TAM MEI KAM v HSBC INTERNATIONAL TRUSTEE LIMITED

HCMP 2981/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2981 OF 2004

____________

____________

_______________

J U D G M E N T

_______________

1.  This is an application for an order of payment of maintenance under section 4 of the Inheritance (Provision for Family and Dependents) Ordinance, Cap 481 (“the Ordinance”).

Eligibility for section 4 order

2.  The applicant Madam Tam was the mother of the deceased artist Madam Mui Yim Fong (“the Deceased”).  The Deceased made a will (“the Will”) leaving her entire estate (“the Estate”) to a Karen Trust (“the Trust”), a discretionary trust.  The 1st respondent is named in the Will as the executor and trustee of the Estate.  It is also the trustee of the Trust.

3.  The Deceased did not make any provision for Madam Tam as she intended that the Trust would provide for Madam Tam.  Madam Tam however has been provided for by interim maintenance orders made under section 7 of the Ordinance.

4.  Madam Tam commenced these proceedings on 6 October 2004 seeking an order for reasonable financial provision under section 4 of the Ordinance.  Before proceeding to consider the application in terms of section 4, I have to consider the meaning and effect of section 3(1)(iv) and (3) of the Ordinance on this application.  Sections 3(1)(iv) and (3) insofar as they are relevant to this application provide:

“(1) Where after the commencement of this Ordinance a person dies-

(a) domiciled in Hong Kong; ...

and is survived by any of the following persons-

...

(iv) a parent of the deceased who immediately before the death of the deceased was being maintained, either wholly or substantially, by the deceased;

...

that person may apply to the court for an order under section 4 on the ground that the disposition of the deceased's estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant.

...

(3) For the purposes of subsection (1)..., (iv), ..., a person shall be treated as being maintained by the deceased, either wholly or substantially, as the case may be, if the deceased, otherwise than for full valuable consideration, was making a substantial contribution in money or money's worth towards the reasonable needs of that person.”

5.  There is no dispute that Madam Tam was wholly dependent on the Deceased for her livelihood immediately before the Deceased’s death.  The Deceased had provided for all her daily needs including monetary allowance before the Deceased passed away.  The Deceased maintained Madam Tam not for valuable consideration. Hence, Madam Tam was the Deceased’s mother who was being maintained wholly by the Deceased immediately before the Deceased’s death.  Madam Tam thus satisfied section 3(1) (iv) and (3) of the Ordinance.

6.  The next issue is whether the disposition of the Estate effected by the Will or the law of intestacy or the combination of both is not such as to make reasonable financial provision for Madam Tam. 

7.  Since the Deceased had by the Will left the entire Estate to the Trust, the law of intestacy has no part to play and does not need to be considered.

8.  The next step is to consider whether the Trust contains provisions that make reasonable financial provision for Madam Tam.  This consideration is necessary because the primary stance of the 3rd respondent is that the Deceased had made reasonable provisions for the maintenance of Madam Tam in the Will through the proper exercise of the discretionary power of the 1st respondent as the trustee of the Trust in terms as stated in the trust deed (“Deed”) that set up and govern the Trust.

9.  When asked to advise the court on the exact terms of the Deed that govern the discretionary power of the 1st respondent which legally oblige the 1st respondent to make reasonable financial provision for Madam Tam, the 3rd respondent referred to clauses 5(a), (b) and the Third Schedule of the Deed.  These provisions and clause 5(c) provide:

“5(a) The Trustee shall stand possessed of the Trust Fund and the income thereof UPON TRUST and with full power from time to time ... to ... pay or apply the whole or any part of the Trust Fund and the income thereof for the advancement maintenance ... or benefit of all or such one or more to the exclusion of the other of the Beneficiaries and in such proportions or manner and upon such other terms and conditions as the Trustee shall in its absolute and uncontrolled discretion deem appropriate ...

5(b) In the exercise by the Trustee of its powers under sub-clause (a) above in favour of a Beneficiary who is not sui juris by reason of infancy or otherwise the Trust may pay or apply such part of the income of the Trustee Fund as it shall think fit to the parent guardian or other person for the time being having the care or custody of such Beneficiary ...

