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Stella Maria Da Silva And Others v Hsbc Trustee (Hong Kong) Ltd

Judgment Cited authorities 8 Cited in Precedent Map Related
Vincent
Judgment Date07 December 2009
Year2009
Citation[2010] 1 HKLRD 340
Judgement NumberHCMP100/2009
Subject MatterMiscellaneous Proceedings
CourtHigh Court (Hong Kong)
HCMP000100/2009 STELLA MARIA DA SILVA AND OTHERS v. HSBC TRUSTEE (HONG KONG) LTD

HCMP100/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.100 OF 2009

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IN THE MATTER of the Will of Ebraham Sadick dated 19 June 1978 (“the Will”)

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BETWEEN

STELLA MARIA DA SILVA 1st Plaintiff
CHRISTOPHER CHARLES DA SILVA 2nd Plaintiff
ANTHONY ANDREW DA SILVA 3rd Plaintiff
and
HSBC TRUSTEE (HONG KONG) LIMITED Defendant

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Before : Hon Chu J in Chambers

Date of Hearing : 25 August 2009

Date of Judgment : 7 December 2009

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J U D G M E N T

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1. In these proceedings commenced by originating summons, the plaintiffs seek a declaration that the 2nd and 3rd plaintiffs have become absolutely entitled to the remainder interest in the estate of the late Mr Ebraham Sadick (“the Testator”), and in the alternative the appointment of a different trustee to replace the defendant. The issues turn on the construction of the last will of the Testator.

The family background

2. The Testator had one son and one daughter. The son is Cameron Armand Sadick (“Cameron”). The daughter is Stella Maria Sadick (“Stella”), who is the 1st plaintiff.

3. The Testator died on 18 November 1986. Under his last will dated 19 June 1978 (“the Will”), the defendant (“the Trustee”) was appointed the executor and trustee of the Will. Probate was granted to the Trustee on 11 August 1987.

4. Cameron died on 7 January 2008 at the age of 82. It is the plaintiffs’ case, and accepted by the Trustee for the purpose of these proceedings, that Cameron was never married and had never fathered any child. Under Cameron’s last will dated 8 January 2002, Stella was named the sole executrix and beneficiary.

5. Stella was born in 1926 and is now aged 83. She was married to Mr Manuel da Silva and they had two sons during the marriage. They are Christopher Charles da Silva (“Christopher”) and Anthony Andrew da Silva (“Anthony”), who are respectively the 2nd and 3rd plaintiffs. They are aged 58 and 55, being born in 1951 and 1954 respectively. Stella’s husband died on 16 March 1991.

The Will

6. The part in the Will that are relevant to these proceedings are clauses 5(c)(i), (ii) and (iii). They provide as follows:

“5. SUBJECT to the payment of debts estate duty and executorship expenses I GIVE DEVISE BEQUEATH AND APPOINT all my estate not by this Will or by any Codicil to it otherwise disposed of to my Trustee UPON TRUST

…

(c) to hold the balance then remaining together with all parts of my estate for the time being unsold (hereinafter called “my Residuary Estate”) UPON TRUST to divide it into two equal shares and to hold: -

(i) one of such equal shares of my Residuary Estate to pay the income thereof to my daughter STELLA MARIA DA SILVA during her lifetime and after her death should my son CAMERON ARMAND (ARMEND) SADICK still be alive to pay the income thereof to such of the husband and children of my said daughter and if more than one in equal shares absolutely and after the death of my said son to divide the capital and income thereof between such of the husband and children of my said daughter as shall survive her and if more than one in equal shares absolutely PROVIDED that if any child of my said daughter is already dead or dies before attaining a vested interest leaving children then those children shall on reaching 21 years take equally the share which their parent would otherwise have taken;

(ii) the other one of such equal shares of my Residuary Estate to pay the income thereof to my son CAMERON ARMAND (ARMEND) SADICK during his lifetime and after his death should my said daughter STELLA MARIA DA SILVA still be alive to pay the income thereof to such of the wife and children of my said son and if more than one in equal shares absolutely and after the death of my said daughter to divide the capital and income thereof between such of the wife and children of my said son as shall survive him and if more than one in equal shares absolutely PROVIDED that if any child of my said son is already dead or dies before attaining a vested interest leaving children then those children shall on reaching 21 years take equally the share which their parent would otherwise have taken;

(iii) PROVIDED ALWAYS that if no one shall take a vested interest in my Residuary Estate under the foregoing sub-clause (ii) hereof then such share of my Residuary Estate shall accrue to the trusts created by the foregoing sub-clause (i) hereof or such of them as shall be capable of taking effect at the date of such accrual AND FURTHER PROVIDED ALWAYS that if no one shall take a vested interest in my Residuary Estate under the foregoing sub-clause (i) hereof then such share of my Residuary Estate shall accrue to the trusts created by the foregoing sub-clause (ii) hereof or such of them as shall be capable of taking effect at the date of such accrual;”

7. The effect of clause 5(c) in broad terms is this: The residuary estate of the Testator is divided into two equal shares, one is for the benefit of Stella and her family (Stella’s Share”) and another for the benefit of Cameron and his family (“Cameron’s Share”).

