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Chan Oi Kwan v Chan Fu Wing

Judgment Cited authorities 4 Cited in Precedent Map Related
Vincent
JurisdictionHong Kong
Judgment Date10 May 2023
Neutral Citation[2023] HKCA 625
Year2023
Subject MatterCivil Appeal
Judgement NumberCACV194/2022
CourtCourt of Appeal (Hong Kong)
CACV194/2022 CHAN OI KWAN v. CHAN FU WING

CACV 194/2022, [2023] HKCA 625

On Appeal From [2022] HKCFI 941

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 194 OF 2022

(ON APPEAL FROM HCMP NO 2211 OF 2019)

________________________

IN THE MATTER OF the Estate of CHAN YUEN (陳源), deceased
and
IN THE MATTER OF section 33 of the Probate and Administration Ordinance (Cap.10)
and
IN THE MATTER OF Order 85 of the Rules of the High Court (Cap.4A)

_________________

BETWEEN
CHAN OI KWAN (陳愛群), one of the beneficiaries Plaintiff
of the Estate of CHAN YUEN (陳源), deceased
and
CHAN FU WING (陳富榮), the administrator of the Defendant
Estate of CHAN YUEN (陳源), deceased

_________________

Before: Hon Chu VP, Au and Chow JJA in Court
Date of Hearing: 23 March 2023
Date of Judgment: 10 May 2023

_________________

J U D G M E N T

_________________

Hon Chow JA (giving the Judgment of the Court):

INTRODUCTION

1. The following principal issues arise for determination in this appeal against the judgment (“the Judgment”) of Madam Recorder Rachel Lam, SC dated 13 April 2022:

(1) whether an inter vivos transfer of a property by a father to his son in the circumstances of this case constituted an “advancement” within the meaning of s 5(1)(c) of the Intestates’ Estates Ordinance, Cap 73; and

(2) if the answer to (1) is “yes”, whether there was a contrary intention shown that the father did not intend the property to be taken as being paid or settled in or towards satisfaction of the share in his estate which the son would take upon the intestate death of the father.

2. In what follows, unless the context indicates otherwise, references to “section” or “s” shall be to the Intestates’ Estates Ordinance.

BASIC FACTS

3. The late Chan Yuen (“the Deceased”) died intestate at the age of 86 on 13 July 2015 in Hong Kong. His wife (“Madam Lee”) predeceased him in May 2009. The Deceased and Madam Lee had 2 children, namely, the Defendant (elder son) and the Plaintiff (younger daughter). The Defendant and Plaintiff are the only two beneficiaries of the estate of the Deceased. On 6 October 2015, Letters of Administration of the estate of the Deceased were granted to the Defendant.

4. The Deceased used to own 2 properties in Hong Kong, namely, (i) Workshop M on 22/F of Block 1, Kingswin Industrial Building, 32-50 Lei Muk Road, Kwai Chung, New Territories (“the Industrial Property”), and (ii) Flat 4 on 5th Floor of Block B, Shan Shui Court, 200 Tai Tam Road, Hong Kong (“the Tai Tam Road Property”):

(1) The Industrial Property was acquired by the Deceased in 2004 at the price of HK$120,000, and owned by him up to the date of his death. It is currently registered in the name of the Defendant as administrator of the Deceased’s estate.

(2) The Tai Tam Road Property was acquired under the Home Ownership Scheme in 1978 at the price of HK$110,700, and held under joint tenancy by the Deceased and Madam Lee. When Madam Lee passed away in May 2009, the Deceased became the sole owner thereof. On 22 April 2010, the Deceased assigned the Tai Tam Road Property to the Defendant and his wife as joint tenants. On its face, the transfer was done by way of a sale and purchase agreement, the consideration specified in the documents being $1,350,000. There is no dispute that this sum was not actually paid to the Deceased.

5. According to the valuation reports obtained by the Plaintiff in November 2010, the Tai Tam Road Property was worth HK$3.78 million, whereas the Industrial Property was worth HK$1.68 million, as at the date of death of the Deceased (13 July 2015)[1].

6. The Deceased’s estate comprised (i) the Industrial Property, (ii) moneys in 2 bank accounts, in the total sum of about HK$51,000, and (iii) 4,000 shares in HSBC and 6,000 shares in Hang Seng Bank Limited, as set out in the schedule of assets and liabilities attached to the Letters of Administration of the estate of the Deceased, with an estimated total value of HK$3.7 million.

7. The issue in the present case concerns the Deceased’s intention underlying the transfer of the Tai Tam Road Property to the Defendant and his wife in 2010, and the impact that has on the administration of the estate of the Deceased.

