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The Secretary For Justice v Joseph Lo Kin Ching And Others

Judgment Cited authorities 17 Cited in Precedent Map Related
Vincent
Judgment Date11 April 2014
Year2014
Judgement NumberCACV44/2013
Subject MatterCivil Appeal
CourtCourt of Appeal (Hong Kong)
CACV44/2013 THE SECRETARY FOR JUSTICE v. JOSEPH LO KIN CHING AND OTHERS

CACV 44/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 44 OF 2013

(ON APPEAL FROM HCMP NO. 853 OF 2012)

________________________

IN THE MATTER OF the Will dated 28 July 2002 of KUNG, NINA (龔如心) also known as NINA KUNG and NINA T H WANG, late of Top Floor, Chinachem Golden Plaza, 77 Mody Road, Tsimshatsui East, Kowloon, Hong Kong, Widow, Deceased

________________________

BETWEEN

THE SECRETARY FOR JUSTICE Plaintiff
and
(1) JOSEPH LO KIN CHING and DEREK LAI KAR YAN, THE JOINT AND SEVERAL ADMINISTRATORS OF THE ESTATE OF KUNG, NINA (龔如心) also known as NINA KUNG and NINA T H Wang Defendants
(2) CHINACHEM CHARITABLE FOUNDATION LIMITED (華懋慈善基金有限公司)
(3) 施福英，THE NATURAL MOTHER OF THE DECEASED

AND

BETWEEN

THE SECRETARY FOR JUSTICE Plaintiff
and
(1) JOSEPH LO KIN CHING, DEREK LAI KAR YAN, LAM HOK CHUNG RAINER and JONG YAT KIT, THE JOINT AND SEVERAL ADMINISTRATORS OF THE ESTATE OF KUNG, NINA (龔如心) also known as NINA KUNG and NINA T H Wang Defendants
(2) CHINACHEM CHARITABLE FOUNDATION LIMITED (華懋慈善基金有限公司)
(3) 施福英，THE NATURAL MOTHER OF THE DECEASED

(By original originating summons and order to carry on)

AND

BETWEEN

THE SECRETARY FOR JUSTICE Plaintiff
and
(1) LAM HOK CHUNG RAINER, JONG YAT KIT and YU SAI HUNG, THE JOINT AND SEVERAL ADMINISTRATORS OF THE ESTATE OF KUNG, NINA (龔如心) also known as NINA KUNG and NINA T H Wang Defendants
(2) CHINACHEM CHARITABLE FOUNDATION LIMITED (華懋慈善基金有限公司)
(3) 施福英，THE NATURAL MOTHER OF THE DECEASED

(By original originating summons and order to carry on)

________________________

Before : Hon Lam VP, Cheung and Kwan JJA in Court
Dates of Hearing : 25, 26 and 27 February 2014
Date of Judgment : 11 April 2014

_____________

JUDGMENT

_____________

Hon Lam VP (giving the Judgment of the Court):

1. Nina Wang passed away on 3 April 2007. On 2 February 2010, the court pronounced her will of July 2002 [“the Will”] in solemn form in HCAP 8 of 2007. That judgment was upheld on appeal in CACV 62 of 2010 on 14 February 2011. Application for leave to appeal to the Court of Final Appeal was refused by the Appeal Committee on 24 October 2011 in FAMV 20 of 2011.

2. The Will is a homemade Chinese will. It provides as follows:

“我, 龔如心謹立遺囑如下:

一. 「華懋慈善基金有限公司」 是我與我先生王德輝共同創立 。我所有財產于我離世之後全部撥歸 「華懋慈善基金有限公司」。

二. 「華懋慈善基金有限公司」 在我離世之後希望交託由聯合國秘書長、中國政府總理和香港特別行政區政府首長組成的管理機構監管，並在此監管下 「華懋慈善基金有限公司」除必須繼續自創立以來所進行的各項目，使其不斷發展，還要繼續達到設立中國的類似諾貝爾獎的具有世界性意義的獎金和基金的目的。

三. 「華懋慈善基金有限公司」 之董事會必須在上述監管機構監管下切實管理好公司的業務和資金，維護與擴大 「華懋集團」 和我們開創的所有事業，確保 「華懋慈善基金有限公司」 之商業王國不斷壯大，並以其部分盈利將慈善事業不斷發展達至永遠。

四. 「華懋慈善基金有限公司」 必須繼續做到:

1. 對王氏家族的老一輩，王廷歆先生及任玉珍女士 ，須給予按其意願、令其滿意的供養。

2. 負責王德華的生活與醫療。及照顧其子女和深造之需要。至于我丈夫王德輝的其餘弟妹，如有需要公司也有責任給予照顧。其子女如升大學或深造公司均應負責。

3. 「華懋慈善基金有限公司」 有責任給予 「華懋集團」 的同事及其子女以關懷和幫助。鼓勵他們不斷進修，不斷自我增值。鼓勵他們一起為實現造福人類的理想共同努力 。”

3. The certified English translation of the Will is as follows:

“I, Kung Yu Sum, solemnly make my will as follows :

1. ‘Chinachem Charitable Foundation Limited’ was set up by me and my husband, Wang Teh Huei, jointly. After I pass away, all of my properties shall be bequeathed to ‘Chinachem Charitable Foundation Limited’.

