Hsbc Private Trustee (Hong Kong) Ltd v. Ho Yuen Ping Dorothy

HCA2717/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2717 OF 2008

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BETWEEN

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Before Deputy High Court Judge Coleman SC in Court

Dates of Hearing: 13-17 December 2010, 17 January 2011

Dates of last written submissions: 18 & 25 February 2011

Date of Judgment: 20 June 2011

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JUDGMENT

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Introduction

1.The plaintiff is a company incorporated in Hong Kong providing services as a professional trustee and executor. By a will dated 5 February 1999 ("the 1999 Will"), the plaintiff was appointed executor of the estate ("the Estate") of Madam Chan Ho Lai Kuen ("the Deceased").

2.The Deceased was born on 29 June 1916, and died on 3 June 2005, at the age of 88.

3.The defendant is the niece of the Deceased. She was born on 22 October 1949, and so was in her mid-50s at the material times for the purposes of these proceedings.

4.In this action, the plaintiff claims from the defendant various sums as belonging to the Estate. The total sum claimed is $58,870,946.75, comprising various sub-totals depending on their source (the detail of which can be set out below).

5.The thrust of the claim is that the defendant, a non-immediate relative (a niece, at the material time in her 50s, unemployed, unmarried and childless) ingratiated herself with the Deceased, a wealthy aunt in her final years whose only child lived in England, and used her position to persuade the Deceased to make ‘gifts’ or financial arrangements so that she could obtain assets which would not otherwise have been given to her under the Deceased's existing will or any applicable intestacy rules.

6.Under the provisions of the 1999 Will, the defendant would have received a pecuniary legacy of $200,000. But, in the years 2001 to 2005, the defendant received from the Deceased's assets sums totalling over $58 million.

7.The basis of the claim is the alleged undue influence of the defendant over the Deceased.

8.The essence of the defence to the claim is that, although the defendant is the natural niece of the Deceased, the deceased had brought up the defendant in loco parentis since she was 12 years old, and the defendant had all along been treated as the Deceased's own daughter. This is said to give rise to a presumption of advancement. Together with the fact that since January 2000, the defendant had been the sole person taking responsibility for care of the Deceased until she passed away in June 2005, there is a clear explanation as to why the Deceased should provide significant benefits to the defendant. The allegations of undue influence are denied, and it is said that by reason of the existence of a joint account in the names of the Deceased and the defendant, significant parts of the sums now claimed were in any event beneficially owned by the defendant.

9.The plaintiff was represented at trial by Mr. Jenkin Suen of Counsel.  The defendant was represented at trial by Mr. Chan Chi Hung SC and Mr. Julian Chan of Counsel.

Summary

10.I must necessarily deal in some detail with the various issues which arise for determination, but because of the length of this judgment, it may be helpful if I first set out a summary of my findings and decision. 

11.It was not significantly in dispute that the Deceased had placed trust and confidence in the defendant at least in assisting in the management of her financial affairs over the final years of her life.

12.A large proportion of the impugned transactions are not explicable in the ordinary way, and the explanations offered by the defendant are not only not convincing, they are palpably false.

13.The shifting sands of the defendant's case, and her version of events, have necessarily come about as a result of both (a) her reaction to the sheer improbabilities and impossibilities of earlier versions being pointed out, and (b) her apparent desire to extend the reach of her defence over greater and greater sums of money.

14.The defendant was not a truthful witness. Her evidence was contrived, confused, internally inconsistent and unconvincing. Her evidence, and the case which rested upon it, was also significantly at odds with the available contemporaneous documentation. That other contemporaneous documentation which ought to have been available was unavailable for consideration was the result of deliberate concealment of that material by the defendant, who has from the very commencement of relevant enquiries by the plaintiff been at best evasive and misleading, and more frequently simply untruthful.

15.The main factual foundations for the defendant's case (the expansion of which also resulted in the adjournment of earlier fixed trial dates) were demonstrated to be incorrect or untrue. With that, the whole edifice of the defence collapsed.

16.Stepping back, and looking at the evidence in total, that evidence fully justifies the inference that, on a balance of probabilities, though there were clearly some genuine transactions, most of those the subject of the claim were procured by undue influence. The picture revealed by the evidence is of the defendant's becoming increasingly voracious in her appetite for garnering a significant majority of the Deceased's wealth.

17.Accordingly, the plaintiff must succeed on its claim to the extent of repayment from the defendant at $40,503,701.63.  It is also entitled to certain declarations, accounts and enquiries, including that the cash sum (something over $13 million) in an account at the date of the death of the deceased belongs to the estate.

The law: undue influence

18.Before turning to the detail of the facts of this case as revealed by the evidence, it is probably helpful to identify the legal principles against which those facts fall to be considered. 

19.The leading cases on the law relating to undue influence are the House of Lords' decision in Royal Bank of Scotland v. Etridge (No. 2) [2002] 2 AC 773, and the Court of Final Appeal's decision in Li Sau Ying v. Bank of China (Hong Kong) Ltd (2004) 7 HKCFAR 579.

20.Both cases make reference to a categorisation of cases, as originally identified by Slade LJ in Bank of Credit and Commerce International SA v. Aboody [1990] 1 QB 923, at 953.  In that case, the distinction was drawn between ‘actual undue influence’ and ‘presumed undue influence’.

21.As regards the latter category, cases where there was a legal relationship between the parties which the law presumed to be one of trust and confidence were classified as "presumed undue influence: class 2A". Then was made the logical extrapolation that there should be a class 2B to cover those cases where it was proved by evidence that one party had in fact reposed trust and confidence in the other, and it was said that the same consequences flow from this factual relationship as from the legal class 2A relationship.

22.In Barclays Bank plc v. O'Brien [1994] 1 AC, 180 at 189-190, Lord Browne-Wilkinson said:

"In a Class 2B case therefore, in the absence of evidence disproving undue influence, the complainant will succeed in setting aside the impugned transaction merely by proof that the complainant reposed trust and confidence in the wrongdoer without having to prove that the wrongdoer exerted actual undue influence or otherwise abused such trust and confidence in relation to the particular transaction impugned."

23.The Etridge case pointed out the difficulties which arise from the literal application of that statement. Though Lord Browne Wilkinson's approach in O'Brien was broadly endorsed and built upon in the Etridge case, the use of the expression "presumed undue influence" and, in particular, its use in connection with Class 2B cases was deprecated. Indeed, considerable doubt was cast on the utility of the classification, as it was pointed out that the presumption in Class 2B cases was doing no more than recognising that evidence of the relationship between the dominant and subservient parties, coupled with whatever other evidence is for the time being available, may be sufficient to justify a finding of undue influence on the balance of probabilities.

24.In the Li Sau Ying case, Lord Scott of Foscote NPJ expressed:

"the hope that in future cases, where undue influence has to be proved but where the relationship between the parties is not a relationship that falls within Slade LJ's Class 2A category, the parties will concentrate on whether the evidence justifies the inference that, on a balance of probabilities, the impugned transaction was procured by undue influence, that is to say, by an abuse of the allegedly dominant party of the trust and confidence reposed in him by the allegedly subservient party. References in such cases to, and attempts to invoke the assistance of, an alleged evidential presumption of undue influence are, in my opinion, likely to be, as they have been in this case, a source of confusion and an impediment to the evaluation of the available evidence."

25.Mr. Suen pointed out to me that the principles on presumed undue influence have been closely examined in Enonchong on ‘Duress, Undue Influence and Unconscionable Dealing’ (2006). He said that from that examination, and from some of the cases referred to in it, some material principles for this case might be set out.

26.The court will often be looking to see if there was a pre-existing relationship between the parties in which the alleged wrongdoer acquired influence or ascendancy over the complainant. Often it will be relevant to see whether one party reposed trust and confidence in the other in the management of the confider's financial affairs.

27.If it is shown that the donor placed trust and confidence in the donee in relation to the management of his affairs and the transaction in question is one that calls for an explanation, that will normally be sufficient, failing satisfactory evidence to the contrary, to discharge the burden of proof of undue influence: see, for example, Etridge at 796E-F. 

28.The complainant does not have to prove the relationship of influence as a primary fact. It is sufficient to prove facts from which the existence of a relationship of influence can be inferred.

29.The court will examine the nature of the impugned transaction in the light of the circumstances of the parties at the time it was concluded. The claimant must prove that the transaction is not readily explicable by the relationship of the parties. The test is an objective one. Thus, even if a motive is identified for the transaction, the Court may decide that the benefit conferred is out of proportion to the motive: see, for example, Hammond v. Osborn [2002] EWCA Civ 885.

30.Once the presumption is raised, the donee must prove the donor entered into the transaction only after full, free and informed thought about it. A finding that a donor knew that he was making a gift and intended to make the gift is not by itself sufficient to rebut the presumption that the gift was procured by undue influence.

31.It may be relevant as to whether or not the complainant received any advice before entering into the transaction. Whilst it is not in every case necessary to show that the donor received independent advice, if no advice at all was received, it may ordinarily be difficult to rebut the presumption of undue influence. Indeed, an obvious way to prove that the gift is the result of the free exercise of independent will is by establishing that the gift was made after the nature and effect of the transaction had been fully explained to the donor by some independent and qualified person so completely as to satisfy the court that the donor was acting independently of any influence from the donee and with the full appreciation of what he was doing: see, for example, Inche Noria v. Shaik Allie Bin Omar [1929] AC 129, at 135.

32.Nevertheless, I agree that it is probably unhelpful to consider matters by reference to any evidential presumption which is or is not able to be rebutted.

33.Ultimately, it seems to me that I should essentially follow the advice of Lord Scott, and simply ask myself whether the evidence as a whole justifies the inference that, on a balance of probabilities, the impugned transactions were procured by undue influence, namely by an abuse of the trust and confidence reposed in the allegedly dominant party by the allegedly subservient party.

34.That is the test which I shall apply to the facts as I find them.

35.Of course, I accept Mr. Chan SC's submission that where a series of transactions are impugned, the consideration of them may not lead to the same finding on all of them, so that this is not necessarily an "all or nothing" case.

36.On the other hand, the totality of transactions will provide part of the context within which to consider any individual transaction or series of linked or similar transactions. Indeed, Mr. Chan SC himself submits that the dispositions, in particular the magnitude of them, must be considered in context. The context includes the other transactions impugned, but it also includes the deceased's dispositions to persons other than the defendant during the relevant period (where there has not been any suggestion of anything improper arising from those other dispositions).

The law: joint accounts

37.It seems to be common ground between the parties that the beneficial ownership of money in a joint account essentially depends upon the intention of the persons depositing the moneys into that account. This intention, once derived, can identify whether the funds were held on resulting trust or for the benefit of the other holder of the joint account beneficially.

38.Mr. Chan SC submits, and I accept, that where there is evidence, presumptions are probably of little use. I can deal with the specific evidence in the case in my review of the factual material and evidence (see below).  But it is perhaps worth considering the principles generally applicable to joint accounts, which principles will require me to focus on that evidence.

