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Tam Mei Kam v Hsbc International Trustee Ltd And Others

Judgment Cited authorities 25 Cited in Precedent Map Related
Vincent
Judgment Date16 June 2008
Year2008
Judgement NumberHCAP2/2004
Subject MatterProbate Action
CourtHigh Court (Hong Kong)
HCAP000002/2004 TAM MEI KAM v. HSBC INTERNATIONAL TRUSTEE LTD AND OTHERS

HCAP 2/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO 2 OF 2004

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IN THE ESTATE OF MUI YIM FONG, deceased.

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BETWEEN
TAM MEI KAM Plaintiff
and
HSBC INTERNATIONAL TRUSTEE LIMITED
(in the capacity as the sole executor and trustee named in the Purported Will of the Deceased dated 3rd December 2003)		 1st Defendant
HSBC INTERNATIONAL TRUSTEE LIMITED
(in the capacity as the Trustee of the Karen Trust, which is the sole devisee named in the Purported Will of the Deceased dated 3rd December 2003)		 2nd Defendant
NEW HORIZON BUDDHIST ASSOCIATION LIMITED 3rd Defendant
AU KAI EDDIE 4th Defendant

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Before: Hon A Cheung J in Court

Dates of Hearing: 15-18, 21-25 & 28-30 April, 2, 5, 9 & 14-16 May 2008

Date of Judgment: 16 June 2008

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J U D G M E N T

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Introduction

1. Mui Yim-fong (梅艷芳), also known as Anita Mui, needs no introduction in Hong Kong.

2. During her brief lifetime (1963-2003), she was a highly popular Hong Kong pop singer and actress. At the height of her career which took off in 1982 after winning a television singing contest, she received numerous singing awards. Her concerts were sold-outs and she was well known not only in Hong Kong but also on the Mainland, in Taiwan and overseas Chinese communities. She was also an acclaimed movie actress and had won important acting awards.

3. In September 2003, she announced in a press conference held in Hong Kong that she was suffering from cervical cancer, which was first diagnosed in 2001, and she was undergoing treatment. Notwithstanding her illness and treatment, she held a series of eight concerts at Hong Kong Coliseum in November 2003 and after the concert, she flew to Japan to shoot a television commercial. She felt ill during her short stay in Japan and immediately upon her return to Hong Kong on 27 November, she was admitted to Hong Kong Sanatorium & Hospital. That, unfortunately, turned out to be her final admission. Despite treatment, her condition deteriorated and she passed away on 30 December 2003 due to liver complications.

4. The deceased was single, and is survived by her elderly mother who is now 84 years old as well as two elder brothers. An elder sister who was close to the deceased had also succumbed to cancer in 2000.

5. On 3 December 2003, ie around a week after the deceased’s final admission and less than 1 month before her eventual demise, she executed a will at Hong Kong Sanatorium & Hospital which essentially left her entire estate to a trust known as the Karen Trust. The Karen Trust is a trust set up by the deceased on the same day at hospital, immediately before she executed the will. It is a “discretionary trust” set up by the deceased as settlor, with HSBC International Trustee Limited (HSBC) acting as trustee. Indeed the will also named HSBC as executor.

6. Under the Karen Trust, which gives HSBC as trustee extremely wide discretionary powers, the mother of the deceased as well as 4 nieces and nephews – they being the daughters of one of the elder brothers of the deceased and the sons of the late elder sister of the deceased – are the named beneficiaries. New Horizon Buddhist Association Limited, a charity promulgating the Tibetian Buddhist faith, is named as the final repository.

7. Apart from executing the trust documents and the will, the deceased also confirmed with HSBC’s representative, Mrs Doris Lau, who explained the relevant documents to the deceased and attended to the deceased’s execution of these documents, the contents of a trustee memorandum. In the trustee memorandum, the deceased as settlor set out her “suggestions” to the trustee for the trustee’s consideration. Amongst other things, the deceased suggested to the trustee to leave two properties, one in Happy Valley and another in London, to Mr Lau Kai Eddie, better known in his Chinese alias “劉培基”, a well-known image and costume designer who had worked with the deceased since the early 1980s.

8. Besides, the trustee memorandum also recorded the deceased’s wishes to set aside a total sum of $1.7 million to subsidise her nephews’ and nieces’ tertiary education.

9. Most importantly, the trustee memorandum set out the deceased’s suggestion that the trustee should hold the balance of the trust fund for her mother, while she is alive and make a monthly distribution of $70,000 for her use and benefit. Upon her mother’s death, the trustee shall distribute the entire balance then remaining to New Horizon Buddhist Association Limited as final repository.

