Leung Mee Kuen and Another v. Leung Siu Kuen Bessie

HCMP 1522/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1522 OF 2012

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JUDGMENT

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Introduction

1.This case, between family members, concerns the ownership of a property at Kin Yuen Mansion, in Caine Road, Hong Kong.  The flat in question will be referred to in this judgement as “Kin Yuen”. It is common ground between the parties that Kin Yuen was purchased using the proceeds of sale of another flat, one at 102 Caine Road (“102 Caine Road”).  102 Caine Road was purchased in April 1994, and was sold in June 2006.  Kin Yuen was purchased in July 2006.

2.The 1^st plaintiff, the 2^nd plaintiff and the defendant are all related.  The 1^st plaintiff and the defendant are sisters; daughters of the 2^nd plaintiff.  Also involved in the relevant transactions, and a witness in the case was one of the brothers in the family, namely Leung Ping Hung (“LPH”).  The other family member to whom reference will be made is the father of the 1^st plaintiff, the defendant and LPH (“the Father”).  For convenience I will refer to the 2^nd plaintiff as “the Mother”.

3.Kin Yuen was registered in the name of the Mother and LPH at the time that it was purchased in 2006.  However, in May 2007 the Mother executed a Deed of Gift (“the Deed of Gift”) by which she purported to transfer her interests in Kin Yuen to the defendant.  The 1^st plaintiff and LPH say that they only became aware of the existence of that Deed of Gift in 2011 (this was disputed by the defendant).  The existence of the Deed of Gift was a concern to the 1^st plaintiff however because, she contends, she was beneficially entitled to Kin Yuen jointly with LPH.  That is the basis for her claim in these proceedings.

The Originating Summons

4.The plaintiffs seek a declaration that the deed of gift is null and void and that it be set aside, with the registration in the Land Registry vacated.  In the alternative a declaration is sought that the half share in the disputed property registered in the name of the defendant is held on trust for the 1^st plaintiff.

The Background

5.To understand how these circumstances have arisen it may be helpful for me to set out a chronology of the principal events.

6.The Father ran a small business, and he enjoyed some success.  In 1985 he was able to purchase a property in Castle Road which was placed in his own name and the names of his three sons.  It appears this may have been considered as an investment, and the property was later sold in 1989.  Not long after the Father purchased a property at Peel Street which was put into the name of the three sons.

7.It seems not to be disputed that this was intended as a gift by the Father to his sons.

8.In March and April 1994 102 Caine Road was purchased and put into the names of the 1^st plaintiff and LPH, as joint tenants.  A mortgage was taken out for this purchase, but this was redeemed on 6 February 1995.

9.In April 1995 the defendant and the Mother became the shareholders and directors in a company called Fairhold, this company being the owner of a property in Hennessy Road. They were not equal shareholders; the defendant held a majority of the shares.

10.In 1996 the defendant married and emigrated to Canada, and in October 1997 the Hennessy Road property was sold.

11.In 1998 the defendant returned to Hong Kong and 2 years later the 1^st plaintiff and the defendant opened a restaurant business which they ran jointly.  As an aside it is worth recording that some of the evidence went into the running of this business, and its financing.  A bank loan was obtained to finance the restaurant business using 102 Caine Road as security for the loan.  This was paid off in January 2003 using funds obtained by the 1^st plaintiff and LPH from a bank.  The defendant appears to have taken no part in the running of the restaurant business after 2002.

12.There seems to be no dispute however that the difficulties of running the restaurant business, although explaining some animosity between the 1^st plaintiff and the defendant, are otherwise irrelevant.

13.In 2002 (according to the 1^st plaintiff), or 2004 (according to the defendant) the defendant returned to Canada to live. 

14.Initially, following its purchase, the 1^st plaintiff and her family lived at 102 Caine Road.  However in about 2004 the Father and the Mother took up residence in that property and 1^st plaintiff and her family moved out.  About one year later, in early 2005, the Father passed away.  Subsequently the Mother went to live with the defendant for a period of some months, in Canada.