39.They have been usefully summarised by Deputy High Court Judge Muttrie in Cheung Cho Kam Sindy v. Cheung Yuet Ying Rose (unreported, HCA 885/2005, 13 July 2007) at paragraphs 15 to 19. In that case, the plaintiff representative of the estate of a deceased mother claimed against the defendant daughter for a declaration that all monies deposited in the joint accounts held in the name of both mother and daughter were held on trust for the mother alone.

40.The deputy judge held that since all the funds in the joint accounts came from the mother in the first place, a presumption of a resulting trust arises. But such a presumption is readily displaced, where there is sufficient evidence of the actual intention of the parties at the time of the transaction. At the same time, there is no presumption of advancement between mother and daughter. Further, no assistance can be drawn from the terms of the bank mandates which go to the bank's authority only.

41.The deputy judge also held that if a gift is claimed, the onus is on the donee to prove it. Whilst corroboration is not required as a matter of law, where there is a claim that a gift was made by a person who is now dead, the court must approach the claim with suspicion. (For myself, I am not sure that the word "suspicion" is necessarily helpful, as it may suggest some potential bias in approach; but I accept that the claim must be approached with some caution and a true sense of enquiry.)

42.He further held that the acts or declarations of the parties before and at the time of the transaction, or so immediately after it as to constitute a part of the transaction, are admissible either for or against the party who did the act or made the declaration; but subsequent acts and declarations are only admissible in evidence against the party who made them, and not in his favour.

43.The fact of being a signatory to a bank account does not, without more, prove beneficial ownership. At the end of the day, the matter is to be decided on the facts and intentions of the deceased, on the evidence which establishes what he or she did or said in life.

44.Shortly after the close of submissions after the trial of this action, on 1 February 2011 the Court of Final Appeal handed down its judgment in Yung Shu Wu v. Vivienne Sung Wu (FACV Nos. 17 & 18 of 2009), a case involving the scope of a deceased's estate including by reference to a joint account. At the invitation of the solicitors for the plaintiff, I gave directions for the filing of supplemental submissions as to any point arising out of that judgment.

45.Mr. Chan SC submitted that the Court of Final Appeal's review of certain legal principles and propositions relating to joint bank accounts was no different from those previously submitted by him, and not the subject of any serious dispute between the parties in any event. Nevertheless, he offered certain observations to assist the court. In particular, whilst he accepted the reiteration of the principle that where a party is making an uncorroborated claim of an oral gift against the estate of a deceased person who cannot give evidence against it, the court should approach such claims with caution, he also emphasised the reiteration that corroboration was not essential as a matter of law.

46.Mr. Suen submitted that the Yung decision might be relevant not only to the correct approach as to whether the Deceased made the gifts as alleged by the defendant, but also as to whether funds withdrawn by a defendant from a company’s bank account belong to the estate of the deceased or to the company.

47.As to the former point, the Court of Final Appeal identify the correct approach is to ask what other acts were needed, as a matter of law, in order for the deceased to make gifts of his beneficial interest in the company's bank accounts and whether the evidence established, with the degree of probability appropriate to a claim against the estate of a deceased person, that the requisite acts have been done.

48.As to the second point, Mr. Suen relies on the Yung case for the finding in that case that the company was simply a nominee, with no beneficial interest in the credit balances with the banks held in the company name, consistent with the fact that no books of account had been kept or financial statements prepared for the company.

The law: presumption of advancement

49.It is trite that where property is transferred without consideration, or where property is purchased in the transferor's name with funds provided by him, a resulting trust is presumed in favour of him. But the opposite presumption of advancement operates in certain situations, in essence where the transferor was traditionally obliged to provide for and promote the welfare of the transferee.

50.There is usually said to be no presumption of advancement between mother and daughter (though I wonder whether in an appropriate case that principle might fall to be tested against modern views as to equality and non-discrimination). But in any event, there is certainly no presumption of advancement between aunt and niece, which is why the defendant has sought to rely on a presumption of advancement arising because the Deceased stood in loco parentis to her. This is what gave rise to the factual assertions as to the defendant's living with and being brought up by the Deceased.

51.I reject those assertions on the evidence (see below). As a result, there is no need for me to delve further into the law relating to presumptions of advancement (though I might point out that I would see at least extreme difficulty in any independent woman in her mid-50s asserting such a presumption as being even capable of arising as a matter of law).

The facts: the witnesses

52.Before I turned to the particular facts, I can briefly touch upon the witness evidence in this case. Both the plaintiff and the defendant filed numerous witness statements from numerous witnesses. Some of the witness statement material was put in by way of hearsay, but a significant amount of live evidence was called by the main ‘protagonists’.

53.In the light of the live evidence, which I can test against the other forms of evidence, including the available contemporaneous documentation, I do not think I need to make any specific reference to any of the witnesses whose evidence was adduced by way of hearsay witness statement.

54.I also do not think it necessary, nor is it helpful in a judgment which will inevitably be of some length in any event, to list the various witnesses who gave evidence for either the plaintiff or the defendant, and to give some general advance assessment of the credibility of each witness. I have the evidence of all witnesses in mind, and that I may not refer to any specific part of any specific witness' evidence is merely a reflection of my view that the judgment need not be lengthened by any such reference.

The facts: background

55.As already indicated in the introduction, the Deceased was born in 1916 and passed away at the age of 88 in 2005. She married and had two children, a son Chan Ming Kan Kenneth ("Kenneth"), and a daughter Lily Chan Yim Fong ("Lily").

56.Kenneth was married twice, the second marriage being in 1984 to Chow Wai Nam Ruth ("Ruth"). They had two children, a daughter born in 1986 ("Stephanie") and a son born in 1990 ("Elvin").

57.Lily has one daughter ("Bonita").

58.The Deceased's husband passed away in 1974. He had been a successful architect, one of the founders of Pokfulam Development Co Ltd, and a former chairman of Po Leung Kuk.

59.When he passed away intestate, the Deceased inherited the bulk of her husband's wealth. It would seem that, at least at first, the Deceased took care of her own financial affairs and was capable in investing and maintaining, even increasing, the wealth she inherited. It seems to be common ground that the Deceased was by nature generally strong-willed, clever and careful with her money.

60.It was also not substantially in dispute that the Deceased was "traditional" (as it was described) in that she favoured male relatives over female relatives. For example, it is clear that she significantly favoured her son over her daughter, and her grandson over her granddaughters.

61.The Deceased made a will in 1989 ("the 1989 Will"). Under the 1989 Will, the Deceased appointed Kenneth as the sole executor and trustee. After bequeathing $100,000 to Lily, and her interest in the land and business of a noodle shop to her brothers, she gave the residue of her estate to Kenneth.

62.The defendant was not named as a beneficiary under the 1989 Will at all.

63.Kenneth passed away in 1997.

64.The Deceased suffered a fall in late 2002, when she broke her hip. It would seem that her health never fully recovered after that time. Certainly, the deceased's health deteriorated from early 2004, and significantly worsened from around autumn 2004. She was very frail and unwell when Lily visited her in November 2004. She was hospitalised on 13 January 2005, and remained in hospital until her death on 3 June 2005.

65.The deceased made her last will – the 1999 Will – on 5 February 1999. But there was obviously some consideration by somebody as to the possibility of the Deceased making another will in around March 2004. In that month, Ms. Winnie Mak, a partner at Fairbairn Catley Low & Kong, was approached by the defendant on the reference of Ms. Amy Yeung ("Amy"), a manager at the United Centre branch of the DBS Bank. Ms. Mak had the impression that Amy knew the defendant quite well.

66.On 16 March 2004 the defendant instructed Ms. Mak to conduct certain land searches, and Ms. Mak gained the impression that the defendant wanted to ascertain ownership of the relevant properties apparently for the purposes for the Deceased to prepare a will. Hence, although she could not remember which of Amy or the defendant had said that the Deceased might need a will, Ms. Mak opened the file with the description "intended will".

67.At a subsequent meeting, Ms. Mak asked the Deceased whether she needed a will, but the Deceased clarified she already had a will prepared by Mr. Wong Wai-Pat of Deacons. The Deceased also mentioned that she wanted to give her estate to her grandson. Therefore, the issue of a will was not further explored.

68.The plaintiff is the executor named under the 1999 Will as a specific decision had been taken by the Deceased to appoint a professional trustee company as executor of her estate. Probate of the Estate was granted to the plaintiff on 20 February 2008.

69.The 1999 Will made various pecuniary legacies totalling $4.1 million. $500,000 was left to each of Lily, Ruth, Stephanie and the Deceased's two brothers. $200,000 was left to each of the Deceased's three sisters, four nephews and niece (the defendant).

70.Therefore, the 1999 Will treats the defendant in common with a number of other female or less immediate relatives of the Deceased.

71.Subject to those pecuniary legacies, the residuary estate was to pass to the plaintiff to be held upon trust for Elvin, the only grandson of the Deceased, payable to him in tranches when he reaches the ages of 28 and 35.

72.It seems to me to be clear that at the time of the making of the 1999 Will, the Deceased must have intended that in contrast to the relatively small specific bequest to the defendant, the vast bulk of her assets should pass following her death to Elvin.

73.On the basis of the conversation in March 2004 between the Deceased and Ms Mak of Fairbairn, it would seem to be clear that as at that date the Deceased must still have intended that the vast bulk of her assets should pass following her death to Elvin.

74.The obvious question arises as to whether, and (if so) why and when, the Deceased changed that intention so that the significant majority (approximately 80%) of her assets should pass instead to the defendant.

The facts: whether defendant was bought up as daughter by Deceased

75.It is a significant part of the defendant's case, in explanation for her financial good fortune, that she was brought up by the Deceased acting in loco parentis since she was 12 years old.

76.Leaving aside, for the moment, the defendant's intended reliance on a presumption of advancement, despite the fact that she was an independent woman well into her late 50s when the impugned transactions took place, it is necessary to consider the defendant's assertion that she was brought up as and subsequently treated as a daughter of the Deceased.

77.By way of further and better particulars of the Defence, the defendant pleaded that she lived with the Deceased since she was 12 years old until the year of 1986, that the Deceased took care and looked after her and gave pocket money to her for her daily expenses whilst a secondary school student, and all along treated her as her daughter. The defendant said she lived with the Deceased at Bellevue Court in Stubbs Road from about 1961/1962 to about 1978, and thereafter from 1978 to 1986 at an apartment in the Woodgreen Estate.

78.As Mr. Suen submits on behalf of the plaintiff, in the circumstances that this assertion is vigorously denied by Lily, either Lily or the defendant must be lying. It seems to me that this is not the sort of point upon which there can reasonably be an honest difference in recollections.

79.I take into account that Lily has nothing to gain from these proceedings, and therefore no financial motive (at least) in lying. But, there is in any event other material against which to test the defendant's assertions, including inherent likelihoods, some contemporaneous documentation, and the absence of corroborative evidence from witnesses who plainly would have been able to speak directly to the point at issue.

