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Norman Guy Donald And Another v Lee Michael Chak Chuen In His Capacity As Executor Of The Estate Of Li Pak Iu And Others

Judgment Cited authorities 3 Cited in Precedent Map Related
Vincent
JurisdictionHong Kong
Judgment Date11 September 2023
Neutral Citation[2023] HKCA 1032
Year2022
Subject MatterCivil Appeal
Judgement NumberCACV203/2022
CourtCourt of Appeal (Hong Kong)
CACV203/2022 NORMAN GUY DONALD AND ANOTHER v. LEE MICHAEL CHAK CHUEN in his capacity as executor of the estate of LI PAK IU AND OTHERS

CACV 203/2022, [2023] HKCA 1032

On Appeal From [2022] HKCFI 1106

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 203 OF 2022

(ON APPEAL FROM HCMP NO 610 OF 2021)

__________________

IN THE MATTER OF the estate of LI SING KUI, deceased

and

IN THE MATTER OF Order 85 of the Rules of the High Court (Cap 4A)

__________________

BETWEEN
(1) NORMAN GUY DONALD and (2) LAI KAR YAN (DEREK), THE JOINT AND SEVERAL ADMINISTRATORS OF THE ESTATE OF LI SING KUI DECEASED Plaintiffs
and
LEE MICHAEL CHAK CHUEN in his capacity as executor of the estate of LI PAK IU 1st Defendant
LEE CHERYL ANN in her capacity as executrix of the estate of LI PAK TAT (by chain of representation) 2nd Defendant
CHEUNG WAI MING DAISY in her capacity as executrix of the estate of LI PAK LEUNG 3rd Defendant
LI PAK HUEN in his capacity as executor of the estate of LI PAK WING 4th Defendant
LI PAK HUEN 5th Defendant

__________________

Before: Hon Chu VP, Yuen and Au JJA in Court
Date of Hearing: 2 March 2023
Date of Judgment: 11 September 2023

___________________

J U D G M E N T

___________________

Hon Chu VP:

1. I agree with the judgment of Yuen JA.

Hon Yuen JA:

2. This is an appeal from a Decision of B Chu J (“the Judge”) given on 21 April 2022 (“the Decision”) in HCMP610/2021 in proceedings concerning the estate (“the Estate”) of Li Sing Kui (“the Deceased”) who died on 28 August 1955 aged 76, leaving a Will dated 15 December 1954 (“the Will”). Essentially, the matter before the Judge centered on the construction of a clause in the Will1 which will be discussed later in this Judgment.

Background

3.1. The relevant background may be summarized as follows.

3.2. The Deceased was a wealthy businessman. He had a tin fong wife, 2 concubines, 5 sons and 15 daughters. In his Will, he provided for his family2 in the following way.

3.3. As for his tin fong wife Madam Leung, and 2 concubines Madam Cheung and Madam Chau, in clause 4 of his Will, he gave each of them annuities of equal sums during their respective lifetimes, and in clause 8, he authorized the trustees to provide for the payment of these annuities by establishing an annuity fund for each, and on the cesser of an annuity, that annuity fund would revert to his residuary estate. The last surviving of them (Madam Chau) died in 2002.

3.4. As for the daughters, they are not affected by these proceedings, although some of them were given pecuniary legacies etc [clauses 3(a) and (b)3 and clause 5(1)(b)].

3.5. The Deceased had 5 sons, viz.

- 1 son Pak Tat (James), by Madam Leung

- 1 son Pak Iu (Francis), by Madam Cheung, and

- 3 sons Pak Leung (Bernard), Pak Wing and Pak Huen, by Madam Chau.

As seen below, they were beneficiaries in equal shares of his residuary estate.

4. Four of the sons died between 1987 and 2016, leaving only Pak Huen who is the 5th defendant in these proceedings. The estates of the other 4 sons are represented as follows:

- Lee Michael Chak Chuen is the 1st defendant in his capacity as executor of Pak Iu’s estate,

- Lee Cheryl Ann is the 2nd defendant in her capacity as executrix of Pak Tat’s estate (by chain of representation),

- Cheung Wai Ming Daisy is the 3rd defendant in her capacity as executrix of Pak Leung’s estate, and

- Pak Huen is the 4th defendant in his capacity as executor of Pak Wing’s estate, of which he is also the sole beneficiary: Lee Goo Lynette Siu Yin v Cheung Wai Ming and others [2019] HKCFI 1086, [29].

(Where this Judgment refers to “the 5th defendant”, that is a reference to Pak Huen personally only).

5. The executors and trustees named in the Will were Pak Iu, Pak Leung and Madam Chau. Probate was first granted on 19 June 1956 to Pak Iu and Madam Chau, power being reserved to Pak Leung to apply for a like grant. Subsequently, on 22 May 1957, double probate of the Will was granted to Pak Leung.

6. There have been previous proceedings between the members of the Li family, but they are not material to the present appeal. Suffice it to say that on 3 July 2020, Letters of Administration with the Will annexed de bonis non of the estate left unadministered were granted to the plaintiffs, who are professional trustees (“the Trustees”).