15.102 Caine Road was sold in June 2006 and Kin Yuen was purchased in July 2006.  The 1^st plaintiff paid the first deposit for Kin Yuen (using part of the proceeds of sale of 102 Caine Road) on 13^th July 2006. The subsequent payments were made by the 1st plaintiff and, in part, LPH.  In due course Kin Yuen was assigned to Mother and LPH as joint tenants.

16.In April 2007 the defendant returned temporarily to Hong Kong and on 4^th May 2007 the Deed of Gift was executed by the Mother.  The defendant returned to live in Canada, and was visited by the Mother later that year and, again, in 2009.  The defendant says that she returned to Hong Kong in or about the end of 2010 or the early part of 2011.

17.In November 2011, or thereabouts, LPH went to collect title deeds in respect of the Kin Yuen property from a solicitors firm, Joseph S.C. Chan & Co.  That firm had also acted on behalf of the Mother and the defendant in drawing up the Deed of Gift in 2007.  A copy of the Deed of Gift was included in the documents provided to LPH.

18.The 1^st plaintiff and LPH say that they only became aware of the existence of the Deed of Gift in 2011.  The defendant disputes this, contending that they were aware of that transaction at the time that it took place.

19.The Court proceedings commenced in 2012, a letter before action being sent on 13^th March 2012 and the originating summons issued on 20^th July 2012.

The Deed of Gift

20.The Mother signed the contentious Deed of Gift on 4^th May 2007 giving her interest in the Property to the defendant.  Immediately before the execution of the Deed of Gift, the Mother and LPH held the Property as joint tenants.  The Deed of Gift therefore severed that joint tenancy, and transferred the Mother’s interest to the defendant.  On the face of things (and on the Register) Kin Yuen was then owned jointly by LPH and the defendant.

21.The extent of the Mother’s interest in Kin Yuen is in issue however.  It is common ground that she provided none of the purchase money for Kin Yuen.  The defendant says nevertheless that the Mother had a beneficial interest in Kin Yuen, and therefore the Deed of Gift transferred that beneficial interest to the defendant.

The Plaintiff's Case

22.The 1^st plaintiff contends that she agreed with her elder brother, LPH, that they would purchase Kin Yuen as a joint investment, each to contribute one half of the purchase price.  Kin Yuen was purchased using money provided by the 1^st plaintiff and LPH which came from the sale proceeds of 102 Caine Road.  It was also agreed between these siblings that Kin Yuen would be used as a home for the Mother during her lifetime, the Mother having previously lived in 102 Caine Road.

23.The beneficial owners of Kin Yuen were therefore the 1^st plaintiff and LPH. However it is said to have been agreed between the 1^st plaintiff and Mother that the 1^st plaintiff's share of the property would be put into the name of the Mother who would hold the 1^st plaintiff's half share on trust for the 1^st plaintiff.  This arrangement was decided upon, it is said, to give reassurance to the Mother, akin to some security of tenure.

24.Kin Yuen was registered as being owned by the Mother and LPH as joint tenants.  Accordingly, on the demise of the Mother (as and when that should happen) Kin Yuen would be wholly owned by LPH.  The plaintiffs plead however that LPH was, in those circumstances, to transfer a half share in the property back to the 1^st plaintiff.  This arrangement was not recorded in writing.

25.Against that background the plaintiffs contend in the Statement of Claim that the 1^st plaintiff was a 50% beneficial owner of Kin Yuen with the Mother holding the legal title on trust for the 1^st plaintiff.

26.The execution of the Deed of Gift, by purporting to transfer away an interest which was not in fact held by the Mother, was therefore wrongful.  Moreover, it is said, the transfer was made without the knowledge or consent of the 1^st plaintiff.  The 1^st plaintiff contends that the defendant procured the Mother to sign that Deed of Gift in circumstances in which the Mother did not know its legal effect.

27.The relief sought in the Statement of Claim follows the Originating Summons.