80.First, I accept Lily's explanation as to why she believes that the family did not live in Bellevue Court until sometime in 1964. She was able to identify this date by reference to other events around that time, including recollections of the family moving to that address about one year before Lily's father became the Chairman of the Po Leung Kuk in April 1965, and that she herself lived there for around three years before she went to school in England in August 1967.

81.Had the defendant really been living with the family before 1967, particularly where the defendant claims that she shared a bedroom with Lily, Lily could not fail to have noticed that fact. But her evidence was that the defendant only occasionally stayed overnight, or on occasional weekends (which would make sense for a cousin). She also remembered that the defendant lived with her own parents at 333 Lockhart Road.

82.Shortly after Lily went to school in England, in September 1967 Lily's father wrote her a letter (which was produced in evidence) stating "Our home is now very lonesome, only with GiGi and Bobby [the family pet dogs] and a maid". There is no mention of the defendant.

83.There are also other letters from Lily's father in the period 1967 to 1970 which make clear that the defendant could not have been living with him and the Deceased during that time. In one letter in particular, the father wrote "There are four members in our family.  Ming Kan is my son and you are my daughter"; there is no mention of the defendant. Such letters as do mention the defendant mentioned her in terms which are inconsistent with her living with the family.

84.There were also produced in evidence letters from the Deceased to Kenneth, what he was at school in England, which also appear inconsistent with the defendant's case that she was living with the Deceased at the time.

85.When Lily returned from school for visits to her parents for about two months in each of 1969, 1971 and 1973 – and for a few weeks after her father's death in February 1974 – she stayed in her own room and saw no evidence that the defendant was living there, nor did her parents suggest that the defendant was living there.

86.I accept too that in 1976, when Lily attended Kenneth's wedding in Hong Kong, she stayed at Bellevue Court and the defendant was not then living there. Nor was she when Kenneth and his first wife moved from England to live in Hong Kong with the Deceased at Bellevue Court in about 1977 until the move to the Woodgreen premises in 1978.

87.I also accept that, contrary to the defendant's case that he went in 1963, Kenneth also went to school in England around August 1967. Lily produced a letter from her father in September 1967, which appears clearly to indicate that Kenneth had been attending school in England from early that month.

88.Though I would not wish to place too great weight upon the point, if it were the only evidence, I accept that there is something in Mr. Suen's submission that the defendant was unable to answer a series of simple questions about life in the Bellevue Court premises, including as to lay-out of the flat, dining arrangements, birthday celebrations, the names and types of pets and who was responsible for them.

89.The Deceased moved to the Woodgreen premises in around 1978. Originally, in her witness statement, the defendant had said that was the year in which the Deceased's husband had died. But, that changed in live evidence, perhaps as a result of it being demonstrated by other material that the Deceased's husband had actually died in early 1974.

90.On the evidence, I accept that the defendant was not living with the Deceased at the Woodgreen premises in 1978, and did not move there with her. Whilst it is common ground that the defendant lived for a shorter period of time at the Woodgreen premises – from perhaps 1982 to early 1984 – this was the only period of time that she might have lived there.

91.Ruth gave evidence that she first met the defendant in around 1982, when the defendant was living at the Woodgreen premises, but that the defendant moved out, certainly before Ruth married Kenneth in June 1984. Ruth also gave evidence that the defendant never thereafter stayed overnight at the Woodgreen premises during any of the time Ruth continued to live there.

92.I do not accept the evidence from the defendant's aunts in so far as it was led in support of the assertion that the defendant lived for many years from the age of 12, not with her own parents and family, but with the Deceased and her family.

93.Therefore, I reject the defendant's case that she lived with the Deceased, and was treated as her daughter, from 1961/1962 to 1986, that is from the age of 12 to 34.

94.I have decided that point on the evidence which is before me. However, were it in any way necessary, I think it would be entirely appropriate for me also to be able to look at what evidence I would have expected to have been called by the defendant, but which she did not call.

95.In Wiesnicki v. Central Manchester Health Authority [1998] PIQR P324, the Court of Appeal considered a line of authorities relating to the inferences which might be drawn from the absence or silence of a witness. Brooke LJ derived from that line of authorities the following principles, which I adopt:

(1)   In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.

(2)   If the court is willing to draw such inferences, they may go to strengthen the evidence produced on that issue by the other party or to weaken the evidence, if any, produced by the party who might reasonably have been expected to call the witness.

(3)   There must, however, have been some evidence, however weak, produced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.

(4)   If the reason for the witness’s absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.

96.In this case, the obvious witness(es) for the defendant to have called in support of her case that she resided with the Deceased, and not with her own parents and her brother, would have been one or more of her parents and brother.

97.The deceased's mother is still alive, and though she lives in Canada, she has been well enough during the course of this action to travel unaccompanied to Hong Kong at least once. In any event, it is not necessary to travel to Hong Kong to put together a witness statement, which might be put in on a hearsay basis. I also do not understand there to have been any real impediment to obtaining evidence from the brother.

98.In these circumstances, where material evidence would have been expected from, say, the defendant's mother, I consider I am entitled to draw an adverse inference from her absence and/or silence. I have already referred to the wealth of other evidence called by the plaintiff, which points the mother might have been asked to answer or comment upon. Therefore, as the absence of this evidence weakens the defendant's case, I would draw adverse inferences from its absence. These adverse inferences would make even stronger the conclusions I have in any event already drawn on the evidence which was before me.

The facts: date that Ruth moved out of Woodgreen premises

99.The date when Ruth, Stephanie and Elvin ceased living with the Deceased and moved out of the Woodgreen premises is another issue between the parties.

100.The defendant's case is, and an important part of her case stands on the plank that, Ruth and the children moved out in 1999. On the other hand, Ruth gave evidence that she and the children continued to live with the Deceased until early 2002.

101.In support of her evidence, Ruth was able to produce a tenancy agreement for the apartment in Butler Towers to which she and the children moved. The lease started as from February 2002, and Ruth said (and it appears from the lease itself) that this was the first lease taken by her on that apartment. Indeed, she moved out before the expiry of the full term because the landlord exercised the break clause.

102.In addition, the school invoices for Elvin dated August 2000, March and December 2001, all give his address as the Woodgreen premises, whereas the August 2002 statement gives the Butler Towers address.

103.This documentation, contemporaneous and independent, is fully supportive of Ruth's evidence. Further, though the defendant was able to produce annual returns of the company through which Ruth had leased the Butler Towers apartment, which show Ruth's address as the Woodgreen premises throughout, I do not think these documents carry anything like the same evidential value.

104.Therefore, I have no difficulty nor hesitation in finding that Ruth, Stephanie and Elvin continued to live with the Deceased at the Woodgreen premises until early 2002. The plank of the defendant's case which requires that move to have been made in 1999 is thereby removed.

The facts: the adoption issue

105.It is fair to say that the adoption issue is, or ought to be, something of a red herring. But it arises in the following way.

106.Shortly before the dates in May 2010 fixed for the trial of this action, the defendant applied for leave to file late a witness statement of one of her aunts, Ho Yuk Ming Monica ("Monica"), a sister of the Deceased. The statement contained the suggestion, not then pleaded, that neither Kenneth and Lily were the natural children of the Deceased, but were adopted.

107.The point of raising this adoption issue was obviously to seek to suggest one reason why the Deceased might have favoured the defendant over Kenneth or Lily, or their children (in particular, Elvin).

108.The point having been raised, this caused an adjournment of the trial from May 2010 (to the dates ultimately fixed for a trial in December 2010). At the time that it was raised, it was obviously put forward as being a point of real importance (or there would be no need to adjourn the trial to deal with it).

109.Despite the need then to put in any further evidence on the adoption issue with some alacrity, the defendant moved rather more slowly. After originally indicating in August 2010 that no further additional witness statements would be served, on 6 December 2010 (just a week before the new trial dates) the defendant produced a supplemental witness statement of Monica. On 7 December 2010, the defendant produced a witness statement of another aunt, Ho Yuk Ching ("YC Ho"). On 9 December 2010, the defendant produced another witness statement from herself, albeit that it did not deal with the adoption issue.

110.The relevant point was pleaded in October 2010. Nevertheless, the amendment made simply asserted that Kenneth and Lily were not natural and blood-related children of the Deceased, so that accordingly Elvin, Stephanie and Bonita were not natural and blood-related grandchildren of the Deceased. Those pleaded facts do not then actually go anywhere in the pleading, as no obvious consequential point is made upon those facts.

111.Indeed, it is difficult to see why those facts alone would necessarily lead anywhere. But it is instructive that the defendant has clearly considered that this is an important point which she must raise because it is a material set of alleged circumstances by which she seeks directly to support her case. (I note, in passing, that Mr. Chan SC sought in closing submissions somewhat to water down the importance of this point from the level of importance apparently previously asserted.)

112.The explanation for raising the point so late in the day, namely some reluctance to deal with a point of some sensitivity and out of some deference to the Deceased, was not very convincingly put across by the defendant. But, in any event, though the timing when the defendant raised the point does not assist her cause, it is (as I say) the fact that she has sought to use it as assisting her cause which is instructive.

113.It was accepted by Lily in evidence that she was adopted, and that she is not the natural child of the Deceased. It seems that she had no idea of this fact until some time when it was raised as a possibility in the 1970s (although it may have been a fact widely known in the extended family of the Deceased, including to the defendant).

114.It seems to me that for her own purposes in seeking to shore up her defence to this claim, the defendant belatedly sought to use her knowledge that Lily was adopted, by way of extension to assert that Kenneth was also adopted. Indeed, it is only if the defendant were able to suggest that Kenneth were adopted that she could go on to assert the lack of blood ties to Elvin, as part of the explanation as to why the defendant might be preferred over Elvin by the Deceased.

115.In my view, the adoption issue is (apart from the poor light in which it paints the defendant) ultimately irrelevant to the issues which I have to decide on this claim. Even if it were correct that both Lily and Kenneth were adopted, the Deceased and her husband plainly treated them as though they were their natural children. This seems to me to be evident, for example, from the content and tone of the correspondence between parents and the children whilst they were away at school.

116.I also accept Lily's evidence that, though her brother may have been favoured more (because he was a boy), her parents never did anything or said anything which made her feel that she was adopted.

117.It is also clear from the evidence that the Deceased doted on Kenneth, and after his death she doted on her grandson Elvin. As I have already stated, the content of the 1999 Will clearly identifies the Deceased's intention (at least in 1999) that Elvin should be the substantial beneficiary of the Estate.  That intention was expressed again as late as March 2004.

118.Further, it can properly be submitted (as it was by Mr. Suen) that where parents have taken the trouble to adopt children, and have then brought them up and educated them in the way in which Kenneth and Lily were brought up and educated, it might be said that the ties between family members are even stronger or tighter than sometimes exist between family members who have actual blood ties.

119.Reference can also be made to the fact that the evidence demonstrates that the defendant was not treated as a daughter (natural or otherwise) of the Deceased and her husband: see, for example, the terms of the family correspondence, and the 1989 Will and the 1999 Will, to which I have made reference above.

120.Even leaving aside the expert opinion evidence (as to which see below), the objective evidence clearly shows Kenneth to have been the natural son of the Deceased and her husband.