10. What happened in the private ward of the deceased on the morning of 3 December was witnessed by three persons, namely, Mrs Doris Lau, Mrs Sheila Ho and Dr Peter Teo. Mrs Sheila Ho was very close to the deceased. In fact, the deceased was the goddaughter of Mrs Ho and her late husband, Mr Ho Koon-cheung (何冠昌) – a co-founder of Golden Harvest, a well-known movie production and distribution company. Indeed, the deceased had a less well-known name in Chinese, “何加男”, by reason of her relationship with her godparents. There is little doubt that the name of the trust, “Karen”, was based on this particular name of the deceased – “加男” (which sounds like Karen in Cantonese).

11. Dr Peter Teo is a well-known and experienced oncologist. He is and was at the time the director of the Comprehensive Oncologist Centre as well as the director of the Department of Radiotherapy at Hong Kong Sanatorium & Hospital. Most importantly, he was the treating doctor of the deceased at the time. Indeed, he had treated the deceased since July 2003. Dr Teo, together with a team of expert colleagues at the hospital, were in charge of treating the deceased during her final admission until her eventual demise on 30 December 2003.

12. Both Mrs Sheila Ho and Dr Teo were present when Mrs Doris Lau explained the contents of the trust deed and the will to the deceased. Mrs Lau actually signed the trust deed as witness. As regards the will, both Dr Teo and Mrs Lau signed as attesting witnesses. After the execution of the will, Dr Teo left the ward, whereas Mrs Sheila Ho remained behind, in whose presence Mrs Lau explained and confirmed the contents of the trustee memorandum with the deceased, who also executed a number of related trust documents.

13. The deceased kept her mother in the dark on her final admission to hospital. The mother only learnt of her admission and her critical condition on 28 December 2003 when she was required by the hospital to sign consent forms for administering urgent treatment for the deceased. She was also wholly ignorant of the making of the will and the setting up of the Karen Trust.

Litigation

14. After the death of the deceased, the mother learnt of the contents of the will and part of the contents of the trust and trustee memorandum (insofar as they concerned her). She and apparently her son(s) could not accept the contents of the will and the trust arrangement, and that eventually led to the commencement of the present probate action in 2004. Originally, only HSBC was named as the defendant, it being the executor of the will as well as the trustee under the Karen Trust. Following directions given by Lam J in related proceedings taken out by HSBC for a Beddoe order, HSBC has since adopted a neutral stance in the present action – leaving it to New Horizon Buddhist Association Limited as well as Eddie Lau, who have since been joined as the 3rd and 4th defendants, to defend the mother’s claim. The mother challenges both the will and the trust arrangement.

15. Indeed, New Horizon Buddhist Association Limited, as 3rd defendant has taken on the task of propounding the will and defending the validity of the trust arrangement, under which it is the final repository. In its task, the 3rd defendant is assisted by Eddie Lau, the 4th defendant, who also supports both the trust and the will.

Issues

16. So far as propounding the will is concerned, there is no dispute that the 3rd defendant as propounder bears the burden of establishing due execution, testamentary capacity and knowledge and approval. Up to the first day of trial, the mother as plaintiff had also alleged undue influence against Mrs Sheila Ho. Very wisely, in my view, Mr Chan SC – Mr Liu with him – abandoned the allegation on the first day of trial. In those circumstances, so far as the will is concerned, the 3rd defendant bears the burden of proof on all material factual issues.

17. Mr Chan, on behalf of the plaintiff, has also raised a number of legal arguments to challenge the will/trust arrangement, which raises a number of interesting if not important points.

18. The trial lasted 18 days. But for the restraint and good sense of counsel on all sides, the trial would have lasted much longer.

19. Insofar as the standard probate issues are concerned, namely, due execution, testamentary capacity and knowledge and approval, they turn on the facts and expert medical evidence. As propounder of the will, the 3rd defendant bears the burden of proof. The plaintiff does not put forward any positive case to challenge the will. She just puts the 3rd defendant to strict proof.

20. That notwithstanding, the plaintiff has raised certain issues for the 3rd defendant to meet. In terms of testamentary capacity, the plaintiff, who was of course ignorant of the deceased’s final admission and particularly her execution of the will and trust documents on 3 December, has commissioned Dr Edmund Woo, a well-known neurologist, to prepare expert reports based on some contemporaneous notes kept by Mrs Doris Lau as well as the medical notes and...

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