HCMP610/2021

7. In 2021, the Trustees commenced these proceedings. In the Originating Summons (“OS”), the first issue was for the court to determine the issue of the validity of Clause 5(2)(f) of the Will and to make consequential orders.

Clause 5

8. Clause 5 of the Will provided as follows:

“5. I devise and bequeath all my real and personal estate and effects unto my Trustees upon Trust to sell call in and convert the same into money with power in their absolute discretion to postpone such sale calling in and conversion and after payment thereout of my debts funeral and testamentary expenses, legacies and annuities to invest the residue of such moneys in manner hereinafter authorised and to stand possessed of such investments and of all parts of my estate for the time being unsold (hereinafter called ‘the Residuary Estate’) during the joint lives of my Tin Fong wife Li Leung Shi and my Concubines Li Cheung Shi and Li Chau Shi and the life of the survivor of them4 Upon the following Trusts:-

(1) Upon Trust from time to time and at such times and in such manner as my Trustees shall in their absolute discretion think fit to pay or apply the income of the Residuary Estate or any part or parts of such income or such part of the capital of the Residuary Estate as they may for the time being think advisable in or towards the following purposes:-

(a) To keep and maintain a family house at No.15 Robinson Road Victoria Hong Kong for the habitation of my Tin Fong Wife Li Leung Shi my Concubines Li Cheung Shi and Li Chau Shi during their respective lives.

(b) For the support maintenance and education of each of my unmarried daughters hereinbefore mentioned until each of them shall attain the age of twenty eight years or marry under that age.

(c) For the support maintenance and education of each of my sons hereinbefore mentioned5 until each of them shall attain the age of twenty eight years Provided that my Trustees if they think advisable may continue to pay for the educational expenses of any of my said sons until he shall attain the age of thirty years6.

(2) Subject to the above Trusts my Trustees shall divide the Residuary Estate into SIX (6) equal shares and hold the same Upon Trust as follows:-

(a) ONE (1) share to and for my son LI PAK IU absolutely.

(b) ONE (1) share to and for my son LI PAK TAT absolutely.

(c) ONE (1) share to and for my son LI PAK LEUNG absolutely.

(d) ONE (1) share to and for my son LI PAK WING absolutely.

(e) ONE (1) share to and for my son LI PAK HUEN now aged 16 years absolutely.

(f) ONE (1) share to be appropriated for ‘Ching Sheung’ (蒸嘗) for the purpose of Ancestor Worship Provided nevertheless that my Trustees may in their uncontrolled discretion pay or apply the said share or any part thereof to or for the benefit maintenance and support of some one or more to the exclusion of the others or other of my abovementioned sons”.

9. The first issue in the OS was whether clause 5(2)(f) (the entirety of which is referred to hereafter as “the Ching Sheung clause”) was void for infringing the Common Law rule against perpetuities, and if so, whether distributions of the Residuary Estate should be divided into 5 equal shares for the 5 residuary beneficiaries in clauses 5(2)(a) to (e), i.e. the 5 sons.

10.1. All the defendants were served with the OS, and all (except the 1st defendant) were legally represented. Chui & Lau, the solicitors for the 4th and 5th defendants filed an acknowledgment of service on 23 July 2021 indicating that they did not intend to contest the proceedings. All the defendants were absent at the hearing of the OS7 before the Judge on 13 December 2021.

10.2. After considering the Trustees’ submissions, the Judge declared on 13 December 2021 that the Ching Sheung clause was void for infringing the Common Law rule against perpetuities, and ordered that any interim distribution earmarked by the plaintiffs for clause 5(2)(f) be distributed to the 5 residuary beneficiaries in clauses 5(2)(a) to (e), i.e. the 5 sons.

10.3. On 17 December 2021 however, the solicitors for the 4th and 5th defendants wrote to the court asking for a rehearing as leading counsel8 had given certain advice the previous day. The order of 13 December 2021 had not been sealed. On 5 January 2022, the Judge allowed the application for a rehearing.

The 5th Defendant’s Summons

11. On 22 February 2022, Chui & Lau, as solicitors for the 5th defendant only, issued a summons for the determination of the following questions arising in the administration of the Estate:

“1. Notwithstanding that the part of the Clause 5(2)(f) of the Will of the Deceased dated 15th December 1954 (the ‘Will’) on the one share of the residuary estate ‘to be appropriated to ‘Ching Sheung’ (蒸賞[嘗]) for the purpose of Ancestor Worship’ is void, whether the proviso for the discretionary trust stated in the remainder of clause 5(2)(f) of the Will is valid;

2. If the answer to Qn.1 is ‘yes’, whether the one share of the residuary estate stated in clause 5(2)(f) of the Will is held on discretionary trust for the sole surviving object of the discretionary trust, i.e. the 5th Defendant;

3. If the answer to Qn. 2 if ‘yes’, whether the 5th Defendant being the sole surviving object of the discretionary trust, is entitled to direct the Plaintiffs as trustees to...

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