8. The arrangement for Stella’s Share, as provided for in clause 5(c)(i), is as follows:

(1) The income of Stella’s Share would be paid to Stella during her lifetime.

(2) If Stella dies and if Cameron is still alive, the income of Stella’s Share would be paid to her surviving husband and children in equal share;

(3) If Stella dies and if Cameron has also died, the capital and income of Stella’s Share would be paid to Stella’s surviving husband and children; and

(4) If any of Stella’s children dies before attaining a vested interest and leaving children, then such children of the deceased child of Stella would, upon reaching 21 years old, take the share that their parent would otherwise have taken.

9. The arrangement for Cameron’s Share, as provided for in clause 5(c)(ii) mirrors that for Stella’s Share.

10. Clause 5(c)(iii) caters for the eventuality that the interest in either Stella’s Share or Cameron’s Share does not vest. In the event this happens to Cameron’s Share, the interest would accrue to the Stella’s Share and vice versa.

Stella’s share

11. By a deed dated 12 July 2001 made between Stella and Christopher and Anthony, Stella as the life tenant consented to the advancement of one-half of the capital fund pertaining to her share to Christopher and Anthony in equal shares. The Trustee, exercising its power under section 34(1) of the Trustee Ordinance, Cap.29, had carried out the capital advancement.

12. By another deed dated 14 January 2002 made between Cameron, Stella, Christopher and Anthony and the Trustee, it was agreed that the capital fund pertaining to Stella’s share should be terminated and distributed to Stella, Christopher and Anthony.

13. Consequently, the residuary estate of the Testator comprises only Cameron’s Share.

Deed dated 12 January 2009

14. Upon Cameron’s death, clause 5(c)(ii) of the Will ceases to have effect since he was never married and never fathered any child. Clause 5(c)(iii) applies and Stella becomes entitled to the income of Cameron’s Share as a life tenant under the terms of clause 5(c)(i).

15. By a Deed of Disclaimer and Surrender dated 12 January 2009 made between Stella, Christopher and Anthony, Stella disclaimed and surrendered all her rights and entitlements in the remainder interest in the Testator’s residuary estate. The intention of the disclaimer and surrender, as expressed in paragraph (8) of the Recital and the body of the Deed, is to accelerate the remainder interest so that such remainder interest may become immediately and absolutely vested in possession in the remaindermen, namely, Christopher and Anthony.

16. Although the Deed is termed a disclaimer and surrender, as the Trustee points out, and which the plaintiffs accept, Stella can only surrender, but cannot disclaim, her interest as a life tenant as she had entered into enjoyment of it.

The Trustee’s position

17. The Trustee, on the basis of legal advice, has doubts whether it should accept early termination of the trust and transfer the remainder interest in the residuary estate to Christopher and Anthony without first obtaining the court’s sanction. In these proceedings, it does not seek to actively oppose the application, but wishes to draw to the court’s attention its concern and doubts.

18. The concerns of the Trustee are: First, whether the interest of Christopher and Anthony is vested or contingent. It is said that in light of the language in clause 5(c)(i), especially the inclusion of a gift over in the event of their death “before attaining a vested interest”, it may be that Christopher and Anthony only have a contingent interest in the residuary estate. Second, if Christopher and Anthony’s interest is vested, but subject to being divested, then whether acceleration of an absolute interest in the residuary estate to them should be deferred pending the happening of the divestment (i.e. the death of Stella). Third, as the subsequent interest of Christopher and Anthony is a class gift, whether a premature closing of the class in the event of acceleration is permissible.

Vested or contingent interest?

19. In Re Flower’s Settlement Trusts [1957] 1 WLR 401, it was established that a subsequent interest can be accelerated upon the surrender of a prior interest. The principle of acceleration was explained by Jenkins LJ (at 405) as follows:

“The principle, I think, is well settled, at all events in relation to wills, that where there is a gift to some person for life, and a vested...

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