121.Both Monica and YC Ho gave evidence that Kenneth was adopted in 1949, a date chosen by them by reference to their own ages at the material time, and the perceived age of Kenneth at the time. It was also suggested that the adoption took place after the birth of the defendant, namely after October 1949.

122.This evidence simply cannot stand in the face of Kenneth's birth certificate, containing the official record from the Births Registry, which states that Kenneth was born on 23 October 1947, that the birth was registered on 30 October 1947, that the birth was entered into the Births Register on 13 November 1947, and that Kenneth's parents were the Deceased and her husband.

123.The plaintiff even went so far as to confirm with the Births Registry that there is no irregularity in the Register concerning the entry of Kenneth's birth, and that the entries immediately preceding and following the entry of Kenneth's birth were also registered on the same day in October 1947.

124.But, also on the expert evidence laid before me, through the expert report and live evidence of Dr. Wan Kwong Kee, who was jointly instructed by the parties, I find that Kenneth was the natural son of the Deceased. I can deal with his findings shortly.

125.Dr. Wan conducted DNA testing on certain family members, including on samples taken from the deceased's three sisters ("the Ho sisters"), the defendant, her brother Stephen, Lily, Ruth, Stephanie and Elvin. He concluded that the Ho sisters are full siblings; the defendant and her brother Stephen are full siblings; the defendant and Stephen are likely to be nephew and niece of the Ho sisters.  He also found that Stephanie and Elvin are full biological siblings, namely that they have the same mother and father (Ruth and Kenneth).

126.Dr. Wan further considered it likely that Stephanie and Elvin and the Ho sisters are biologically related; that Stephanie's and the Deceased's deduced X chromosomes have a common ancestry. In consequence, he reached the conclusion with 95% confidence that Elvin is related to the Deceased by blood, and so was Kenneth.

127.In examination of the expert, and in his closing submissions after trial, Mr. Chan SC made the argument that, though Kenneth could be the natural child of the Deceased, he could also be just a descendant from a cousin of the father (the Deceased's husband), a boy from "the Ho clan". This is based on the suggestion, perhaps more properly described as an idea floated before the court, that Kenneth might have been adopted from members of the wider Ho clan, rather than from the general population of whatever village he came from.

128.I see nothing in this argument. Rather, it smacks of some desperation in the face of the clear expert evidence which (on top of the other objective evidence) utterly contradicts the defendant's case in this regard.

129.Where Kenneth was the natural son of the Deceased, and where there has been no suggestion that Kenneth is not the father of Stephanie and Elvin, I consequently find that they are the natural and blood-related grandchildren of the Deceased.

130.That part of the defendant's case which rests on the plank that Elvin is not blood-related to the Defendant is also thereby removed.

The facts: the impugned transactions

131.The plaintiff's claim relates to a series of different types of transactions which are impugned.

(1)    The Joint Account

132.One series of transactions relates to the operation of a joint bank account ("the Joint Account") opened by the Deceased and the defendant on around 5 January 2001 at the United Centre branch of DBS Bank (Hong Kong) Ltd. 

133.Though one account, the Joint Account in fact comprised a series of accounts or sub-accounts, including a current account, savings account, multicurrency savings account, various fixed deposit accounts, equity linked deposit accounts and a securities account. The deceased and the defendant were each authorised signatories on the Joint Account.

134.The bank statements for the Joint Account were not received by the Deceased at her address, but were sent by the bank to the defendant. This is consistent with the defendant having had custody of many of the financial documents relating to the Deceased, when she was (on her own evidence) assisting the Deceased in her financial affairs.

135.The Joint Account was opened for the receipt of the proceeds of sale of a property owned by the Deceased and one of her brothers, KS Ho (the defendant's father). KS Ho had died in 1986. When the property was sold in January 2001, the sale was effected on the signatures of the Deceased and the defendant (acting as attorney for her mother, the administratrix of the estate of KS Ho).

136.The defendant says that she was advised by a clerk ("Rita") of the solicitors used for the sale that she and the Deceased should open a joint account into which to deposit the sales proceeds. (Rita is apparently a friend of the defendant's, and she features in a number of events relevant to the claim. The defendant did not call Rita as a witness.)

137.However, as it turns out, the Deceased and the defendant each received three cheques for sums totalling $4,393,632.50, and they each deposited their separate cheques into the Joint Account.

138.That there were separate cheques issued to the Deceased and the defendant indicates that, at least at that stage, the Deceased had not instructed payment to be made so as to show a gift of her share to the defendant.

139.Subsequently, and within a few weeks, the defendant withdrew all the funds (in fact, in amounts slightly in excess of that) deposited by her. Of the approximately $4.4 million withdrawn, the defendant says that she paid $1 million to her sister and brother-in-law, kept $1 million for herself, and the balance of nearly $2.4 million was transferred to her mother.

140.The nearly $4.4 million deposited by the Deceased was placed on a time deposit.

141.The impugned transactions relating to the operation of the Joint Account arise because between January 2002 and 3 June 2005 the defendant withdrew a total net amount of $16,131,133.37. Various parts of this net withdrawal were effected in different ways.

142.A sum of $3,483,440.71 was simply withdrawn by cheques (that sum being netted to reflect to inward payments by cheque, one each in March and April 2003).

143.A sum of $10,070,629.32 was transferred from the Joint Account to the defendant's account. I note that, of that total, over $7,788,000 was transferred on dates after the Deceased was hospitalised in January 2005. (Other than for possibly even the few days in late January/early February that the defendant suggests but which I do not accept, the Deceased remained hospitalised until her death on 3 June 2005.)

144.The sums so transferred were almost always in round figures in either US or Hong Kong dollars. So, for example, sums of $300,000, $120,000, and $500,000 were transferred on 17, 22 and 24 January 2005 respectively; $2 million was transferred on 8 February 2005; $1 million and $500,000 were transferred on 20 and 21 May 2005 respectively.

145.The last two transfers were effected at 14:05 hours on 3 June 2005, the date the Deceased passed away, an hour or so after the plaintiff says the Deceased passed away at around 13:00 hours. Although apparently originally trying to distance herself from the remarkable coincidence in the time of death and time of transfer of funds, the defendant later explained that she withdrew sums on the basis of her concern that the money would be frozen in the account immediately upon the death of the Deceased.

146.As Mr. Suen asked: if the money in the Joint Account actually belonged to the defendant, why was there such a hurry to withdraw it? As the defendant agreed in evidence that, had she been able to, she would also have withdrawn at the same time the amounts placed on time deposit or in securities, the clear inference against the other circumstances is that she was trying to withdraw as much money as she could before the Estate laid claim to it.

147.Other sums withdrawn from the Joint Account were effected by cheques issued to a broker ("TPK"). Taking into account some cheques received from TPK, the net withdrawals were $2,362,528.83.

148.There were also some other withdrawals by other cheques – mostly to another securities broker ("TFS") – and a transfer received from a Leung Mo Ching, which accounts for the remaining net withdrawal of $194,816.01.

149.It is also to be noted that the Joint Account received by way of inward transfer sums totalling $363,637.60, being transferred from the Deceased's personal account in her sole name. Those transactions were in February, April and May 2005, and it seems that they were effected either because the defendant became an authorized signatory after 15 February 2005, more likely on the signature of the defendant using a General Power of Attorney in her favour.

150.That Power of Attorney is dated 29 January 2005. It was signed by the Deceased, in rather shaky handwriting and apparently both in Chinese and English. It is witnessed by Rita (by then a clerk at a different law firm) and says that it was interpreted by Rita. By the date the Power of Attorney was made, the Deceased had already been hospitalised, and so the defendant must have brought Rita to the hospital for the purposes of the grant of the power.

151.It is the defendant's case that the Deceased told her on three separate occasions that the deceased's half share of the sale proceeds, and any other money, in the Joint Account were a gift to her.

152.As to the first occasion, the defendant says that on a day in late 2000 the Deceased expressed her appreciation to the defendant for taking care of her through the years, expressed sadness that Kenneth had passed away and that Ruth, Stephanie and Elvin had moved out in 1999, and said that as the property was to be sold the Deceased would give her share to the defendant.

153.The second occasion was over dinner on 4 January 2001, when the Deceased told the defendant she had treated the defendant as if she were a natural daughter all along, and in gratitude of her care and affection she decided to give the defendant much more than the sale proceeds of the property. According to the defendant, the Deceased said she would deposit money into the Joint Account from time to time, which the defendant could treat as her own, and that any remaining balance in the Joint Account at the time of the Deceased's death would belong to the defendant.

154.The third occasion was after the defendant had transferred out of the Joint Account the half share that belonged to her father's estate. The defendant says that when she told the Deceased of those transfers, the Deceased smiled and said that the defendant could treat all the money in the account as her own, withdrawing money whenever she liked.

155.On 28 March 2006, the defendant withdrew from the Joint account the sum of $160,000 (which withdrawal is not explained by the payment of any estate duty payable by the Estate).

156.The Deceased and the defendant also had a joint account  with DBS Vickers (Hong Kong) Ltd ("the Vickers Account"). In April 2004 a ¥14 million investment in a Japanese basket of equity linked notes was bought by or on behalf of the Deceased with funds in the Joint Account. That investment was paid out upon maturity in May 2006 by way of an investment in 71 shares in NTT Docomo Inc ("the NTT shares"). Although originally integrated into the Joint Account, the NTT shares investment was on 22 May 2006 integrated into the Vickers Account.

(2)   Payments from the DBS Account

157.The Deceased had an account in her sole name at the DBS bank ("the DBS Account").

158.Between 11 April 2003 and 12 October 2004, a total amount of $2,616,755.37 was paid, by seven cheques and one cashier order, from the DBS Account to the defendant. Of those, and by way of example, in mid-2004 the defendant received by two cheques and the cashier order the sums of $512,825.00, $497,362.18, and $500,000.00 respectively (ie. over $1.5 million within a period of one month).

159.In her pleaded case, the defendant makes no admissions to the asserted payments on the various dates, but she also denies that the payments were effected as a result of any undue influence.

160.In her evidence, the defendant said that most of the cheques issued from the DBS Account were given by the Deceased to her to settle invoices for various listed shares the defendant had purchased.

161.She said that the payments were all inter vivos gifts, although as it was a long time ago she cannot recall the circumstances in which the Deceased made those gifts to her. She said that because the Deceased was a smart and astute woman, and was of sound mind throughout the years 2001 to 2005, the Deceased would not have been under any undue influence.

162.As regards the cashier order payment of $500,000 made on 20 July 2004, the defendant said in her last witness statement filed shortly before the trial that in around April 2004 the Deceased had told her she had an investment unit matured and wanted to distribute cash and buy insurance policies for her relatives. Therefore, the defendant accompanied the Deceased to the DBS Bank where the branch manager Amy wrote down on a piece of paper the names of the beneficiaries and the amounts of gifts and insurance, which the Deceased confirmed by signing on that piece of paper.