5(c)    The Trustee may in its absolute discretion at any time by deed appoint additional persons not being members of the Excluded Class to become Beneficiaries.”

“THE THIRD SCHEDULE

‘Beneficiaries’ means and includes:-

(1) TAM Mei Kam (mother of Settlor);

(2) MUI Pak Ning (niece of Settlor);

(3) MUI Pak Wai (niece of Settlor);

(4) POON Chun Ho (nephew of Settlor); and

(5) POON Man Ho (Nephew of Settlor).”

10.  I do not know why the 3rd respondent would refer to clause 5(b) as Madam Tam is surely sui juris.  She is of age and independent. Putting aside clause 5(b), the legal effect of clauses 5(a), 5(c) and the Third Schedule is that the 1st respondent may or may not provide for Madam Tam.  It has the absolute discretion to add to the membership of beneficiaries and a similar discretion to provide maintenance to one or more of the beneficiaries.  Whether Madam Tam would be provided for by the 1st respondent out of the Trust is entirely a matter of the 1st respondent’s discretion.  The 1st respondent is not legally obliged to provide for her.  It is thus clear that the primary stance of the 3rd respondent is wrong and the disposition of the Estate by the Will is not such as to make reasonable financial provision for Madam Tam. 

Stance of the 1st respondent

11.  I would also record the stance of the 1st respondent as stated by its senior counsel Mr Man on why it has not taken any initiative to provide for Madam Tam by exercising its discretionary powers in the Deed.

12.  Mr Man advised that when these proceedings were taken out by Madam Tam for maintenance, Madam Tam was litigating against the validity of the Will and Trust.  In the light of such litigation and the possibility that the Will and Trust might be declared invalid, the 1st respondent was not in a position to exercise its discretionary powers in the Deed.  Madam Tam was in the meantime maintained by payments made out of the Estate pursuant to interim maintenance orders made under section 7 of the Ordinance.

13.  Since such payments had provided satisfactory maintenance for Madam Tam, the 1st respondent is contented to deal with the long term maintenance for Madam Tam under section 4 of the Ordinance.

Madam Tam’s evidence

14.  I now consider the evidence adduced by the parties. Mr Man for the 1st respondent has indicated in his submissions (§9) that the 1st respondent in principle does not object to an order of payment under section 4.  The dispute is whether it should be only for periodic payments under section 4(1) (a) (as contended by the 1st respondent and by the 3rd respondent (as an alternative to its primary contention of no provision)) or it should provide only for a lump sum under section 4(1) (b) (s contended by Madam Tam).

15.  The 1st respondent by the 3rd affirmation of Chan Chui Wa, its Assistant Vice President filed on 17 August 2016 advised that the Estate and Trust together have an estimated net asset value of HK$75.7 million as at 1 August 2016.

16.  Madam Tam is now 93 years old.  She by her 4th affirmation seeks a lump sum order under section 4(1)(b).  She said that her application for a lump sum is well founded in law.  She produced an English medical certificate by Dr Chris K Y Wong, a cardiologist and a Chinese medical certificate by a Chinese Traditional Medical Practitioner, Mr Chung Chau Nang (鍾守能醫師).  The certificates are couched in general terms and opined that Madam Tam may expect to live for another 10 to 15 years and over 15 years respectively. 

17.  Madam Tam further produced two type-written medical certificates by Dr Wong and Mr Chung in her 7^th affirmation.  The contents of the certificates are as before but Dr Wong’s certificate contains some elaboration.  Dr Wong’s certificate referred to Madam Tam’s cardiac condition and several minor ailments that she had.  It then opined that she could expect to live for another 10 to 15 years without difficulty.

18.  Mr Chung’s certificate said that Madam Tam had a sound mind and good health which were far better than those of the same age.  On the basis of the long term care that Mr Chung had provided for Madam Tam and Mr Chung’s knowledge of her health and on condition that she would continue to receive the medicinal strengthening care provided by traditional Chinese medicine and adopt a tranquil style of living, she could expect to live for another 15 years or more.

