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Chinachem Charitable Foundation Ltd v The Secretary For Justice & Others

Judgment Cited authorities 33 Cited in Precedent Map Related
Vincent
Judgment Date18 May 2015
Year2015
Citation(2015) 18 HKCFAR 169
Judgement NumberFACV9/2014
Subject MatterFinal Appeal (Civil)
CourtCourt of Final Appeal (Hong Kong)
FACV9/2014 CHINACHEM CHARITABLE FOUNDATION LTD v. THE SECRETARY FOR JUSTICE & OTHERS

FACV 9/2014

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 9 OF 2014 (CIVIL)

(ON APPEAL FROM CACV NO. 44 OF 2013)

________________________

IN THE MATTER OF the Will dated 28 July 2002 of KUNG, NINA (龔如心) also known as NINA KUNG and NINA T H WANG, late of Top Floor, Chinachem Golden Plaza, 77 Mody Road, Tsimshatsui East, Kowloon, Hong Kong, Widow, Deceased

________________________

BETWEEN

THE SECRETARY FOR JUSTICE
 Plaintiff
(1st Respondent)
and
(1) JOSEPH LO KIN CHING and DEREK LAI KAR YAN, THE JOINT AND SEVERAL ADMINISTRATORS OF THE ESTATE OF KUNG, NINA (龔如心) also known as NINA KUNG and NINA T H Wang 1st Defendant
(2nd Respondent)
(2) CHINACHEM CHARITABLE FOUNDATION LIMITED
(華懋慈善基金有限公司) 		2nd Defendant
(Appellant)
(3) 施福英，THE NATURAL MOTHER OF THE DECEASED 3rd Defendant
(3rd Respondent)

AND

BETWEEN

THE SECRETARY FOR JUSTICE
 Plaintiff
(1st Respondent)
and
(1) JOSEPH LO KIN CHING, DEREK LAI KAR YAN, LAM HOK CHUNG RAINIER and JONG YAT KIT, THE JOINT AND SEVERAL ADMINISTRATORS OF THE ESTATE OF KUNG, NINA (龔如心) also known as NINA KUNG and NINA T H Wang 1st Defendant
(2nd Respondent)
(2) CHINACHEM CHARITABLE FOUNDATION LIMITED
(華懋慈善基金有限公司) 		2nd Defendant(Appellant)
(3) 施福英，THE NATURAL MOTHER OF THE DECEASED 3rd Defendant
(3rd Respondent)
(By original originating summons and order to carry on)

AND

BETWEEN

THE SECRETARY FOR JUSTICE
 Plaintiff
(1st Respondent)
and
(1) LAM HOK CHUNG RAINIER, JONG YAT KIT and YU SAI HUNG, THE JOINT AND SEVERAL ADMINISTRATORS OF THE ESTATE OF KUNG, NINA (龔如心) also known as NINA KUNG and NINA T H Wang 1st Defendant
(2nd Respondent)
(2) CHINACHEM CHARITABLE FOUNDATION LIMITED
(華懋慈善基金有限公司) 		2nd Defendant
(Appellant)
(3) 施福英，THE NATURAL MOTHER OF THE DECEASED 3rd Defendant
(3rd Respondent)
(By original originating summons and order to carry on)

AND

BETWEEN

THE SECRETARY FOR JUSTICE
 Plaintiff
(1st Respondent)
and
(1) CHAN WAI TONG CHRISTOPHER, WONG TAK WAI and JONG YAT KIT, THE JOINT AND SEVERAL ADMINISTRATORS OF THE ESTATE OF KUNG, NINA (龔如心) also known as NINA KUNG and NINA T H Wang 1st Defendant
(2nd Respondent)
(2) CHINACHEM CHARITABLE FOUNDATION LIMITED
(華懋慈善基金有限公司) 		2nd Defendant
(Appellant)
(3) 施福英，THE NATURAL MOTHER OF THE DECEASED 3rd Defendant
(3rd Respondent)

(By original originating summons and order to carry on)

________________________

Before : Chief Justice Ma, Mr Justice Ribeiro PJ,Mr Justice Fok PJ, Mr Justice Chan NPJ,
Lord Walker of Gestingthorpe NPJ
Dates of Hearing: 21-23 April 2015
Date of Judgment : 18 May 2015

__________________

JUDGMENT
__________________

Chief Justice Ma:

1. I agree with the judgment of Lord Walker of Gestingthorpe NPJ and with the orders contained in para 79 below.

Mr Justice Ribeiro PJ:

2. I agree with the judgment of Lord Walker of Gestingthorpe NPJ.

Mr Justice Fok PJ:

3. I agree with the judgment of Lord Walker of Gestingthorpe NPJ.

Mr Justice Chan NPJ:

4. I agree with the judgment of Lord Walker of Gestingthorpe NPJ.

Lord Walker of Gestingthorpe NPJ:

Introduction

5. This appeal is the last stage, or almost the last stage, in protracted and contentious litigation concerned with the will of Nina Wang (who is referred to in this judgment, as she was in the judgments below, as Nina). At her death in 2007 Nina owned the Chinachem Group of companies, valued in 2012 at over HK$ 82 billion. She was reputed to be the richest woman in Asia. She left a will written in the Chinese language and dated 28 July 2002. It was what is sometimes called a homemade will - that is, made without professional advice from a lawyer. She was assisted in making it by her sister, Kung Yan Sum (“Mrs Tong”). The will named Chinachem Charitable Foundation Limited (“the Foundation”) as the principal beneficiary, but difficult and technical legal issues have arisen as to the meaning and legal effect of her will.