163.That piece of paper was produced in evidence and it refers to a distribution from funds of about $8.7 million to a list of the Deceased's relatives in identified sums of cash and insurance. The note refers to the defendant receiving $500,000 cash and $800,000 insurance. The same piece of paper also refers to an insurance policy for $1,500,000 to be jointly held by the defendant and an uncle for "future handling fees" (see below).

164.The note also refers to a payment of $1 million cash to Stephanie, with an indication that she should receive that sum because she was, or was about to be, 18 years old. As I understand it, it is not disputed that Stephanie in fact received that sum around the time of her 18th birthday in 2004.

(3)    Insurance policies

165.Between March 2004 and February 2005, the Deceased bought from Aviva Life Insurance Co Ltd five insurance policies, on which the defendant was designated as a beneficiary or co-beneficiary, with a total death benefit of $9,084,193.47.

166.These five policies were just some of the number of policies purchased by the Deceased over the relevant period. They were all bought through services provided by the DBS Bank, apparently with the assistance of Amy. All the life policies were purchased each with a single payment of the premium. There were certain children education savings plans which required annual payments.

167.The beneficiaries of the largest total sums insured under the policies were Elvin (approximately $15 million), the defendant (approximately $9 million), Stephanie and Lily (approximately $2.6 million each).

168.Two policies were taken out in favour of the defendant in late June/early July 2004 by reference to the handwritten note signed by the Deceased (see above). One was policy number K34325 for $1,500,000, in favour of the defendant and one of her uncles jointly, where the defendant later was paid a death benefit of $823,104.66. Another was policy number K34361, on which the defendant received the death benefit of $873,631.87.

169.The defendant was also the beneficiary under a policy number K19608 which was issued earlier on 24 March 2004 on a single premium of $1,200,000 and which paid a death benefit of $1,327,456.94.

170.At around the same time, on 26 March 2004, policies were taken out in favour of two of the deceased's brothers (sharing $1 million) Lily ($1 million), Ruth, Stephanie and Elvin (sharing unequally $4,500,000), and, on 25 March 2004, for Bonita ($100,000).

171.There were also a number of insurance policies taken out on 24 November 2004. The defendant was the beneficiary of one policy number K56909 with a single premium of $1 million and death benefit of $1,010,000. The other policies were taken out in favour of Bonita ($1 million), Lily ($1,500,000), Stephanie ($1,500,000) and Elvin ($6 million).

172.The last insurance policy number K66872 was taken out on 7 February 2005 on a single premium of $5 million, with the defendant as beneficiary. The defendant subsequently received a death benefit of $5,050,000.

173.That date was during the Deceased's final period of hospitalisation before her death. It was also after the Deceased had signed the General Power of Attorney in favour of the defendant on 29 January 2005. Notwithstanding that, the policy documentation appears to have been signed by the Deceased on 4 February 2005.

174.In re-examination, the defendant said that the Deceased signed this policy documentation in the bank, and that she was there with Amy when the Deceased signed it. However, the defendant did not call Amy to give evidence to corroborate that. In any event, I find, by reference to the hospital notes, that the Deceased was admitted to hospital on 13 January 2005 and remained there until her death on 3 June 2005.

175.This means that the policy document must have been signed by the Deceased in hospital, and it is more likely than not that the bank signatures and chops were appended to the document subsequently, after the defendant had returned the document to the bank for its action.

176.The evidence demonstrates that the purchase money of $5 million for policy number K66872 came from two sources: $2.6 million withdrawn from the DBS Account, and which represented the proceeds of sale of property called Phoenix Apartments; and $2.4 million withdrawn from the Joint Account.

177.Phoenix Apartments is a property which the 1999 Will provides to be an express bequest in favour of Stephanie. Clearly, once that property had been sold, the benefit of it could not pass to Stephanie.

178.The sale and purchase agreement for Phoenix Apartments was entered into on 16 November 2004, albeit that the Deceased received two initial deposits totalling $262,000 (10% of the purchase price) by two payments on 8 and 18 November 2004. The assignment was dated 28 January 2005 and the Deceased received the balance of the purchase price the following day.

179.On 4 February 2005, $2.6 million was withdrawn from the DBS Account. The payment was effected by the defendant using the Power of Attorney. On the same day, the defendant withdrew the $2.4 million from the Joint account. The total $5 million was then used to purchase this last insurance policy in favour of the defendant.

180.As regards the child education savings plans, they were issued in August 2001 and there were 10 policies of $100,000 each, totalling $1 million. The beneficiary under the policies was Elvin.

181.However, it seems that on 6 August 2003 the Deceased sought to nominate the defendant as (replacement) beneficiary to the child education savings plans. The change in nominated beneficiary was not permitted because the contracts provided for a trust policy for the benefit of the life assured. But, it is clearly an oddity for there to have been any attempt to change the beneficiary of child education policies in favour of a woman in her mid-50s.

(4)   Angel Dream

182.Angel Dream International Ltd ("Angel Dream") was a company incorporated in the British Virgin Islands on 13 August 2002. On 8 January 2004, the Deceased became the sole shareholder was appointed sole director of Angel Dream.

183.Angel Dream had a corporate bank account with the DBS Bank in Hong Kong ("the Angel Dream Account"). That account was opened with the assistance of Amy. On 9 January 2004, the Deceased went to a corporate services company connected to the bank, where she signed various documents to open the Angel Dream Account, with herself as sole authorised person to operate that account. She also signed an investment fund ordering form in relation to a $15 million investment.

184.That investment was funded as follows. On 9 January 2004, the Deceased withdrew $1 million from the DBS Account and made two deposits of $500,000 into the Angel Dream Account. On 13 January 2004, the Deceased transferred $14 million from the DBS Account to an account which she held with the same bank at its Macau branch, and then subsequently effected an onward transfer of the $14 million to the Angel Dream Account.

185.The units in the investment fund were purchased with $15 million on 15 January 2004.

186.On 20 May 2004, the Deceased passed a written resolution by which she resigned as Angel Dream's sole director, and appointed the defendant in her stead. The defendant consented to act as director of Angel Dream. Angel Dream received the bearer share certificate (apparently held by the defendant) for exchange to a registered share. The defendant passed a sole director's resolution by which the bearer share was exchanged for a registered share in her name.

187.Further, with effect from 8 June 2004, the Defendant became the sole person authorised to operate the Angel Dream Account.

188.Of all the documents executed in May/June 2004 relating to the transfer of ownership and control of Angel Dream, including as to the operation of the Angel Dream Account, the only document signed by the Deceased was that dated 20 May 2004 under which she tendered her resignation as director and appointed the defendant as new director with immediate effect. Obviously, that must have been predicated on, and have constituted an assertion by the Deceased of, ownership of Angel Dream. That document, amongst others, appears to have been produced by someone else (presumably DBS corporate services) and there is the request "pls sign" at the place where the signatures were appended. That at least suggests that the documents may not have been signed at DBS, but rather had been taken away by or sent to the defendant and the Deceased for signature.

189.But the central point is this: there is no document signed at that material time by the Deceased which can identify her own express intention to divest herself of ownership of Angel Dream, or the funds in the Angel Dream Account, or any investment held by the company.

190.On 23 February 2005, a dividend distribution of $750,000 was deposited into the Angel Dream Account, and on 13 May 2005 the defendant withdrew $745,000 for transfer to her own bank account. The investment fund matured on 28 February 2007, and the defendant subsequently withdrew $15,530,566.02 from the Angel Dream Account for transfer to her own bank account.

191.The remaining $2.21 was withdrawn by the defendant on 29 May 2007, and the Angel Dream Account was then closed. On 1 May 2008, Angel Dream was struck off the BVI companies register.

The facts: the defendant's response to the plaintiff's enquiries

192.Plainly, where there are significant questions which may turn upon the credibility of the defendant, it may be instructive to see how she reacted to the enquiries made of her by the plaintiff in advance of the commencement of any proceedings, and at a time when the plaintiff was simply investigating the position relating to the Estate.

193.The plaintiff obtained certain banking documents from the DBS Bank.  Naturally, the plaintiff was to investigate certain matters, including as regards the Joint Account.

194.On 6 January 2006, the defendant met with Mr. Ma Sun Cheong, director of probate services, the member of the plaintiff's Probate Services team handling the administration of the Estate. (Mr. Ma gave evidence which was in the main speaking to the contemporaneous documents. I accept his evidence.) Also present at the meeting was a Ms. Mina Yip. As with other subsequent meetings, meeting notes were contemporaneously compiled.

195.In that meeting, as well as explaining the normal procedures for application of probate, Mr. Ma explained to the defendant that having regard to the fact that there were quite a number of bank accounts held by the Deceased, it was highly probable that the Estate Duty Office ("EDO") would raise queries in tracing destinations of certain withdrawal transactions. The defendant agreed with Mr. Ma to sign a letter to authorize DBS to release $1 million from one of the joint names accounts held with the Deceased for part settlement of estate duty.

196.Importantly, the defendant also signed another letter to confirm that all the joint accounts held with the Deceased in DBS were half-owned by her, and that the tax chargeable on the remaining half of the entire balance should be wholly borne by the Estate. (This is clearly inconsistent with the later claim by the defendant to total ownership.)

197.As predicted by Mr. Ma, the EDO did raise certain queries in relation to some bank transfers. They were passed on to the defendant by the plaintiff on 3 April 2006, with the request to provide information as to the nature of the withdrawals. In the absence of a response, on 7 July 2006, the plaintiff asked for further information in response to certain specific withdrawals from the accounts, in particular when the recipient of withdrawals was the defendant herself.

198.On 25 August 2006, the defendant responded by letter stating that because of the passage of time it would be "very difficult for me to find out the particular nature of each withdrawal and reply to you item by item". The letter went on to state that:

"Among the withdrawal of her moneys, since I have taken up the responsibility of taking care of my late aunt during the last few years before she passed away, all I could remember is that a large part of the withdrawals were used to settle her hospital fees and other medical expenses from 2002 to 2005 and were also made to support her daily living, for example, expenses for supporting two maids, a driver and a car and many other household expenses.

Also, as I have devoted a lot of my time and financial resources to taking care of my late aunt and have incurred some disbursements for her expenses sometimes, she had also returned some of her money to me and given some of them to meeting my own financial expenses as a kind of reward to me. Lastly, some of the money withdrew were also used for investment purpose, like equity linked deposit, bonds, funds and stocks, etc."

199.It might be helpful to note at this point that the cheque stubs later disclosed by the defendant (see below) showed the payment of living expenses for the Deceased, including by way of some reimbursements to the defendant, not from the Joint Account but from the DBS Account (an account in the Deceased's sole name). I also note that the investment purposes referred to are not suggested to have been investments on behalf of the defendant, the inference being that they were the Deceased's investments.

200.On 13 September 2006, the plaintiff asked for further details about hospital fees and living expenses, with supporting documents if available. The defendant was also asked to let the plaintiff know the amount of "reward" the Deceased gave her.

201.On 28 November 2006, the plaintiff wrote to the defendant noting that the Deceased had on 13 January 2004 remitted $14 million to Angel Dream from her account with DBS Bank Macau. The defendant was asked whether she had any idea about the nature of this remittance.