The Defendant’s Case

28.The Defendant’s case, in summary, is as follows.  In or about April 1994, the Father purchased 102 Caine Road.  The purchase price was fully paid by the Father (and/or the Mother), but the Defendant and the 1^st plaintiff each owned half of the beneficial interest in 102 Caine Road because it was a gift to the 1^st plaintiff and the defendant.  It was the intention of the Father and/or the Mother that each of their children should have a property or part of property as a gift from their parents.

29.Before the purchase of 102 Caine Road, the three elder brothers of the Defendant had already been given property.  The purchase of 102 Caine Road was intended by the Father and/or the Mother to be a gift to the 1^st plaintiff and the defendant so that all of the children would have property or a share in property.  The 1^st plaintiff was named as one of the assignees.  LPH was named as the other assignee rather than the defendant because, according to the pleaded Defence, this arrangement would facilitate the completion of the formalities and assist with the management of 102 Caine Road since the Defendant was living in Canada, and intended to stay there in the future.

30.LPH therefore had no beneficial interest in 102 Caine Road, but held a moiety of the legal title of the 102 Caine Road as a trustee for the Defendant.  Wrongfully and in breach of the fiduciary owed to the defendant, the 1^st plaintiff and LPH sold 102 Caine Road and purchased Kin Yuen with part of the proceeds.  The defendant contends that the balance of the proceeds amounted to $3.12m, and that this balance was and is held by the 1^st plaintiff.

31.The defence case is therefore that before the sale of 102 Caine Road, the 1^st plaintiff and the defendant each beneficially owned half of that property; with LPH holding the legal title of a half share of 102 Caine Road as a trustee for the Defendant.

32.After the sale 102 Caine Road in 2006, the 1^st plaintiff and the Defendant each were each entitled to half of the beneficial interest in the proceeds of sale.  Since Kin Yuen was purchased with the proceeds of sale of 102 Caine Road, the Defendant owned half of the beneficial interest in the Property. LPH had no beneficial interest in either property.

33.It is however also pleaded by the defendant that, at the time of the purchase of Kin Yuen, it was intended by the 1^st plaintiff and the defendant that the Property would be a gift to the Mother.  Alternatively, it was a common intention of the 1^st plaintiff, the Mother, LPH and the Defendant that the Mother should have the whole of the beneficial interest in Kin Yuen.

34.The Mother was the beneficial owner of the whole of the Property therefore, and the effect of the Deed of Gift has to be understood accordingly.

35.However, if the Mother had no beneficial interest in Kin Yuen, then the 1^st plaintiff and the defendant were beneficial owners of the Property, and LPH and the Mother held the legal title of the Property on trust for the 1^st plaintiff and the defendant.

36.The defendant advances counterclaims by which she seeks declarations and orders against the 1^st plaintiff in regard to the balance of the proceeds of sale of 102 Caine Road, and against both plaintiffs a declaration that she holds the legal title of Kin Yuen as a tenant in common with LPH.

The Issues

37.The defendant takes as starting point the execution of the Deed of Gift, and submits that the primary question is whether there is any evidence to impeach the Deed of Gift, and the record of that interest on the Register.  In an acknowledgement that there is such evidence however the defendant, in common with the plaintiffs, sets out lengthy submissions as to the effects of the evidence on ownership of Kin Yuen.

38.Both counsel are agreed that the initial investigation has to be as to the former ownership of 102 Caine Road.  In particular the question to be asked is whether the defendant had any beneficial interest in that property.

39.If the defendant had such an interest, then the questions revolve around the proceeds of sale.  Were those proceeds impressed with a trust, and did the defendant obtain an interest in Kin Yuen irrespective of the Deed of Gift?   

40.Also at issue is the question whether there was any relevant common intention that the Mother was the recipient of both the legal and beneficial title in a half share of Kin Yuen at the time that her name was registered as a joint owner of the property, or later. 

41.If the Mother did have some beneficial ownership of a share in Kin Yuen, was the Deed of Gift an effective transfer of that beneficial ownership to the defendant?

