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Priya Lal Hiranand v Dr Hari Naroomal Harilela And Another

Judgment Cited authorities 9 Cited in Precedent Map Related
Vincent
Judgment Date02 November 2004
Subject MatterCivil Appeal
Judgement NumberCACV74/2004
CourtCourt of Appeal (Hong Kong)
CACV000072/2004 SHAON LAL HIRANAND v. DR HARI NAROOMAL HARILELA PADMA HARI HARILELA

cacv 72/2004, CACV 73/2004 & CACV 74/2004

CACV 72/2004

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 72 of 2004

(on appeal from HCSD NO. 11 of 2003)

_________________________

BETWEEN

　 SHAON LAL HIRANAND Applicant
　 and 　
　 DR HARI NAROOMAL HARILELA PADMA HARI HARILELA Respondents

_________________________

CACV 73/2004

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 73 of 2004

(on appeal from HCSD NO. 12 of 2003)

_________________________

BETWEEN

　 RAVINE LAL HIRANAND Applicant
　 and
　 DR HARI NAROOMAL HARILELA PADMA HARI HARILELA Respondents

_________________________


CACV 74/2004

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 74 of 2004

(on appeal from HCSD NO. 13 of 2003)

_________________________

BETWEEN

　 PRIYA LAL HIRANAND Applicant
　 and 　
　 DR HARI NAROOMAL HARILELA PADMA HARI HARILELA Respondents

_________________________

Before: Hon Rogers VP and Le Pichon JA in Court

Date of Hearing: 21 October 2004

Date of Judgment: 21 October 2004

Date of Handing Down Reasons for Judgment: 2 November 2004

_________________________

REASONS FOR JUDGMENT

_________________________

Hon Rogers VP:

1. I agree with the reasons for judgment of Le Pichon JA.

Hon Le Pichon JA:

2. These are appeals from the decision of Deputy High Court Judge Gill dated 30 October 2003 dismissing the applicants’ application to set aside statutory demands made against them in HSCD 11 to 13 of 2003. The appeals were heard together and there is no relevant distinction between the facts in any of the cases. At the conclusion of the hearing the appeals were dismissed with written reasons to be handed down later which we now do.

3. The applicants were the plaintiffs in Probate Action No. 15 of 2000. The defendants to the present appeals were two of three defendants in the probate action. Yam J dismissed the probate action on 15 August 2001 and ordered costs against the applicants. The debts which form the subject matter of the statutory demands are the taxed costs (together with interest) awarded to the defendants.

4. The debts are not disputed. The plaintiffs rely, inter alia, on Rule 48(5)(a) of the Bankruptcy Rules and contend that the statutory demands ought to have been set aside on the ground that they have a counterclaim against the defendants which equals or exceeds the amount due to the defendants in respect of the taxed costs.

5. The applicants are siblings. The 2nd defendant is their paternal aunt. The 1st defendant is the husband of the 2nd defendant. The trust was described in the following terms in the affirmation dated 19 December 2003 filed by the applicant in CACV 72/2004 (“the 1st applicant”) on behalf of himself and his brother Ravine, the applicant in CACV 73/2004:

“14.In or about 1998, our father transferred a sum of at least HK$6 million to [the 2nd defendant] for the [defendants] to hold on trust for the Applicants for the purpose of paying for the costs of the Applicants’ weddings.”

It would appear that pursuant to a request made by the father to the defendants by letter dated 2 November 2000, the defendants caused the equivalent in pounds sterling of HK$2 million to be remitted to the account of the father’s solicitors in London. This, it was said, was a breach of trust.

6. Mr Chan who appeared for the applicants submitted that the appropriate test to be applied is whether the applicants have shown that there is a general triable issue as to whether the defendants are liable to them in an amount that exceeds the debts supporting the statutory demands. To succeed in these appeals, the applicants not only have to make out a viable case that a trust exists but also that they are entitled to call for the corpus of the trust.

7. The circumstances in which the trust which was made orally was said to have arisen were dealt with in the following paragraphs of the 1st applicant’s affirmation:

“17.It is also important to understand the purpose and history behind our father setting up and settling this trust. Prior to the trust, our father had previously refused to pay for my marriage. I was very upset about this and had complained about my father’s refusal to the Harilela’s (the Respondents, who are my aunt and uncle).

18.The Respondents agreed and assured me that they would obtain money from our father and hold it for the Applicants to ensure that our marriages would be paid for. The Respondents assured me that we need not worry. It was our aunt Padma who then approached our father to ask him for this money to hold on trust for the Applicants to provide for our weddings.

19.Thus, one of the main reasons and intentions for settling the trust was to afford the Applicants, the beneficiaries, a degree of guarantee and certainty; so that, regardless of any future change of intention on the part of our father or any subsequent repeated refusal to pay for any of our weddings, our weddings would nonetheless definitely be provided for, since the money is now already held by the Harilela’s (the Respondents) on trust for us for that purpose, so that history would not and cannot repeat itself. The intention of everyone was to set-up a trust, which would achieve this.”

8. Mr Chan submitted that the trust that was created was a private trust of the “Denley” variety. This was a reference to the decision of Goff J in In re Denley’s Trust Deed [1969] 1 Ch 373. In that case, the question which arose was whether a trust to maintain land for use as a sports ground primarily for the benefit of the employees of a named company was invalid as falling foul of the beneficiary principle. That principle requires that “a gift on trust must have a cestui que trust” see per Harman J in Re Wood [1949] Ch 498 at 501. Goff J upheld the trust observing (at 383G to 384A) that where “the trust, though expressed as a purpose, is directly or indirectly for the benefit of an individual or individuals … it is in general outside the mischief of the beneficiary principle.” I do not see that Denley is of much assistance in the present case. The question which arises is not so much whether or not a trust could arise in the circumstances described in the 1st applicant’s affirmation but whether,...

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