202.In response, the defendant spoke to Mr. Ma by telephone on 27 December 2006, and his telephone note of that date records the defendant as having said that "Angel Dream … was a BVI Company and it was transferred out by the deceased in 2004". Mr. Ma also asked her to provide the plaintiff with documents about the transfer.

203.It seems from what the defendant said, about a transfer out, that she was trying to distance herself from Angel Dream, and to suggest that the company was transferred to a genuine third party (i.e. not her). This conversation took place less than a month after the defendant had made the last payment of fees for the continued registration of Angel Dream on 30 November 2006.

204.On 23 February 2007, the plaintiff asked the defendant for copies of information about the transactions of the Deceased, and the transfer of shares of Angel Dream.

205.On 4 May 2007, the plaintiff referred to the various previous correspondence, and chased up a response to the requests for the nature of withdrawals from the Joint Account, the provision of statements or any information about the bank transactions, the provision of information about the transfer of shares in Angel Dream, details relating to the medical and other living expenses, and asked whether the Joint Account was for investment purpose for the deceased solely.

206.On 3 July 2007, a further chaser for this information and documentation was sent, because the defendant had not sent any reply. The letter also asked the defendant to arrange withdrawal of $1,500,000 from the Joint Account to make a payment on account of estate duty.

207.On 16 July 2007, the defendant finally responded, but without producing any further information or documents. Instead, she repeated her assertion that it was difficult to remember or find out or know the particular nature of withdrawals and she suggested (obviously without any proper basis):

"Actually I already did my utmost to let you know the information of the details of the withdrawals which have been stated in my letter to you of 25th August 2006."

208.As to the request for the $1,500,000, the defendant asked for confirmation that the plaintiff and/or the Commissioner of Estate Duty had the absolute right to draw the money from the bank account "which is not solely held by the deceased".

209.Upon receipt of that letter, a further meeting with the defendant was arranged. It took place on 3 August 2007, and Mr. Ma explained to the defendant that the nature of withdrawals from the Joint Account would decide whether there was estate duty payable or not, and if so who should bear the estate duty. He further explained that: (1) if the withdrawal was a gift, the donee should bear the estate duty; (2) if the withdrawal was a loan, the estate would bear the estate duty but the recipient needed to repay the loan to the estate; (3) if the withdrawal was a repayment of debts by the Deceased, no estate duty was payable.

210.In the absence of the defendant producing any concrete details supporting the nature of withdrawals, Mr. Ma suggested there would be no point to wait for her reply, and estate duty would be paid on the withdrawals first. The defendant agreed to arrange to draw a cheque for $1,500,000 as payment toward estate duty. When Mr. Ma again requested the defendant to forward all documents, vouchers, bank statements etc in connection with the Deceased, the defendant said it was difficult to do so.

211.On 28 August 2007, a further request was made by the plaintiff to the defendant for documentation, including that relating to Angel Dream.

212.On 10 October 2007, the defendant wrote to say that this would be her last letter to inform the plaintiff that, because of the reasons mentioned in previous letters, she could not give any further information about the transactions records as requested. (Against the subsequent materials produced, this was plainly not true.) She also asked for the application for probate to be accelerated.

213.On 15 October 2007, the plaintiff again pursued the relevant information, and again set out the potential estate duty consequences depending upon the nature of the withdrawals.

214.On 20 February 2008, a further meeting took place between the defendant and Mr. Ma. At that meeting, the defendant said that the Deceased trusted her and therefore she handled the financial affairs on behalf of the Deceased. She also expressed her intention that after the issuance of the grant the investments held in the joint accounts should be sold and the cash should be distributed "in equal shares".

215.As regards the foreign company, i.e. Angel Dream, the defendant asserted that this was not subject to Hong Kong estate duty and asked why the plaintiff needed information about it. Mr. Ma explained that the company might be an asset of the Estate and that the plaintiff would continue to trace it.

216.Another meeting took place on 15 April 2008. On this occasion the defendant was accompanied by a woman friend, apparently Rita. The meeting appears to have been called by the defendant to see how the plaintiff was dealing with the assets held in the Joint Account as the defendant "would like to take her half share of assets and as soon as possible".

217.Again, this claim to a half share is wholly inconsistent with the later claim to full ownership.

218.On 21 May 2008, the plaintiff wrote to the defendant in relation to the funds used to open the Joint Account, and the subsequent withdrawal of approximately half of those funds. The letter also raised questions in relation to the further amounts subsequently withdrawn on the defendant's instruction. This letter demanded the return of the various sums.

219.On 2 June 2008, the defendant attended a meeting with Mr. Ma and Ms. Yip in response to the demand letters. The defendant offered some explanation as to the operation of the Joint Account, part of which was that she and the Deceased had enjoyed a close relationship. She said that the Deceased trusted her and treated her like a daughter and was agreeable to the sums transferred to her to make investments, payment of hospital expenditures and other miscellaneous expenses etc. (There is no clear statement that the investments were anything other than the Deceased's investments, and certainly the hospital expenditure and other expenses were those of the Deceased.)

220.Further, in the meeting, the defendant was expressly asked whether the moneys drawn by her were gifts made to her, or was she merely a trustee holding moneys for the Deceased for purposes like making investments. The defendant answered by saying that "some of sums transferred out might be gifts made to her by the deceased", and she asked what would be the consequences if that were so. Mr. Ma explained that gifts would be subject to estate duty payable by the defendant.

221.The extremely tentative raising of the possibility of only some of the withdrawals being gifts is to be contrasted with the subsequently evolved firm case of the defendant that all of the withdrawals were gifts, following several occasions on which it was supposedly made clear by the Deceased that the gift was being made.

222.At a further meeting with Mr. Ma and Ms. Yip on 8 August 2008 called by the defendant, she was accompanied by Rita (her friend who was a legal clerk). The defendant again asserted how close she was to the Deceased and how she was even allowed to have free use of funds held in their joint names account. She reiterated that she could not recall why the moneys were drawn out, and all she could explain was that the moneys drawn were given to her by the Deceased.

223.On 13 August 2008, the plaintiff sent to the defendant, at her request, copies of the bank statements of the Joint Account for the period from 31 January 2002 to 30 June 2005, and asked for an early reply in response to the demand letters.

224.On 17 November 2008, solicitors for the plaintiff wrote a formal letter of demand before action.

225.By a letter dated 15 November 2008, but chopped as received on 21 November 2008 and likely sent after 17 November 2008, the defendant wrote in response to the letters in relation to the various drawings and fund transfers to her account. She stated:

"I now write to inform you that the cheques which drawn to me and to [TPK and TFS - the two securities companies] were gifts to me from my aunt, the deceased for my investments whereas the sums transferred to my account (except those for the medical and various expenses for my aunt) were also gifts to me at the wish of my aunt, the deceased for my own benefit.

I hope I have answered all your requests satisfactory (sic)."

226.By letter dated 25 November 2008, the plaintiff's solicitors asked for clarification of those statements, and again pursued a request for all supporting documentation available as to the nature of the withdrawals. The point was made that given the significant amounts involved in most of the transactions, it is inconceivable that the defendant would not be able to provide any details at all about the nature of any of the withdrawals or any supporting documents.

227.On 18 December 2008, solicitors for the defendant sent a response on instructions, that the Deceased treated the defendant as her own daughter during her lifetime and was willing to be responsible for the defendant's living expenses. The letter asserted that the defendant had been living with the Deceased since she was young and had been looking after the Deceased like her mother for a long period of time. They also set out their instructions that at the time of the opening of the Joint Account in 2001, the Deceased had told the defendant that all moneys in the Joint Account belonged to the defendant. Accordingly, it was not necessary for the defendant to account for the withdrawals and fund movements to the plaintiff.

228.Clearly, the instructions given by the defendant to her solicitors for the purposes of that letter are not consistent with the earlier correspondence from the defendant, and what was said by the defendant in meetings between the plaintiff and defendant.

229.There can be little difficulty in identifying, through a review of the materials, the gradual evolution and exaggeration of the defendant's case, all the while against a clear and deliberate decision not to provide any answers to even some of the questions, or to provide any documentation, no doubt in an attempt to thwart the plaintiff's genuine enquiries.

Findings

230.Insofar as I have not already pointed to the findings I make in relation to the facts, I also make the following findings. In doing so, I am taking account of my own view as to the veracity of various witnesses including the defendant, where in short I do not find the defendant to be a truthful witness.

231.I am conscious that witness demeanour is often not a reliable indicator of the truthfulness or otherwise of that witness. I have, therefore, been careful to test what the defendant has said in evidence against the other evidential materials available to me. Nevertheless, I found the defendant's evidence to be generally unconvincing because of the vague, unsubstantiated or internally inconsistent versions of events which she told. Fundamentally though, her version of events simply did not stack up against the independent contemporaneous documents as were available, whereas the witnesses called by the plaintiff gave evidence which was usually (at least in important areas) verifiable and supported by reference to that kind of documentation.

232.The defendant's attempt to put forward an evolving and exaggerated account has done her overall position no favours. For example, the very late production of some cheque stubs relating to the DBS Account identified that one payment made by cheque may well have been a reimbursement to the defendant by the Deceased of an amount of property tax paid. But that evidence, albeit apparently in favour of the defendant, is inconsistent with the defendant's original firm position that all 8 payments made from the DBS Account which are the subject of the claim were inter vivos gifts.

233.It has been necessary, therefore, to examine the evidence to see where (when shorn of the inconsistencies or exaggerations) the evidence independently should lead to a finding in the defendant's favour.

(1)   The Joint Account

234.I have already indicated that I do not believe the defendant's case that she lived with the Deceased from the age of 12 until 34.  I do not accept that the defendant was treated as though she were the natural daughter of the Deceased. Any conversation about a gift, predicated in part upon the defendant having lived with the Deceased as her daughter, cannot on the balance of probabilities have taken place.

235.That she has lied about that is obviously something that I can take into account in assessing generally the defendant's credibility on other matters (though I am not so naive as to assume that a person who lies about any one thing must have lied about other things).

236.I have also already indicated that I do not accept the defendant's case that Ruth, Stephanie and Elvin stopped living with the Deceased in 1999. That finding is, in effect, fatal to the defendant's case as to the alleged conversations in which the Deceased is said to have gifted her all the monies in the Joint Account, and any other monies as might be put into that account at any time in the future.

237.I have found that in late 2000 and early 2001, Ruth, Stephanie and Elvin were all still living with the Deceased at the Wood Green premises. Any conversation during that period, which is predicated on the asserted basis that Ruth and grandchildren had moved out in 1999, cannot on the balance of probabilities have taken place.

238.I have also taken into account the fact that the 1999 Will provides only a small pecuniary legacy for the defendant. Indeed, it is this problem (and by reference to the date) that the defendant must seek to avoid by her story. The sudden massive increase in benefit to the defendant above what was provided for in the 1999 Will must raise questions as to the veracity of the suggested gift(s). That must be all the more so when one version of the conversations include within the gift as yet unspecified (and apparently unlimited) further amounts, being whatever might be subsequently transferred into the Joint Account.