2. After I pass away, I wish to entrust ‘Chinachem Charitable Foundation Limited’ to the supervision of a managing organization jointly formed by the Secretary General of the United Nations; the Premier of the PRC Government as well as the Chief Executive of the Hong Kong Special Administrative Region. Under its supervision, not only must ‘Chinachem Charitable Foundation Limited’ continue all the projects which it has undertaken since its establishment to enable their developments continuously, but it must also continue to achieve the purpose of setting up a fund and a Chinese prize of worldwide significance similar to that of the Nobel Prize.

3. The Board of Directors of ‘Chinachem Charitable Foundation Limited’ shall practically manage the company’s businesses and capital under the supervision of the abovementioned supervising organization, to safeguard and expand the ‘Chinachem Group’ as well as all the businesses which we have set up, to ensure the continuous growth of the business empire of the ‘Chinachem Charitable Foundation Limited’ and with part of its profits, to continuously develop the charitable business till eternity.

4. ‘Chinachem Charitable Foundation Limited’ must continue to achieve:

(1) provide for the seniors of the Wang’s family, Mr Wang Din Shin and Madam Run Yuk Chun, which provision should be in accordance with their wishes and be satisfactory to them.

(2) support Wang Teh Hwa’s living and medical expenses, to look after her children as well as their needs of advanced studies. As regards the other siblings of my husband, Wang Teh Huei, if necessary, the company also has the obligation to look after them. If their children pursue university or advanced studies, the company should be responsible (for the costs).

(3) ‘Chinachem Charitable Foundation Limited’ has the obligation to provide care and assistance to the staff of the “Chinachem Group” and their children, to encourage them to continue studying and keep on enhancing their own value, to encourage them to work hard together towards achieving the goal of bringing benefit to mankind.”

4. Though some points of translation were raised by this court, we shall proceed on the certified version. For ease of reference, we will refer to the first sentence in Clause 2 of the Will as Clause 2(1), and the second sentence as Clause 2(2).

5. The estate is enormous. Nina, as the chairwoman of the Chinachem Group of companies, was reputed to be the richest woman in Asia. According to the information supplied by the Administrators of the estate, its value in 2012 was about $82.86 billion with an operating profit of $2.48 billion in that year.

6. The 2nd Defendant, Chinachem Charitable Foundation Limited [“the Foundation”], is a company established by Nina and her late husband in 1988. It is a company limited by guarantee and it has been granted tax exemption status under Section 88 of the Inland Revenue Ordinance as a charitable institution. It is named as the donee of the whole of Nina Wang’s estate under Clause 1 of the Will.

7. After the issue as to the validity of the Will had been determined, the Secretary for Justice [“SJ”] issued proceedings in HCMP 853 of 2012 seeking the determination of the court on some construction issues in respect of the Will. The main issue is whether the Foundation received the estate as an absolute gift (as contended by the Foundation) or as a trustee holding it on a charitable trust (as contended by the SJ). There were other issues raised in the Originating Summons, which had been amended and re-amended. At the trial before Poon J, the parties focused on paragraphs 1 to 5 of the Originating Summons, the other paragraphs were adjourned with liberty to restore.

8. In his judgment of 22 February 2013, Poon J [“the Judge”] resolved the construction issues in favour of the SJ. The Judge held that the gift to the Foundation under the Will is not an absolute gift. Rather, the Foundation is to hold the estate on a charitable trust. The Foundation appeals against that decision. Before us, the submissions of the parties focused on the challenge to the Judge’s conclusion that the bequest under the Will is subject to a charitable trust. The appeal proceeded on the basis that this court would focus on this issue. If our conclusion is that the Foundation holds the assets under a charitable trust, it is contemplated that there would be a second stage of the proceedings (by way of restoring the other paragraphs in the Originating Summons at the Court of First Instance) seeking directions from the court on the administration of the trust, including the approval of a scheme (to be submitted).

The stance of the Foundation

9. At the outset of the appeal, at the invitation of the court in light of what were set out in skeleton submissions, Mr Hinks QC informed us even if it were to be held that the bequest is an absolute gift, it is not the Foundation’s case that it would not be subject to any supervision at all. Counsel said the Foundation accepted that as it is a charitable company, the SJ and the court have roles to play in the supervision of its affairs. We were referred to several cases on the court’s power to intervene in the affairs of charitable companies, notably Construction Industry Training Board v Attorney General [1973] 1 Ch 173; Liverpool and District Hospital for Diseases of the Heart v Attorney General [1981] 1 Ch 193; In re ARMS (Multiple Sclerosis Research) Ltd [1997] 1 WLR 877; Ontario (PGT) v AIDS Society for Children (2001) 39 ETR (2d) 96.

10. Whilst there is no doubt that the court and the SJ have jurisdiction and power to monitor the affairs of a charitable company, the precise limits of that jurisdiction are in dispute. The jurisdiction must stem from the parens patriae function of the court and the SJ. Though it has often been said in the cases that a charitable company is in a position analogous to that of a trustee in relation to its corporate assets, it is also clear that neither the company nor its directors act as trustee in the strict sense in the exercise of power over the assets. At the same time, the authorities suggest that such company owed fiduciary duties to the donor as well as the general public. This is accepted by both Mr Hinks and Mr Taube QC, who appeared for the SJ.

11. In Construction Industry Training Board v Attorney General [1973] Ch...

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