The Evidence

42.It is, of course, a curious feature of this case that the person who executed the Deed of Gift in favour of the defendant is also one of the plaintiffs seeking a declaration that the Deed of Gift is null and void and should be set aside.  This curiosity was not explored with the second plaintiff at the trial because, although she had served affirmation evidence and, subsequently, a witness statement, she was ultimately unable, through age and ill health to attend and give oral evidence.  Counsel for the plaintiffs, Ms Margaret Chan, made no application for the affirmations or witness statement to be taken as evidence, and accordingly the second plaintiff made no evidential contribution to the proceedings.

43.The contentious transactions (meaning the alleged gifts and the alleged trust arrangements) are all oral, and there is little relevant documentary evidence other than the title documents and the Deed of Gift.  The parties put in evidence various documents relating to the payment of expenses, and the borrowings against the security of the property.  I find these of little assistance in determining the ownership position of any relevant property.  There is no issue as to the actual purchase documents.  The issues centre on what was intended by the parties (and others) when the crucial transactions were made, and therefore the extent to which, if at all, any of the parties had beneficial entitlements.

44.As referred to above there was, unfortunately, no evidence from the Mother, the person most central to the dispute.  She is an elderly lady, and her absence was excused by counsel for the plaintiff with the production of a doctor’s letter.  Keeping in mind that the opinions given in that letter have not been tendered as evidence, and have not been the subject of forensic scrutiny, it seems nevertheless quite likely that because of her age and health, the Mother’s evidence would have been of limited assistance had she been able to attend.

45.The 1^st plaintiff did give evidence on her own behalf, and her brother, LPH, also gave evidence on behalf of the plaintiffs.  The defendant was the only witness for the Defence.

46.Significant parts of the witness statements / affirmations had digressed into matters that were of peripheral relevance at best, and the trial began with an issue over the redaction of certain parts of the evidence relating to a restaurant business operated jointly by the plaintiff and the defendant during part of the material period.  This issue was, helpfully, largely resolved by agreement between counsel, resulting in much irrelevant material being removed from the statements and affirmations.

Ownership of 102 Caine Road

47.102 Caine Road was purchased and assigned to the 1^st plaintiff and LPH in 1994.  The purchase money came from the Father.  Was it, as is the plaintiffs’ case, a gift to the 1^st plaintiff and LPH.  Or was it, as the defendant submits, a gift to the 1^st plaintiff and the defendant?

48.The starting point here is the Register, which state that the property was shared between the 1^st plaintiff and LPH.  However, the defendant states in her evidence that the Father gave 102 Caine Road to her and the 1^st plaintiff by expressly stating that they should each own a half share. 

49.Mr Chai submits that making this flat a gift to the defendant would have been consistent with the pattern whereby the Father gave property to each of his children.  At the time of its purchase the sons had all been given a share in the Peel Street property, but the girls (that is, the 1^st plaintiff and defendant) had not. 

50.This pattern of giving to his children does not seem to have been dependent on the extent to which they had contributed to the family business.  Mr Chai submits that the evidence as to the various property purchases by the Father shows two different approaches by him.  Properties were sometimes purchased with the intention of investment.  It is submitted that the property at Castle Road exemplifies this; it was purchased in the joint names of the Father and the 3 sons, and resold a few years after it was purchased seemingly due to the Father’s financial difficulties.  Mr Chai draws a distinction with the Peel Street property, purchased with part of the proceeds of Castle Road, but purchased in the name of the sons only, and not resold during the Father’s lifetime.

51.This distinction is drawn out by Mr Chai because, of the property in Hennessy Road, which was purchased by the Father.  This was owned by a company, but the shares were allocated to the Mother and the defendant, with the defendant holding the majority of the shares.  That property was subsequently resold during the Father’s lifetime and, therefore according to Mr Chai, is to be considered as a family an investment property, not as a gift to the defendant.

52.102 Caine Road was not resold during the Father’s lifetime and did not have either of the parents’ names registered as part owners, and according to Mr Chai, is therefore to be understood to have been a gift not an investment.

53.One implication of this is said to be that at the time that 102 Caine Road was purchased it was only the sisters, the 1^st plaintiff and the defendant, who did not have property which had been given to them.  In other words, it was likely that the flat at 102 Caine Road was a gift to the sisters.