8. The Plaintiff’s case is that:

(1) the transfer of the Tai Tam Road Property constituted an “advancement” to the Defendant within the meaning of s 5(1)(c);

(2) the Defendant cannot establish that the Deceased had a contrary intention not to include the Tai Tam Road Property in the hotchpot; and

(3) the Industrial Property should be transferred to her.

9. As summarized by the Judge at §20 of the Judgment, the Plaintiff relies on (inter alia) the following allegations in support of her case:

(1) Her relationship with the Deceased was good. She often took care of him and had dinner with him, whereas the Defendant rarely cared for the Deceased.

(2) In or about 2008, the Deceased began to have dementia or Alzheimer’s disease.

(3) When Madam Lee passed away in 2009, the Deceased was depressed and suffered insomnia. He was not in a good state of mind and required taking care of. She arranged for him to attend a centre for elderly people to provide him with daily meals and activities.

(4) In July of the same year, she took the Deceased to a family trip in Korea. He left the hotel on his own without telling anyone, and seemed confused when he came back to the hotel.

(5) In April 2010, when the Deceased assigned the Tai Tam Road Property to the Defendant and his wife, the Deceased was not in a fit state of mind to do so. At various junctures, the Defendant had taken advantage of the Deceased’s low mood and encouraged him to transfer the Tai Tam Road Property to him and his wife.

(6) In June 2013, during a chat with the Deceased, the Plaintiff learned for the first time that the Deceased had transferred the Tai Tam Road Property to the Defendant. The Deceased told the Plaintiff (in the absence of the Defendant) that since the Tai Tam Road Property had been given to the Defendant, the Industrial Property should be given to the Plaintiff. The Deceased also complained in the same conversation that after Madam Lee passed away the Defendant took away some of her personal belongings such as her jewelry.

(7) After the Deceased passed away, the Defendant applied for a grant of letters of administration of the estate of the Deceased without notifying the Plaintiff, and the same was granted on 6 October 2015.

(8) On 19 February 2016, the Industrial Property was transferred into the name of the Defendant as administrator of the estate of the Deceased.

10. The Defendant denies that s 5(1)(c) has application to the transfer of the Tai Tam Road Property to him and his wife, or that the property should be included in the hotchpot, because the Tai Tam Road Property was intended by the Deceased to be an “ancestral home” (“祖屋”) to be passed down from generation to generation in the male lineage of the family. It was with this understanding that the transfer took place to him and his wife in 2010. Thus, the transfer of the property was not an advancement; and in any event there was a contrary intention expressed by the Deceased to the effect that it should not be included in the hotchpot.

11. In support of his case, the Defendant relies on (inter alia) the following matters (as summarized by the Judge at §22 of the Judgment):

(1) He had a good relationship with the Deceased. He had worked with him in the renovation business all along, and the Deceased had been his mentor. He had assisted in taking care of the Deceased in his later years and ate dinner with him often.

(2) The Deceased’s mental state in 2008 and thereafter, and in particular in 2010, was good; this was generally the case up to around 2014.

(3) When the Deceased transferred the Tai Tam Road Property to him and his wife, the Deceased was aware of and in a right state of mind to understand what he was doing.

(4) By the time the Tai Tam Road Property was transferred to the Defendant and his wife, the Defendant was already in his mid-fifties and living in a flat owned by him with the mortgage fully paid off. He did not need financial support from the Deceased.

(5) After the transfer, the Defendant and his family continued to reside in their own flat, while the Deceased continued to live in the Tai Tam Road Property until his death.

(6) He had never heard from the Deceased about any intention to give the Industrial Property to the Plaintiff; rather, it was the Deceased’s intention that it should be shared equally between himself and the Plaintiff.

12. On 29 November 2019, the Plaintiff commenced the present action by way of Originating Summons (HCMP 2211/2019) against the Defendant seeking, inter alia, (i) an order for the transfer of title, and delivery up of vacant possession, of the Industrial Property to her, and (ii) an order that the Defendant be replaced by the Plaintiff as the administratrix of the estate of the Deceased.

THE JUDGMENT

13. The Plaintiff’s action was tried by the Judge on various dates in November and December 2021. The Judge heard the oral evidence of the Plaintiff and the Defendant, being the only witnesses called by the parties at the trial.

14. On 13 April 2022, the Judge handed down the Judgment.

15. In the Judgment, the Judge made the following material findings relevant for the purpose of the present appeal:

(1) The Plaintiff had failed to establish her various contentions that the...

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