household furniture and equipment first, the monies in the bank accounts second and the claim in relation to the deceased's share in the premises in Tai Hing Road last.

7. The only evidence with regard to the gold comes from the plaintiff and relates to a conversation which, it is alleged, took place between the plaintiff and his mother a day or so before her death. A hearsay notice has been served. In that conversation, the plaintiff claims that his mother told him that she had a hundred taels of gold which, she intended, should come to him in due course. There is no real dispute that if she was possessed of the gold at her death, it certainly ought to be brought into the estate and if it be the case that the defendant was in possession or control of the gold at that date that she ought to suffer judgment as claimed. When the plaintiff swore an affirmation in relation to the taking out of Letters of Administration, he deposed to the fact that the only property which he believed to be in the possession of his mother at the date of her death was that set out in a schedule to the affirmation. That schedule did not include any reference to a hundred taels of gold or any gold. He further affirmed that he did not believe that his mother had been in possession of any other property. I cannot accept that the conversation which he was supposed to have had with his mother just before she died would have escaped his recollection at the time he was making that affirmation. I am afraid that I just do not believe that he was ever told by his mother that she had this very considerable amount of gold in her possession. I am certainly not satisfied on the balance of probabilities that such a conversation ever took place. Even if I had thought that there was such a conversation, I would not have been satisfied on the evidence that the gold ever came into the possession or control of the defendant. The claim in so far as it relates to the gold must fail.

8. Some of the items claimed as being in the deceased's possession at her death are admitted to have been in her possession and further that they should be brought into the estate. In due course, I shall give judgment in those terms. As to the disputed items, there has been no sufficient evidence to satisfy me that they were in the deceased's possession. There was no such material evidence from the plaintiff. The defendant has given evidence that she accounted for all her mother-in-law's possession including jewellery, apart from that, which, from time to time, was given to her by the deceased. She told me that on one occasion she took jewellery from a deed box in which it was kept at the request of her mother-in-law to give to the plaintiff for his children. That assertion was not contradicted, I think, either by evidence or in cross-examination. I am not satisfied that there was any jewellery or that there were any other items which have not been properly accounted for by the defendant in so far as it is for her to make account. Other than as to those items which are admitted, that part of the plaintiff's claim also fails.

9. I turn now to the question of the bank accounts. It is common ground that, being in control of those bank accounts, it is for the defendant to show what happened to the money. She has satisfied me that some $27,000 was properly spent on hospital expenses. That is supported by documents. I also accept that $8,000 was handed to the plaintiff. There is a dispute as to what the $8,000 was to be used for but the fact that it was handed over is not contested. I am also satisfied that a sum of $3,600 was paid to solicitors for work done in connection with the Deed of Gift. That leaves $30,000, if my arithmetic be correct. As already remarked, the defendant says that of that sum $10,000 was a gift to her. She says that the balance of $20,000 was withdrawn after the death of the mother and handed to the plaintiff to defray certain expenses in connection with the funeral. In one respect, the defendant was not a satisfactory witness. She told me that at the time of the making of the Deed of Gift, it was not she but some other patient in the hospital who got in touch with the solicitor. The solicitor told me that it was the defendant herself. That obliges me to view her evidence with a degree of suspicion. I am not satisfied on a balance of probability that the $10,000 was ever given to her. However, with regard to the $20,000, there was some other evidence. It came from the daughter, who on any view, was placed in an invidious position, and an elderly relative. Had the daughter's evidence been the only corroboration of the defendant's account, I should have been reluctant to accept the version put forward. But the other evidence does satisfy me that the money was handed over to the plaintiff and, in the event, the plaintiff succeeds in his claim to have the $10,000 brought into the estate but not otherwise.

10. I turn now to the Deed of Gift. Mr. Mackay relies heavily upon the Privy Council's decision in Inche Noriah v. Shaik Allie Bin Omar.⁽¹⁾ In that case, a very old Malay lady who was quite illiterate executed a Deed of Gift in favour of her nephew in relation to some land in Singapore. She had had the independent advice of a lawyer who acted in good faith. However, what she purported to give away was the whole of her property and she was never advised that she could have benefited her nephew equally well by bestowing the property upon him by Will. It was held that a presumption arose that the donee had influence over the donor and that it was for the donee to rebut that presumption if he were to retain the benefit of the gift. Mr. Mackay submits that a similar presumption arises is the instant case by reason of the special relationship existing between the defendant and her mother-in-law. I accept that the presumption does arise in this case and that it is for the defendant to rebut if the Deed of Gift is not to be set aside. In coming to the conclusion that the presumption does arise, I take into account the fact that the mother-in-law must have been much weakened both physically and mentally by reason of her illness; that she had surrendered control of her bank accounts to the defendant and that there was this relationship not only by marriage but by bond of affection between her and her daughter-in-law. However, she was advised separately by a solicitor who was present at the time of the making of the Deed of Gift together with his clerk. He told me that everything was fully explained to the deceased who appeared to understand precisely what was going on. That evidence is supported to an extent by that of a doctor who saw her the day before the making of the Deed of Gift and who had said that at that time she was in full possession of her faculties. It seems to me that it was the most natural thing in the world for mother-in-law to wish the defendant and her grand-daughter to continue in undisturbed possession of the flat in which they had been living for several years and to which her son could have no possible moral claim. No doubt, she foresaw the kind of difficulty which might arise if she did not take some step to secure her daughter-in-law's occupancy. The fact that in another respect I have not found the defendant's evidence wholly reliable does not assist her, of course, but in the event, I am prepared to find that the presumption of undue influence has been rebutted by the evidence received in this case. In the event, the plaintiff fails in his claim to have the Deed of Gift declared void and for the consequential orders which would have followed upon such declaration.

11. There will, therefore, be judgment for the plaintiff in the sum of $10,000 and an order for delivery up of the chattels which are admitted on the pleadings to be the property of the estate. Since, the plaintiff brings his action as administrator and the burden of showing that the Deed of Gift was not made without undue influence fell upon the defendant, in the exercise of my discretion, the plaintiff will have costs on the High Court scale on the money judgment recovered at the rate of 12 1/2% from the date upon which Letters of Administration were granted, which was 7th May 1982, to the date of judgment herein and from the date of judgment to the date of payment at the prescribed court rate.

(1)    [1929] A.C. 127

Representation:

Graeme A. Mackay (Hampton, Winter & Glynn) for plaintiff.

K.K. Pang (T.S.Tong & Co.) for defendant.