54.As an alternative argument Mr Chai suggests that whether or not the distinction between investments and gifts is valid, the evidence suggests that the Father intended his children to hold the properties given to them. The 3 brothers owned the Peel Street property, and did so at least up to the Father’s demise.

55.However, the Hennessy Road property was sold during his lifetime.  The defendant therefore did not hold a property other, it is said, than a share in 102 Caine Road. 

56.The contrary argument advanced by Ms Chan is that (in this case) the title documents accurately represent the intended ownership position.  Ms Chan points out that the defendant has failed to explain why, if a gift to the defendant was intended, LPH’s name appears on the title documents.  The pleaded explanation for this was that the defendant was in Canada at the time and it was therefore a matter of administrative convenience for LPH to, so to speak, act on her behalf.  During cross examination however she acknowledged that she was in fact in Hong Kong when the property was purchased.  The defendant gave an unconvincing alternative explanation, namely that she had recently started a new employment and it was not convenient to take time off work to attend solicitors offices and sign documents.

57.To be fair to the defendant her affirmation, made on 28^th February 2013 simply says that her name was not given as an owner of 102 Caine Road because “it was not convenient for me to deal with the formalities at that time”.

58.Ms Chan is critical of the credibility of this evidence, rightly so in my judgment.  A cogent explanation for LPH’s name, and not the the defendant’s name, being on the title documents for 102 Caine Road is needed, it appears to me,  Absence from Hong Kong would seem to provide a possible basis, but preoccupation with a new job, it seems to me, does not.

59.The defendant’s case is otherwise largely based in inference as to what the Father may have intended.  The defendant submits that it would not make sense for LPH to be given a share in another property when he had been given a share in both the Castle Street, and later the Peel Street properties.  However, the evidence was that the Castle Road property was used as the address for the family business.  When sold, the proceeds were used to purchase another property for the business, and to purchase the Peel Street property, shared between the sons.

60.As was explored in cross examination, the defendant appears to have taken no particular interest in the management or control of 102 Caine Road.  Nor does she seem to have reacted adversely upon having heard of its sale without her having been notified.  I accept her evidence that she followed up on what happened to the proceeds of the 102 Caine Road Property in discussions with her mother, and probably with LPH, but it does not seem to me that this is of much assistance to her case.  This was, as Mr Chai describes it, a family matter, and it would be expected that this would come up in conversation especially when the defendant was visiting Hong Kong.

61.In those circumstances, I do not think it can be said that there is an inherent probability that 102 Caine Road could not have been intended to have been, in part, a gift to LPH.  I cannot conclude that there is sufficient evidence to corroborate the defendant’s assertion that 102 Caine Road was, in part, a gift to her.  The defendant carries the burden of proof on this, but her assertion stands alone, unsupported by anything more than inference as to what the Father may have intended when the gift was made.  There is little explanation why the assignment was executed in the way it was if the defendant’s version is correct, and this version is contradicted, by the evidence of the 1^st plaintiff and LPH which I accept on this point, and of course by the terms of the contemporaneous documents relating to the purchase and subsequent sale. 

62.Whether or not there was some apparent unfairness arising out of the seemingly more favourable treatment of LPH (inferred to exist by the defendant) is at the least open to debate in circumstances in which he had taken over the day-to-day running and management of the family business.  The defendant had been given a share of the Hennessy Road property company and realised the proceeds of sale when that was sold. 

63.What cannot be said, in my view, is that the defendant’s case regarding this property is more likely than not, correct.  In my judgment the title documents for 102 Caine Road tell the whole story about the ownership of that property.  I find and hold that the Caine Road Property was owned jointly by the 1^st plaintiff and LPH.

Ownership of Kin Yuen

64.It is common ground that Kin Yuen was a product of part of the sale proceeds from 102 Caine Road.  Prima facie, whoever was entitled to the sales proceeds of 102 Caine Road is entitled to a share in any property purchased using those sale proceeds, unless of course any part of the sales proceeds was given away, before or after the property was purchased.