239.There is also an extreme unlikelihood in the way in which the Deceased's share of the sale proceeds was left in the Joint Account, and indeed put on time deposit, if that amount had been gifted to the defendant. On the defendant's case, the only purpose for opening a joint account was because it was necessary (on Rita's advice) to open such an account to receive the sale proceeds. Once that purpose had been achieved, if there had been a gift there would be no reason to have continued to operate the account on a joint basis, and no reason for the defendant not to have withdrawn the alleged gifted funds immediately. That the defendant withdrew all the sums deposited by her, but none of those deposited by the Deceased points firmly against the existence of those latter sums having been gifted to the defendant.

240.Further, the very nature of the account with several integrated sub-accounts tends at least to suggest that that account was opened because the Deceased had the intention later to deposit funds into it for investment purposes. Indeed, on the evidence, that is precisely how some of the integrated sub-accounts were later operated.

241.I do not think that the fact that the defendant occasionally assisted the Deceased with her investments alters the intention. Indeed, the enlisting of the defendant's aid in the conduct of her financial affairs is actually more consistent with the Deceased’s continuing beneficially to own the monies and investments for which she sought assistance. The Deceased would hardly ask the defendant for assistance in managing the defendant's own money.

242.The defendant was also evasive and inconsistent on her evidence on this point. At times, she asserted that the money was jointly owned by the Deceased and herself, but she later had to withdraw that answer and instead asserted it was not jointly owned because it was a gift to her. 

243.I reject Mr. Chan's submission that the defendant's evidence was clear that either one of herself or the Deceased was entitled to use any and all of the funds in the Joint Account at any time during their lifetimes. First, I do not think that evidence was clear. Secondly, the submission itself identifies a confusion as to the actual ownership of the funds in the Joint Account.

244.The defendant's evasiveness and inconsistency was also wholly apparent in her pre-action dealings with the plaintiff (see above). Quite simply, she was generally hoping to provide very little assistance to the plaintiff, no doubt in the hope that the whole thing would go away. The defendant's case has evolved both as to the element of ownership, and as to the reasons why she acted as she did.

245.I have also already pointed to the inference which arises from the withdrawals on the very day of death of the Deceased, and the acceptance in the defendant's evidence that she would have withdrawn even more money had she been able to do so on the day.

246.I reject the defendant's case as to the alleged conversations in which the gift of the funds in the Joint Account is said to have been made. On the evidence, it seems clear to me that the intention at the time the deceased's share of the sale proceeds was paid into the account was that that share was and would be beneficially owned by the Deceased, namely on a resulting trust.

247.I also reject the defendant's case that there was any conversation in which the Deceased gifted to the defendant any other sums as might come to be paid into the Joint Account at any point in the future, or that whatever sums as stood in the account at the time of the Deceased's death would be owned by the defendant alone.

248.I would allow this aspect of the claim in full. The plaintiff is entitled to a declaration that the balance standing in the Joint Account as at 3 June 2005 (including any stocks or securities held in any sub-account) belonged to the Estate. The defendant must also repay the sums withdrawn by her from the Joint Account.

249.I would also allow the claim to repayment of the sum of $160,000 which was withdrawn by the defendant from the Joint Account on 28 March 2006.

250.Further, it seems to me that it also follows that the plaintiff is entitled to succeed on its claim to the return of the investment in the NTT shares, and any dividends that might have been paid subsequently on those shares.

(2)   The DBS Account

251.As stated above, the defendant's case is that most of the cheques issued from the DBS Account were given by the Deceased to her to settle invoices for various listed shares the defendant had purchased, although as it was a long time ago she cannot recall the circumstances in which the Deceased made those gifts to her. She denies any undue influence.

252.As regards the cashier order payment of $500,000 made on 20 July 2004, there is the note on the piece of paper showing the names of the beneficiaries and the amounts of gifts and insurance, including for the defendant, which the Deceased confirmed by signing on that piece of paper.

253.In the light of that contemporaneous document, which clearly evidences an intention on the part of the Deceased to gift various sums in cash and insurance to the relatives and in the amounts listed, the plaintiff's claim as regards that $500,000 (and the relevant insurance policy, see below) must fail.

254.The plaintiff argues that, as for other transactions, the benefit conferred on the defendant is out of proportion to the alleged motive for the Deceased to give her gifts as a "daughter". I have already rejected the existence of a motive.

255.But, in any event, it seems to me the fact that the defendant is able to demonstrate a clear intention on the part of the Deceased to gift particular sums to the defendant, as one amongst a number of relatives, makes the other transactions around the same time even less readily inexplicable.

256.I also take into account the absence of documentation which the defendant might have provided in relation to the alleged share purchases to which she says the cheques were issued to her as gifts; and that it seemed to be the defendant's case that she could really withdraw money from the Joint Account for her own use, so that she could have used that money to purchase securities.

257.I further take into account the apparently selective production of documentation by the defendant, some of which is helpful to the defendant's case, some of it not. It is of note that the defendant has been able to produce this kind of documentation, albeit little of it, despite her professed inability to produce documentation during the totality of the period of enquiries being pursued by the plaintiff before commencing this action.

258.At a very late stage in the proceedings, the defendant was suddenly able to produce two books of cheque stubs relating to the DBS Account (as well as a few other wholly unconnected documents). It is correct that the cheque stub relating to the payment of $52,880 on 25 October 2004 identifies that the cheque was in relation to a payment to the HKSAR government for property tax, and the stub also says "Ping [the defendant] paid on my behalf".

259.I accept this is clear evidence that the payment of the $52,880 was by way of reimbursement, and so the claim in respect of that sum cannot succeed. (This must be the case, even though this evidence actually contradicts the defendant's original position that this payment was a gift. As I have indicated above, the defendant's exaggeration has not helped her own cause. But, though I reject any suggestion that the sum was a gift, it does appear to have been paid to her by way of reimbursement.)

260.A number of the other material cheque stubs identify where payments are made as reimbursement of payments previously made by the defendant on behalf of the Deceased. Some other cheque stubs suggest that the defendant was paid some part of profits made on particular share transactions. These various payments are not the subject of this claim.

261.As regards the other cheque payments which are subject to the claim, three cheque stubs seem to identify that the sums claimed were paid in relation to the purchase of certain securities. But, there is nothing to identify the making of an intended gift, and on the basis of the other cheque stubs, it seems to me more likely than not that these would have been reimbursements, rather than gifts.

262.(Incidentally, it seems from the cheque stubs that it was the DBS Account which was used by the Deceased for the payment of ongoing expenses, including taxes and medical expenses.)

263.In the circumstances, save for the amounts of $500,000 and $52,880, I am satisfied on the balance of probabilities that the other withdrawals from the DBS Account occurred as a result of the undue influence exercised by the defendant over the Deceased.

264.I would therefore allow this part of the claim to the extent of $2,063,875.37.

(3)   Insurance policies

265.The defendant's case is that the insurance policies were all taken out on the initiative of the Deceased without any undue influence.

266.In this context, Mr. Chan SC submitted that it is important to bear in mind that benefits under the insurance policies were payable only after the death of the Deceased. He suggested that this was more acting to the context of a will, rather than an inter vivos gift (despite the fact that the defendant's case is actually to have been predicated on their having been inter vivos gifts).

267.Mr. Chan SC placed reliance on the decision of the Court of Final Appeal in Nina Kung v. Wang Din Shin (2005) 8 HKCFAR 387, at [177-178], where the point was made that a will, which merely regulates succession after death, is very different from a gift inter vivos, which strips the donor of his property during his lifetime. In such a case, it is not sufficient to show that the circumstances attending its execution are consistent with the hypothesis of its having been obtained by undue influence, it must be shown that they are inconsistent with the contrary hypothesis.

268.However, in the context of the decision I had to make in this case, I do not think that such a principle is actually substantially different from the test which I have already identified that I will adopt. I do not think that I am greatly assisted by considering whether a party has discharged a burden of showing that the circumstances are consistent with a hypothesis of undue influence, or whether a party has discharged the burden of showing that the circumstances are inconsistent with the contrary hypothesis. I am more concerned to look at the evidence in totality to see whether, on the balance of probabilities, that evidence justifies a finding that any of the individual impugned transactions was procured by undue influence.

269.Also, on the facts, whilst it is correct that the insurance policies provided for a payment payable only on the death of the Deceased, the policies were obviously intended to create an immediate disposition from the Defendant by the payment of the single premium payment for each policy. In other words, on the facts, I do not think the analogy with the will is in any event very apt.

270.I can deal shortly with the policy number K34325, for which a death benefit of $823,104.66 was paid out to the defendant on 9 July 2005. In her closing submissions, the defendant has accepted that that policy was not a gift, but was intended to be held jointly by the defendant and an uncle "for future handling fees". This is a reference to the handwritten note made by Amy, but signed and confirmed by the Deceased. The defendant accepted that "for future handling fees" probably meant her funeral expenses (though it can be pointed out that the 1999 Will makes express provision for such funeral expenses). Anyway, the defendant has produced no evidence as to what she has done with this money, and the claim on this policy must succeed.

271.On the basis of the handwritten note which identifies why certain policies were issued in favour of particular relatives in particular amounts in June 2004, I accept that there is a ready and credible explanation for the defendant to have become a beneficiary under the policy number K34361. Put another way, I would not be satisfied on the balance of probabilities that that policy was issued in her favour as a result of undue influence.

272.Similarly, even though there is no equivalent documentary evidence such as the handwritten note, the policy number K19608 in favour of the defendant was taken out at the same time as a number of different policies then issued in favour of other relatives of the Deceased. I do not think that the particular amount of that policy is so disproportionate that it can be said to be inexplicable as against any motive that the Deceased might have had to give certain sums to some of her relatives.

273.Though with some greater hesitation against the chronology, and in particular the fact that by late November 2004 the Deceased was clearly very frail having just suffered a significant deterioration in her health, it strikes me that the same logic should probably apply in relation to the policy number K56909. Again, on the balance of probabilities, I do not think the particular amount of that policy is so disproportionate as to be inexplicable.

274.Nevertheless, where the Deceased is to be taken as having intended to make significant gifts by way of these insurance policies in favour of the defendant (together with the $500,000 cash), it seems to me that those are matters which I can take into account in assessing the proportionality of any other sums of which the defendant has had the benefit.

275.But, in any event, the $5 million insurance policy taken out only in February 2005 (and where the defendant cannot pray in aid the simultaneous issuing of any policies in favour of any other relative) strikes me as being wholly disproportionate, and not readily explicable except by reference to the exercise of undue influence by the defendant over the Deceased.

276.I take into account that approximately half of the sum used to purchase that policy was taken from the sale of the Phoenix Apartments property, which the 1999 Will had identified as a bequest for Stephanie (though I also have not lost sight of the fact that Stephanie was in fact a recipient of a cash sum and death benefits from insurance policies). I also take into account that some of the money used to purchase the policy was made available through the use of the Power of Attorney, and the feature that notwithstanding that power the policy documentation itself appears to have been signed by the Deceased on her own signature, whilst hospitalised.

