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Ku Kwok Ying (古國英) In His Personal Capacity And In His Capacity As One Of The Administrators Of The Estate v Ku Kwok Ming (古國明) In His Personal Capacity And In His Capacity As One Of The Administrators Of The Estate And Others

Judgment Cited authorities 3 Cited in Precedent Map Related
Vincent
Judgment Date01 December 2020
Neutral Citation[2020] HKCFI 3023
Year2020
Judgement NumberHCMP1698/2019
Subject MatterMiscellaneous Proceedings
CourtCourt of First Instance (Hong Kong)
HCMP1698/2019 KU KWOK YING (古國英) in his personal Capacity and in his capacity as one of the Administrators of the Estate v. KU KWOK MING (古國明) in his personal capacity and in his capacity as one of the Administrators of the Estate AND OTHERS

HCMP 1698/2019

[2020] HKCFI 3023

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1698 OF 2019

_______________________

IN THE MATTER of the Estate of the Mdm. Koo Bor Nui (古波女), dec’d, late of Room 62, Fook Yat House, Fortune Estate, Cheung Sha Wan, Kowloon, Hong Kong (“the Estate”)

and
IN THE MATTER of the last Will of Mdm. Koo Bor Nui (古波女) dated 27 October 2005

and
IN THE MATTER of Order 85 Rule 2 of the Rules of the High Court, Cap. 4

and
IN THE MATTER of the 6th Floor, No. 1 Kiu Yam Street, Kowloon

______________________

BETWEEN
KU KWOK YING (古國英) in his personal Plaintiff
Capacity and in his capacity as one of the
Administrators of the Estate

and
KU KWOK MING (古國明) in his personal 1st Defendant
capacity and in his capacity as one of the
Administrators of the Estate
GU GUOXIONG (古國雄) 2nd Defendant
GU JINLING (古錦玲) 3rd Defendant
GU GUONENG (古國能) 4th Defendant
______________________
Before: Deputy High Court Judge MK Liu in Court
Date of Hearing: 1 December 2020
Date of Judgment: 1 December 2020

________________________

JUDGMENT

________________________

1. In these proceedings, the plaintiff (“P”) is seeking a determination from the court on the following questions pursuant to Order 85 rule 8:

(1) whether or not the gift of the Property under the last will (“the Will”) of Madam Koo Bor Bui (古波女) (“KBN”) dated 27 October 2005, ie 6th Floor, No. 1 Kiu Yam Street, Kowloon, had been adeemed by reason of the sale and purchase agreement dated 31 August 2013 (“the SPA”) entered into by KBN and the Urban Renewal Authority (“the URA”) in respect of the Property (“Question 1”); and

(2) whether or not the Property has fallen into the residuary estate of KBN (“Question 2”).

2. KBN was never married and did not have any child. P and the 1st defendant (“D1”) are the 2 administrators of KBN’s estate. P, D1 and the other defendants are all the siblings of KBN. In respect of the 2 questions before the court, P’s position is that the answers to both questions should be “Yes”, while D1 is of the view that the answers to the 2 questions should be “No”. The other parties to these proceedings have not made any submission on the 2 questions.

The facts

3. The Will is a homemade will. In the Will, it is stated:

“(一) 我所居住之所, 位於九龍橋蔭街壹號七樓給四弟古國明。因我數年來身體欠佳，不能工作，所有生活費都由他付，故我所居住之處全送給四弟古國明。

(二) 番禺市僑三樓單位亦是送給古國明。我最親兄弟姊妹不得反對，此為我的希望，希望你們體諒我的心意。”

4. Apart from the Property and the property in Panyu, no other asset has been dealt with in the Will.

5. Both P and D1 agree that the address九龍橋蔭街壹號七樓in the Will in fact is referring to the Property. In Hong Kong, it is quite common that the reference in the Chinese language to the storey-level of a flat would be one number greater than the floor number in the address in English.

6. These proceedings only concern the Property, and does not concern the property in Panyu.

7. In or around 2013, the URA implemented a redevelopment project, and the Property was located within the area designated for redevelopment.

8. On 31 August 2013, KBN entered into the SPA with the URA, by which KBN agreed to sell the Property to the URA at HK$2,466,000.

9. In the SPA, it is provided:

(1) Clause 31.01 stipulates that the SPA is subject to the fulfilment of 2 conditions precedent (“the 2 Conditions”):

(a) On or before 5:00 pm of 10 September 2013, the URA must have collected binding agreements from owners of not less than 80% of the undivided shares of the land in question.

(b) On or before 26 June 2014, the Secretary for Development must have granted authorization to the URA to proceed with the redevelopment project.

(2) Clause 31.02 states that the “Fulfilment Date” shall be the latter date of fulfilment of the 2 Conditions.