6. These questions of construction were not however raised in legal proceedings until 2012, when the present proceedings were commenced by an originating summons issued by the Secretary for Justice. One of the functions of the Secretary for Justice is to protect the interests of charities. Charities are a matter of general public concern because their essential characteristic is that they are for the public benefit, or the common good.

7. This delay of five years was unavoidable because there were contentious probate proceedings raising the prior issue of whether Nina’s 2002 will was indeed her last will. In those proceedings (HCAP 8/2007), commenced soon after Nina’s death, it was contended that her 2002 will had been superseded by another will allegedly made by her in 2006. On 2 February 2010 Lam J (as he then was) pronounced in solemn form for the 2002 will. The Court of Appeal dismissed an appeal on 14 February 2011 and on 24 October 2011 this Court refused leave for a further appeal.

8. Nina’s will did not contain any appointment of executors. Homemade wills seldom do. On 26 March 2012 Joseph Lo Kin Ching and Derek Lai Kar Yan were appointed as interim administrators of her estate. They were joined as the first defendant to the originating summons issued by the Secretary for Justice. The summons was amended twice following changes in the administrators and the present administrators, Chan Wai Tong Christopher, Wong Tak Wai and Jong Yat Kit are the second respondent to this appeal. The administrators have adopted a neutral position throughout the litigation.

9. The Foundation was the second defendant to the summons, and is the appellant in this Court, the Secretary for Justice being the first respondent to the appeal. The third defendant to the summons, and the third respondent to the appeal, is Nina’s very elderly mother, who would be entitled to any part of Nina’s estate as to which she died intestate. Nina’s mother entered an appearance in the proceedings but has taken no further part in them.

10. The agreed English translation of Nina’s will is set out in full in paragraph 25 below. After introductory words it contained four clauses. Clause 1 contained a gift of Nina’s property to the Foundation. Clause 2 contained provisions about the appointment of a managing organisation to supervise the Foundation, and about the funding of “a Chinese prize of worldwide significance similar to that of the Nobel Prize”. Clause 3 related to the Foundation’s management of the Chinachem Group. Clause 4 contained provisions about the Foundation providing support for members of the family of Nina’s late husband Teddy Wang (“Teddy”), and staff of the Chinachem Group and their children.

11. The principal issue in the proceedings, raised by paragraph 1 of the originating summons, is whether Nina’s net residuary estate is held by her administrators

“in trust for –

(a) the Foundation absolutely, or

(b) the Foundation on terms that the Foundation holds the same in trust to give effect to all (or some) of the directions in clauses 2, 3 and 4 of the Will; or

(c) some other person or persons and, if so, whom.”

The third possibility – which might have been spelled out as devolution on intestacy – has not been adopted by any of the parties. Nina’s mother has, as already mentioned, taken no active part in the proceedings. It seems that the question was included in the originating summons because clause 4 appears to contain some sort of beneficial disposition (it is appropriate to put it in general terms in this introduction) of an unquantified part of the estate for purposes that are not charitable in the legal sense. It is settled law that the purposes of a trust must be wholly charitable if it is to be a valid charitable trust, with the well-known case of the will of Caleb Diplock (see Chichester Diocesan Fund v Simpson [1944] AC 341) as a stern warning of the possible consequences of infringing this principle. The Secretary for Justice and the Foundation are united in wishing to uphold the validity of the will, and their counsel’s submissions on clause 4 have been carefully crafted so as, one way or another, to avoid any possible intestacy.

12. What divides the Secretary for Justice and the Foundation is whether the question in paragraph 1 of the originating summons is to be answered in terms of subparagraph (a) (“for the Foundation absolutely”) or subparagraph (b) (under which the Foundation would hold as a trustee and be obliged to give effect to all or some of the directions in clauses 2, 3 and 4). Most non-lawyers, and indeed many lawyers, may find it hard to understand the intensity of the arguments on this abstract and technical issue. It is common ground that the Foundation is a company with exclusively charitable objects, recognised since its incorporation in 1988 as exempt from tax under section 88 of the Inland Revenue Ordinance, Cap 112. Its charitable objects are not narrowly restricted, but are expressed in wide terms. The whole of its capital and income, after expenses, must be used for its charitable objects, and in the event of winding-up its surplus assets would be devoted to charity. Whether these obligations arise within the framework of company law, and under the Foundation’s memorandum of association, or within the framework of trust law, with Nina’s will as the trust instrument, may seem little more than a technicality. But the issue has been argued at length in elaborate and erudite written and oral submissions, first...

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