277.As regards the attempted re-nomination of the defendant as beneficiary under the child education savings plans, the defendant eventually dealt with this (but only during cross-examination) by asserting that she was unaware of the attempt. The plaintiff suggests this evidence should not be believed against the late response, the fact that the defendant assisted the Deceased in her financial affairs (including the purchase of insurance policies), that the insurance company corresponded with the defendant on behalf of the Estate, and that the Deceased would not have been able to read the nomination form as it was entirely in English.

278.It is certainly extraordinary that there should have been an attempt to nominate a 55-year-old woman as a beneficiary to child education savings plans, in place of the originally named beneficiary, Elvin, a child in education. But I do not think I can make much of this failed attempted re-nomination in my overall consideration, and I put it aside as being of no great weight.

279.Therefore, in relation to the claim arising out of the insurance policies, it succeeds to the extent of $5,873,104.66.

(4)   Angel Dream

280.The plaintiff criticises the defendant's Story as regards the dealings with Angel Dream, and the transfer of funds from the Angel Dream Account to her own account, as unclear.

281.In her second witness statement, the defendant said that in early 2004, the Deceased told her that the Deceased owned Angel Dream, which was used to hold a structured product of about $15 million, which was to be gifted to the defendant. But in cross-examination, the defendant gave differing versions of events. At one point she suggested Amy told her that the Deceased had bought Angel Dream, and that the company had bought a fund. At another point, the defendant said the Deceased told her in early 2004 that the structured product was a gift to her. At another point, the defendant said the Deceased told her in around April or May 2004 that she had bought Angel Dream, and that the fund purchased worth $15 million as well as the company was a gift to her, which is why 2-3 weeks later in May 2004 the Deceased asked her to go with her to DBS to sign documents.

282.The defendant also accepted that she kept the documents of Angel Dream for the Deceased (which can only have been a reference to the Deceased being the owner).

283.In addition to the inconsistencies, the plaintiff relies upon the evasiveness and deliberate concealment by the defendant as regards Angel Dream. The detail of the pre-action correspondence between the defendant and the plaintiff has been set out above, on which basis the plaintiff submits that in the circumstances where the defendant pretended she had nothing to do with Angel Dream, her subsequent story of the gift is simply incredible.

284.I agree. There can be no doubt that the defendant has deliberately sought to withhold documents and information relating to Angel Dream from the plaintiff and from the court. Albeit that the plaintiff made its first enquiry about Angel Dream on 28 November 2006, the defendant simply ignored the requests for information and assistance. In what is obviously a direct reaction to a further request for information in May 2007, the defendant closed the Angel Dream Account that month.

285.Later, the defendant claimed that she could not give any further information in response to the plaintiff's request for relevant documentation in relation to Angel Dream. Plainly, at the time, the defendant would have been able to provide the documents had she wished to do so. Indeed, in her evidence, after initial confusion or obfuscation, the defendant accepted that she had taken steps positively to dispose of the Angel Dream documents. Her assertion that she did so because she felt Angel Dream was not relevant to the plaintiff is patently untrue, as there could by that time have been no misunderstanding that the plaintiff was pursuing these documents as relevant.

286.I also take note of the defendant's instructions to her legal team to oppose the application to amend the claim to include Angel Dream, which opposition was maintained on an unsuccessful appeal. Part of the basis of the opposition to amend was that it would give rise to the necessity to pursue documents from third parties, or perhaps even third-party witnesses – said to arise from the desire to investigate who was the beneficial owner of Angel Dream, and to investigate the purpose of the various deposits and withdrawals into and out of the Angel Dream Account. Yet, against the documentation ultimately obtained by the plaintiff from other sources, the defendant was subsequently forced to confess that she had become the owner of Angel Dream and that she effected the various transfers, indeed by transfer of the sums to her own bank account.

287.I accept the submission made by Mr. Suen that the defendant should have had nothing to hide if she genuinely received the structured product held through Angel Dream as a gift. In fact, such is the nature of this product, and its size relative to the total assets of the Deceased, that there is no readily acceptable explanation as to why the Deceased would have gifted Angel Dream or its assets to the defendant.

288.There was also an apparently inadvertent concession made by the defendant when she accepted that part of her reluctance to disclose the alleged gift of the structured product was because other people would become jealous. Though jealousy can be rationally or irrationally based, that seemed to me to be an acceptance by the defendant that other relatives of the Deceased would see a gift of this magnitude as being wholly out of proportion to, and not properly explicable by, the relationship between the Deceased and the defendant.

289.In my review of the relevant factual circumstances, I have pointed out that of the documents by which the transfer of ownership and control passed from the Deceased to the defendant, the only document which the Deceased appears to have signed was that by which she resigned as director and appointed the defendant in her stead. That act of appointment must have been an assertion of ownership, and there is no other document which evidences the Defendant's intention that she should gift the company or its assets to the defendant.

290.I consider that I am entitled to, and I do take into account, that the transfer arrangements are said to have been dealt with in the presence of Amy. This was one of a number of occasions on which Amy was said to have been involved in relevant transactions, and where the defendant placed reliance upon what she said Amy said, saw or did. The defendant and Amy are clearly in touch with each other; when the solicitors for the plaintiff approached Amy shortly before the trial, Amy immediately passed this information on to the defendant. In these circumstances, I draw an adverse inference from the absence of Amy as a witness, as she might have been expected to have material evidence (on the defendant's case at least) on at least this particular issue relating to Angel Dream – incidentally by reference to an amount which is around a quarter of the total claimed, and obviously of some importance to the defendant. The absence of any evidence from Amy clearly weakens the defendant's case.

291.I also take into account that the transfer of Angel Dream occurred just before the cash gifts and insurance policy gifts made by the Deceased to a number of her relatives including the defendant. As I have pointed out, the benefit received by the defendant by those gifts (not the result of undue influence) identified the defendant being treated in a similar way to other relatives, and at least not hugely out of proportion. But the alleged gift of $15 million at around this time is wholly out of proportion.

292.On the materials, and in light of the almost irresistible inference on the balance of probabilities, I accept that the structural product was transferred by the Deceased to the defendant under undue influence.

293.Mr. Chan SC, however, made a number of technical points about this aspect of the claim. In essence, he submitted that if indeed the funds were withdrawn from the Angel Dream Account under undue influence, it would be the company Angel Dream that would have a claim, and not the shareholders or their estate.

294.I note first that this appears to be a repetition of the arguments rehearsed both at first instance and on appeal in the failed attempt to prevent the amendments to the claim raising the Angel Dream issue.

295.Anyway, on the evidence, there is nothing in this point. First, it seems to me obvious that Angel Dream was a nominee of the Deceased. Just as with the companies in the Yung case, no books of account were kept or financial statements prepared for Angel Dream (and, indeed, if they had been, the defendant would have known of them because she had custody of the relevant documents relating to Angel Dream before she deliberately disposed of them). The Deceased put up all the money for the investment, and where there was no consideration from Angel Dream there would be a resulting trust in favour of the Deceased.

296.Further, the defendant's case that the Deceased also gifted the funds to her must be based on the premise that the Deceased owned those funds.

297.Therefore, I allow this part of the claim in full, in the sum of $16,275,568.23.

298.The plaintiff asks for the defendant to account for the sums withdrawn from the Angel Dream Account, and an enquiry into what assets in the hands of the defendant represent those sums, as well as an account of all sums received by the defendant representing income all proceeds of those sums. I am prepared also to order the relief in that form.

Conclusion

299.I accept that the defendant assisted the Deceased with her day to day care and living arrangements, as well as with her financial affairs, over the last few years of her life. I accept that there would have been genuine motivation on the part of the defendant arising from the family relationship with the Deceased, and that because of her own personal circumstances the defendant was perhaps in a position more easily to provide day-to-day or week-to-week assistance than were some other family members.

300.As a result, as I have found, there is a ready and credible explanation as to why the Deceased might have provided certain financial benefits to the defendant, particularly at the times that she was making provision for her other relatives generally.

301.However, the overall receipt of assets by the defendant is wholly out of proportion to, and not explained by, the nature of the relationship between the defendant and the Deceased. It is also contrary to the clearly held, and expressly stated, intention on the part of the Deceased that the vast majority of her assets should pass on her death to her grandson.

302.In an attempt to get around that difficulty, the defendant had put forward numerous parts of a story which are simply false. In addition to being untruthful, she has been evasive and unco-operative as regards the provision of information and documentation, no doubt because an honest disclosure of that material would have only further demonstrated the untruthfulness of her version of events.

303.Unfortunately, it seems to me that the defendant gradually and with increasing enthusiasm used her undue influence over the Deceased to procure greater assets than otherwise she should or would have received from the Deceased. The defendant's actions, particularly in the final months of the Deceased's life when she became very frail and was hospitalised, and on even the day of the deceased's death, were unattractive.

304.At the end of the day, save in respect of relatively few of the impugned transactions, I consider that the evidence fully justifies the finding on the balance of probabilities that the transactions were procured by the undue influence of the defendant.

305.In the circumstances, the claim succeeds and I grant judgment in favour of the plaintiff with the following relief:

(1)   Judgment in the sum of $40,503,701.63 (being $16,131,133.37 and $160,000 from the Joint Account; $2,063,895.37 from the DBS Account; $5,873,104.66 from insurance policies; and $16,275,586.23 from Angel Dream) .

(2)   An order that the defendant account of the plaintiff for the sums withdrawn from the Joint Account during the period 5 January 2001 to 3 June 2005.

(3)   An inquiry into what assets in the hands of the defendant represent those sums.

(4)   An account of all sums received by the defendant representing income or proceeds of those sums or such assets or any part thereof.

(5)   A declaration that the balance standing in the Joint Account as at 3 June 2005 belongs to the Estate.

(6)   Delivery up by the defendant to the plaintiff of the NTT shares, and the payment by the defendant to the plaintiff of any dividends paid on those shares.

(7)   An order that the defendant account the plaintiff of the sums withdrawn from the Angel Dream Account between 15 January 2004 and 29 May 2007.

(8)   An enquiry into what assets in the hands of the defendant represent those sums.

(9)   An account of all sums received by the defendant representing income or proceeds of those sums.

(10)   Interest on sums payable by the defendant to the plaintiff under this judgment from the date of the writ until judgment at the rate of Hong Kong dollar prime +2%, and thereafter at the judgment rate.

306.Should it be necessary, I grant liberty to apply as to the form of the order.

307.As to costs, there seems to me to be no reason why in principle costs should not follow the event. I order the costs of this action to be paid by the defendant, to be taxed if not agreed. Nevertheless, I am prepared in the first instance to make that a costs order nisi, which will become absolute 14 days after handing down of this judgment unless either party makes an application within that period for variation of the costs order nisi.

308.If any such variation application is made, I will give directions as to dealing with the application by way of written submissions.

Mr Jenkin Suen, instructed by Messrs Deacons, for the Plaintiff

Mr Chan Chi Hung, SC, instructed by Messrs Ma, Tang & Co., for the Defendant