Tan Kok Pooh, The Administrator of the Estate of Tan Su Chin, Deceased and Others v. Leong Foong Yin

Background

The dispute concerns a North Point flat purchased by the late Tan Su Chin in 1983. On 8 April 2004, the Deceased executed a Will and a Deed of Gift on the same day at Messrs S K Wong & Lee. The Deed of Gift assigned the Property to himself and the Defendant, Leong Foong Yin, as joint tenants. The Will bequeathed the Deceased's Hong Kong estate in three equal shares to his three sons from his marriage to Madam Nah. After the Deceased died in 2019, his children from Madam Nah (the Plaintiffs) sought to set aside the Deed of Gift for mistake or non est factum, alleging an "Arrangement" under which D would receive only 50% of the beneficial interest. D counterclaimed for possession, the title deeds, keys, and mesne profits.

Key findings

1. The court held (§99) the Plaintiffs failed to prove the Deceased was mistaken as to the legal character or nature of the Deed of Gift. The alleged Arrangement was unsupported by any contemporaneous document and contradicted the operative terms of the Deed of Gift (§§86-87). 2. The court found (§96) the Deceased must have understood joint tenancy, having acquired two Australian properties as joint tenants in 2000 and 2002, and severed one of those joint tenancies in 2008. He never sought rectification of the Deed of Gift before his death in 2019. 3. The non est factum plea also failed (§100) because it rested on the same factual basis as the mistake claim, which counsel for the Plaintiffs accepted. 4. The court declared (§101) D was the sole surviving owner by right of survivorship. 5. Changing the locks without giving D a new key constituted trespass (§102), and retaining the original title deeds interfered with D's proprietary rights as owner (§104). 6. Mesne profits were assessed from 23 March 2021 (the date of D's first demand letter) at the undisputed market rent, totalling HK$421,200 for year one, with ongoing daily rates thereafter (§110), plus pre-judgment interest at prime plus 1% (§111). 7. Costs were awarded on a party to party basis, not indemnity (§§114-117), as the conduct complained of went to the merits of the claim rather than amounting to ulterior motive or underhand litigation conduct.

Why it matters

This is a useful illustration of how difficult it is to set aside a voluntarily executed gift deed for mistake in Hong Kong, particularly where the donor was a sophisticated businessman with prior experience of joint tenancies. The judgment reinforces (per §45) the need for "very clear and distinct evidence" of a different intention at the time of execution. Practitioners advising on estate planning for elderly clients with multi-jurisdictional assets should note the court's emphasis on contemporaneous documents and the improbability that an experienced businessman with prior joint tenancy experience would misunderstand the effect of a deed properly interpreted in his dialect. The mesne profits analysis also provides a recent application of the prime plus 1% conventional rate for pre-judgment interest on notional rent, building on Ho Kueng (§111).