65.I have concluded above that the 102 Caine Road Property was owned by the 1^st plaintiff and LPH.  In those premises Mr Chai on behalf of the defendant accepts that the defendant had no beneficial interest in the property at the time that it was purchased.  He contends however that, at the time of purchase, there was an intention on the part of the 1^st plaintiff and LPH to make a gift of at least a share of the property to the Mother.  There is direct written evidence that there was such a gift made by way of the (subsequent) Deed of Gift.  The question for the Court is whether that deed affects or reflects the true position in regard to the ownership of Kin Yuen.

66.As a starting point, Ms Chan, on behalf of the plaintiffs submits that, where a property is purchased in the name of one but with the money of another, absent evidence of actual intention, then the available admissible evidence must be looked at objectively to determine the intention.  Ms Chan submits, in effect, that a degree of common-sense has to be applied in undertaking this exercise, and she refers me to a judgment by Mr Recorder H Wong, SC in Suen Shu Tai v. Tam Fung Tai, (unreported, HCA 1466/2010, 15 August 2013) in which the learned Recorder said (starting at para 57):

“Where A transferred or assigned to B property without receiving consideration therefor, the natural question – in most cases the single most important question – to ask, if subsequent dispute arises as to the transfer or assignment, is: “Why did A put the property in B’s name, instead of holding it himself?” The answer to the question will often provide an immediate answer to the legal question, namely, the intention of A in making the transfer or assignment.

People making transfers of properties, particularly when they are laymen, will often not be alluded to concepts of legal title and beneficial title.  They do not think in such terms. Often it is not real, and not practical, to seek to ask the legal question directly: “Did A intend to transfer the beneficial interest in the property to B, or did he intend to retain the beneficial interest for himself, and merely intend to transfer the legal title to B?” Put in such legal form, the answer to the question posed is often unproductive: questions of beneficial and legal interest, a dichotomy of concepts entrenched in the common law but not necessarily well known to laymen (particularly Chinese laymen), may never occur to the mind of many transferors.  Accordingly, in many cases the more practical question to ask is the one I mentioned above.  I hasten to add that I am not suggesting that this “more practical question” is to replace the ultimate legal question (i.e. whether the intention is to transfer beneficial title or only the legal title).  What I am saying is that the answer to this more practical question will often lead immediately to the answer to the ultimate legal question, without getting bogged down with difficulties such as that of wondering whether a transferor has ever applied his mind to the question of the passing of beneficial title.”

67.I believe that this approach is almost tailor made for the circumstances of this dispute.  The parties here were not unfamiliar with the buying and selling of property, but I do not think for a moment that they gave any thought to questions as to legal or beneficial entitlement.  Answers to the questions “why did the 1^st plaintiff put a share of the Kin Yuen in the Mother’s name, instead of holding it herself?  Was it intended to be a gift to the Mother?” have been provided by the 1^st plaintiff, and LPH, in the evidence.  In my judgment it is a credible explanation.

68.Their answer is that the Mother was seeking reassurance, when she was asked to leave her residence in 102 Caine Road following her husband’s death that she would have a home to live in through her later years.  Naming her on the title documents was a way that the 1^st Plaintiff and LPH could give her that reassurance in a tangible form.

69.The defendant accepts that this may have served to convey a message to Mother that although she did not “own” a share in the Kin Yuen, the 1^st plaintiff and LPH could not sell the property without the Mother’s consent.  However this action is said to be more consistent with the defendant’s case that the Kin Yuen Property (or a share in it) was intended to be a gift to the Mother.  Given the circumstances, it is submitted that it is more likely that not that the 1^st plaintiff and LPH intended the property to be a gift to the Mother, and that the Mother understood it as a gift to her.  The Mother must have understood that she had (in effect) both a legal and a beneficial interest in the property in order to consider that she was capable of transferring the same to the defendant.