(3) Clause 31.04 states that in the event either of the 2 Conditions could not be satisfied within the time stipulated, the URA shall not proceed with the redevelopment project and would within 7 business days of failure to fulfil either of the 2 Conditions, notify KBN by written notice.

10. Subsequently, by the URA’s solicitors’ letter dated 6 January 2014, the URA’s solicitors informed KBN that the 2 Conditions were met and that the Fulfilment Date was 23 December 2013.

11. On 9 January 2014, the URA made deposit payment (HK$246,600) and part-payment (HK$1,351,680) pursuant to the SPA.

12. On 14 January 2014, KBN and the URA entered into a Supplemental Sale and Purchase Agreement (“the SSPA”), by which the purchase price was adjusted upwards to HK$2,547,000.

13. Originally, the sale and purchase should be completed on 6 February 2014. The URA on 6 February 2014 sent 3 cheques totalling HK$2,286,793.52, being the balance of the purchase price and other allowances to KBN’s solicitors, against the undertaking from that firm that they would provide the URA within 7 working days an assignment of the Property duly executed by KBN.

14. However, KBN was not in a position to execute any assignment. She was gravely ill at that time. She passed away on 12 February 2014, 6 days after the originally scheduled completion date.

15. The URA was willing and agreed to postpone the completion for 6 months twice, ie to 6 February 2015. However, by 6 February 2015, grant of representation of KBN’s estate had not been made by the Probate Registry.

16. On 4 March 2015, after the expiration of the postponed completion date, the URA issued a notice to accept the repudiation of the SPA by reason of KBN’s (or her estate’s) default in completion of the transaction.

17. On 6 March 2015, the land on which the Property was built upon was resumed by and reverted to the Government and the building was in due course demolished.

18. On 6 June 2015, compensation money arising from the resumption of the Property (“the compensation money”) was paid by the Government to KBN’s estate.

19. On 17 November 2017, the deposit and the part payment earlier paid to KBN under the SPA were returned to the URA.

20. On 24 October 2017, Letters of Administration with the Will annexed thereto was finally granted to P and D1.

P’s submissions

21. The following principles have to be borne in mind:

(1) Ademption means the “loss” or “withdrawal” of a specific gift or devise in a will[1].

(2) “The general rule is that the subject-matter of a specific legacy must, at the testator’s death, remain within his estate: where there is a change in the thing bequeathed, ademption will follow unless it can be shown that the thing is changed in name or form only and remains in substance the same. It is a question of fact whether the change has effected a change of substance or merely a change of name or form. For instance, if the legacy is of a specified chattel in possession, as of a gold chain, or a bale of wool, or a piece of cloth, the legacy is adeemed, not only by the testator’s selling or otherwise disposing of the subject in his lifetime, but also if he changes its form so as to alter the specification of it. Thus, if he converts the gold chain into a cup, or the wool into cloth, or makes the piece of cloth into a garment, the legacy is adeemed. Conversely, where there was a bequest of the balance of deposit account in a bank and the money was transferred to another account to secure a higher rate of interest the bequest was held not to be adeemed. There is no distinction between personal and real property. If, after making the will, and devising specific realty to A, the testator sells the realty, there is ademption, and A will receive nothing.”[2] (Emphasis added)

(3) “If T by his will makes a specific gift of his farm Blackacre to D, and T later enters into a binding contract to sell Blackacre to P, but T dies before completion, this adeems the specific gift to D and D is not entitled to the purchase price payable by P.”[3]

(4) The rule of ademption operates independently of the testator’s intention[4]. “The only rule to be adhered to is to see whether the subject of the specific bequest remained identifiable in itself at the time of the testator’s death; for if it did not, then there must be an end of the bequest: and the idea of discussing what were the particular motives and intention of the testator in each case, in destroying the subject of the bequest, would be productive of endless uncertainty and confusion”[5] (Emphasis added)

22. Mr Paul Leung, counsel for P, submits that by entering into the SPA with the URA on 31 August 2013, ie at a time about 8 years after the making of the Will, the specific legacy of the Property to D1 in the Will was adeemed. P submits that although the SPA was subject to the 2 Conditions, the 2 Conditions were fulfilled before the death of KBN. The SPA (as amended by the SSPA) was a specifically enforceable contract. By that contract, the nature of the Property had been fundamentally changed, and the specific devise of the Property was no longer identifiable at the time of the death of KBN on 12 February 2014.

23. Mr Leung relies upon the following authorities in support of his contention:

(1) In Re Sweeting (deceased), Nicholls J said[6]:

“It is common ground that ademption of a specific gift of property is brought about where a contract of sale of that property is entered into by the...

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