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Lily Cheung And Another v The Standard Chartered Bank Hong Kong Trustee Ltd And Others

Judgment Cited authorities 13 Cited in Precedent Map Related
Vincent
Judgment Date28 February 1990
Year1990
Judgement NumberHCA5464/1987
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCA005464/1987 LILY CHEUNG AND ANOTHER v. THE STANDARD CHARTERED BANK HONG KONG TRUSTEE LTD AND OTHERS

HCA005464/1987

1987, No. A5464

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

BETWEEN

LILY CHEUNG First Plaintiff
PAN TSU MIN suing by the First Plaintiff his mother and next friend Second Plaintiff

AND
THE STANDARD CHARTERED BANK HONG KONG TRUSTEE LIMITED executor of the will of Jimmy Chao Ming Pan, deceased First Defendant
GORDON PAN otherwise known as GORDON V. MING PAN Second Defendant

Coram: Deputy High Court Judge J.K. Findlay, Q.C.

Dates of hearing: 27 to 30 November, l, 5 to 8, 11 to 14, 18 to 20 December 1989, 5, 8 to 12, 15 to 19, 22 to 24 January 1990, 2, 5 to 9, 12 to 16 February 1990

Date of handing down of judgment: 28 February 1990

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JUDGMENT

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The Parties.

1. Jimmy Chao Ming Pan ('the deceased') was an able and successful businessman. He died on 26 February 1984. The first defendant ('the trustee') is his executor and trustee. The second defendant is his son by a marriage to Mrs Marian Pan. Marian Pan died on 26 May 1977.

2. The first plaintiff alleges that she was, at the time of his death, the deceased's wife, and the second plaintiff is their son. The second plaintiff's status as the deceased's son was not seriously disputed at the trial, but the defendants contest that the first plaintiff was the lawful wife of the deceased.

3. There was a dispute regarding the entitlement of the plaintiffs to share in the deceased's estate, but this was settled under a consent order made by this court, dated 22 June 1987, in terms of which the plaintiffs were, together, to receive 40% of the assets of the estate, except certain immovable property, which was to be dealt with differently.

The Central Dispute.

4. Paragraph 6 of the Statement of Claim says that -

'At all material times prior to the death of the deceased, the deceased maintained the following securities accounts ...

(1) Securities account with Messrs Mok Ying Kie under the name of '[the deceased] ... anal/or [the second defendant]' ... ; and

(2) Securities account with the Hongkong and Shanghai Banking Corporation in the joint name of '[the deceased] ... and [the second defendant] ... .'

5. I will call the first mentioned account 'the Mok 1 account' (because a Mok 2 account comes into the picture later), and the second, 'the HSBC account'. The central dispute in this action, as between the plaintiffs and the second defendant, concerns the assets in these accounts. Broadly, the plaintiffs say that these assets form part of the estate o￡ the deceased, whereas the second defendant says they belong to him. The trustee allowed the second defendant to have the assets because, it maintains, he was entitled to them. The plaintiffs say that the trustee should have recovered the assets for the estate, and that it committed other acts of maladministration.

The Plaintiffs' Allegations against the Second Defendant.

6. I will deal firstly with the plaintiffs' case against the second defendant because, to some extent, at least, and entirely according to the trustee, the plaintiffs' case against the trustee depends on my findings as to the second defendant's entitlement to the assets.

7. I have already set out the plaintiffs' allegations regarding the description of the Mok and HSBC accounts.

8. Paragraph 7 of the Statement of Claim goes on to say -

'The stocks and shares comprised in the two securities accounts were, prior to the death of the deceased, purchased entirely or to a large extent by monies provided by the deceased ("the deceased's contribution"). The 2nd Defendant accordingly had no beneficial interest in the two securities accounts or only such beneficial interest as might be represented by such proportion of purchase monies (if any) contributed by the 2nd Defendant. Therefor [sic] the latter held the assets to the two securities accounts on a resulting or constructive trust for the estate in entirety alternatively to the extent of the deceased's contribution.'

9. Paragraphs 8 of the Statement of Claim alleges that 'Upon the death of the deceased, the entirety or a substantial part of the stocks and shares thereby fell to become part of the estate.'.

10. Paragraphs 9 and 10 allege that, after the death, the second defendant 'wrongfully and in breach of the said trust' dealt with the stocks and shares and converted them to his own use.