70.As was pointed out on behalf of the defendant, the Mother could have been given some sense of security in relation to Kin Yuen had her name been added to the names of the 1^st plaintiff and LPH rather than by way of substitution for the 1^st plaintiff.  Questions were asked in the course of the cross examination on this.  Through this it emerged that the 1^st plaintiff and LPH had used the proceeds of sale of 102 Caine Road to purchase two properties; one being the Kin Yuen property that is the subject of the action, and the other being another flat in the same building.  One of these was registered in the names of LPH and the Mother, and the other was registered in the 1^st plaintiff’s name.  Both the 1^st plaintiff and LPH stated independently that this arrangement had been chosen to avoid the attentions of the tax authorities.

71.Mr Chai submits that this passage of evidence as given by the 1^st plaintiff was given evasively, and is not to be accepted.  The suggestions of potential investigation by IRD and the professed concerns about the amount of tax to be paid are improbable, and do not explain why LPH but not the 1^st plaintiff appears on the title of Kin Yuen.  The more obvious reason for not including the 1^st plaintiff’s name was that the 1^st plaintiff was not an owner, it is said.

72.I do not agree that the witnesses were evasive.  It may be that the views of the 1^st plaintiff and LPH as to the tax exposure, and the way in which it should be addressed (or avoided) were wide of the mark, but that does not mean that the steps they took were motivated by other considerations.  I accept that they were motivated, as they say, by concerns about their potential tax position. 

73.The Mother did visit lawyers and execute a document purporting to give “her share” of Kin Yuen to the defendant.  I do not think however that much, if any, reliance can be placed on this as evidence of the true position as to ownership.  The Mother not only purported to give her ‘share’ of Kin Yuen to the defendant but has sought, through these proceedings, to have that transaction set aside on the basis of undue influence having been exerted on her.  Were the facts different this might seem, at the least, duplicitous.  The Mother is, however, an old lady who has, so far as can be inferred, limited legal knowledge.  The evidence suggests to me that she is herself unclear as to what the legal implications of her name having been placed on the title deeds may be.

74.The funds for the purchase of Kin Yuen belonged to the 1^st plaintiff and LPH.  There is no evidence to support the defendant’s suggestion that Kin Yuen was intended to be a gift to the Mother when it was bought.  There nothing to show that the defendant had an interest in Kin Yuen prior to the Deed of Gift.  She had no interest in 102 Caine Road and was not aware of the purchase of Kin Yuen until some time after it had been purchased.  The Mother making the Deed of Gift, and being asked to make the Deed of Gift, is itself suggestive that there had been no clear gift to the defendant especially in circumstances in which, (as appears to be common ground), the 1^st plaintiff and LPH were not involved.

75.Nor do I think that the 1^st plaintiff and LPH gave an interest in Kin Yuen to the Mother. This seems inherently unlikely given her age, and I accept their explanation as to why the Mother’s name was used in the title documents. In the circumstances I cannot accept that the Mother had an interest in Kin Yuen capable of being the subject of the Deed of Gift.

Conclusions

76.The conclusions I have reached are, firstly, that the defendant had no interest in the ownership of 102 Caine Road.  There was no relevant common intention that the Mother was to be the recipient of a legal and beneficial interest in Kin Yuen at the time that her name was registered as a joint owner of the property, or at any time. 

77.It follows that the Mother having no beneficial ownership in Kin Yuen, the Deed of Gift was ineffective to transfer a beneficial interest to the defendant.

78.Before concluding this judgment I wish to record the fact that the parties attempted to settle their disputes at the start of the hearing, but without success.  I have no knowledge as to why no agreement could be reached, and do not speculate.  However, in circumstances in which, as it seems to me, the parents have attempted to improve the overall family fortunes by property investment it seems to me that all parties have lost out as a result of that failure.

Orders

79.As appears from the above the plaintiffs succeed in their claims and the defendant does not. Accordingly I will make declarations and orders in line with paragraphs (1) and (2) of the prayer for relief in the Statement of Claim.  I will hear the parties as to the form of these Orders if necessary.

80.The defendant’s counterclaim is dismissed.

81.As far as costs are concerned, the plaintiffs have succeeded in the claim, and are entitled to their costs, to be taxed if not agreed.

Ms Margaret Chan, instructed by K M Tang & Co, for the 1^st and 2^nd plaintiffs

Mr Michael Chai, instructed by Cham & Co, for the defendant