11. Paragraph 15 alleges that 'By reason of the matters pleaded in paragraphs 9, 10 ... herein, the estate has suffered loss and damage.'.

12. That is the substance of the plaintiffs' case against the second defendant.

The Second Defendant's Answer.

13. In answer to these allegations, the second defendant says that, up to May 1977, the deceased and Mr Marian Pan maintained a joint share trading account with Messrs Mok Ying Kie, share brokers, in the name of 'Mr Jimmy C.M. Pan and Mrs Marian Lee Pan'. In about May 1977, he says, the deceased, with the consent and approval of Mrs Marian Pan and the second defendant, instructed Mok to convert the account into a joint account with the second defendant in the name of 'Mr Jimmy C.M. Pan and/or Mr Gordon V. Ming Pan, Hong Kong'. Mok did so, and thereafter, until the death of the deceased, the deceased and the second defendant maintained the Mok I account jointly.

14. After the conversion of the Mok 1 account in this way, the second defendant says that he had control and enjoyment of the account and was entitled to draw freely from and operate it. Between the date of the conversion and the death, he says he made substantial cash contributions to the Mok 1 account.

15. On or about 5 March 1982, the deceased established a personal account with Mok through which the deceased traded shares personally. This is the account I will refer to as 'the Mok 2 account'.

16. The defendant says 'Further or alternatively, insofar as may be necessary, the 2nd Defendant will [rely] on the presumption of advancement.'.

17. He also says 'Further or in the further alternative, by reason of the matters aforesaid, upon the death of the Deceased, all credit balances and/or shares and/or other valuable securities and/or properties of whatever nature or kind standing to the credit of (the Mok 1 account] accrued beneficially to the 2nd Defendant and did not form part of the estate.'. In fact, at the date of the death of the deceased, there was no money credit balance in the Mok 1 account, but Mok was, at that time, holding a considerable quantity of valuable shares.

18. The second defendant says that, in March 1980, he and the deceased jointly opened three accounts with the Hong Kong and Shanghai Banking Corporation, all in the name of 'Jimmy Fan Chao Ming and/or Gordon Pan V. Ming'. One was a current account, one a safe custody account and the third a joint securities account. It has emerged that the safe custody account and the joint securities are one and the same account, which I have referred to as the HSBC account.

19. With regard to these accounts, the second defendant pleads a bank mandate signed by himself and the deceased that establishes that either of them could control the accounts and provides that the bank was to hold the assets in the accounts to the order of the survivor of them.

20. The second defendant makes much the same allegations regarding control and enjoyment, entitlement to draw and operate these accounts, the making of substantial cash contributions, the presumption of advancement and beneficial accrual as he does with regard to the Mok 1 account.

21. The second defendant denies any breach of trust, but, in essence, admits that he has taken the assets for his own use.

22. He gives details of the contributions that he alleges he made to the two accounts.

23. As to the enjoyment of the Mok 1 account, the second defendant pleads that certain shares were withdrawn from this account with his knowledge and consent, but none under his signature. He says he did not, by his signature, draw any cash from this account.

24. He also says that he did not, by his signature, withdrawn any shares or cash from the HSBC account.

25. The securities in the HSBC account were, he says, pledged as collateral in support of banking facilities granted to a company called Pacific Wood Products in which he had a substantial interest.

The Evidence.

26. There was a great deal of evidence in this case. I cannot set it all out in this judgment. I will, however, deal with it as comprehensively as I think is necessary to understand the issues and my conclusions. Unfortunately, this will make this judgment rather longer than I would have liked. I have re-read my notes of the evidence in the course of preparing this judgment. The fact that I may not mention a piece of evidence specifically in this judgment does not mean that I have not had it in mind in reaching my conclusions.

27. Generally, I let the, evidence speak for itself, but, on occasions, I comment on it, where I think this necessary.

28. The plaintiffs called no evidence.

Mr Gordon Ma -the second defendant.

29. The second defendant gave evidence himself. He testified in English; a language in which he is obviously fluent. For convenience, and without any disrespect, I will refer to him hereafter as 'Gordon'. Most of the story emerges from his testimony.

30. Gordon told me that his parents were married in Shanghai on 3 September 1943 and that there are three surviving, children of the marriage: his twin sisters, May and Lynn, born on 8 June 1944, and himself, born on 5 June 1948. During the 'Chinese revolution', the family came to Hong Kong, where the deceased dealt in gold. This was unsuccessful and the deceased...

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