19.  In addition to her life expectancy, Madam Tam also said that a lump sum order in her favour would be most proper and appropriate.

20.  Madam Tam then said in her 8^th affirmation that the Deceased in her lifetime had only donated HK$1,000 and HK$60,000 on 9 October 2001 and 9 October 2002 respectively to the 3rd respondent and was thus not very supportive of the 3rd respondent.

21.  She further said that the court, in considering whether to order period payments or a lump sum, should balance the competing interests of the respective beneficiaries and decide what is just in all the circumstances of the case.  On this point, I note that the other beneficiaries named in the third Schedule of the Deed are Madam Tam’s grandchildren.  They have not taken part in these proceedings and are not seeking maintenance by the Estate or Trust.

22.  Madam Tam further referred to clause 31 of the Deed which contains an exhortation by the Deceased to the 1st respondent in relation to the provision of benefit to the 3rd respondent, the Final Repository of the Trust as follows:

“FINAL REPOSITORY

31.   The Trustee in determining to exercise any power given to the trustee under this Deed shall not take into account any interest which the Final Repository may as such at any time have in the Trust Fund and provided the Trustee is otherwise acting under powers it has pursuant to this Trust the Trustee may use such power to exclude the Final Repository from any possible benefit that the Final Repository might as such otherwise have under this Trust except to the extent that Clauses 6(c) or 7(c) has already operated in favour of the Final Repository in relation to the income or capital of the Trust Fund (as the case may be).  It is hereby declared that the inclusion of the Final Repository as an entity which could take an interest in the Trust Fund or the income thereof is only for the purpose of excluding any possibility of a resulting trust to the Settlor in case where no person expressed to be a Beneficiary in this Deed could take a valid interest in the capital or income of the Trust Fund and not with the intention of giving any benefits to the Final Repository.”

23.  Madam Tam thus said that the 3rd respondent’s contingent interest as the final repository of the trust was not a relevant matter for the consideration of the court on whether to make a lump sum order.

24.  Finally, she said that unless the assets in the Estate and Trust are non-cash but income generating, the court should make a lump sum order as a matter of course.

25.  Madam Tam in her 9^th affirmation disagreed that a lump sum order for her would prejudice the 3rd respondent. 

26.  Regarding the wish of the Deceased towards the 3rd respondent, Madam Tam referred to clause 3.2(3) of a Trustee Memorandum (“the Memorandum”) dated 3 December 2003.  The Memorandum is a record of the suggestions of the Deceased to the 1st respondent concerning the administration of the Trust.  Clause 3.2(3) does not only reveal the intent of the Deceased on the distribution to the 3rd respondent, it further shows the Deceased’s wish that a monthly sum be paid to Madam Tam for her maintenance.  The clause states:

“(3) Subject as aforesaid, to hold the balance of the Trust Fund for the Settlor’s mother, Tam Mei Kam (覃美金), while she is alive and make a monthly distribution of HK$70,000 for her use and benefit absolutely and upon the death of the Settlor’s mother, or if she shall not survive the Settlor, then upon the death of the Settlor, to distribute the entire balance of the Trust Fund then remaining to New Horizon Buddhist Association Limited, a company incorporated in Hong Kong, absolutely or if the same has ceased to exist or amalgamated with another institution, then to such other charitable organization as the Trustee shall in its absolute discretion determine.”

27.  Madam Tam also suggested that the wish of the Deceased in clause 3.2(3) of the Memorandum should be read in conjunction with clause 31 of the Deed referred to above.  She said that the Deceased did not intend that the 3rd respondent should be benefited more than the other four beneficiaries of the Trust who are her grandchildren.

28.  Madam Tam also disagreed with the 1st respondent that the multiplier for calculating the lump sum should be taken from the Hong Kong Life Tables.  She said the tables were used in other cases either by the agreement of the parties or for lack of expert evidence.  But she has produced expert medical evidence and the court should rely on them.

29.  She also disagreed with the 1st respondent’s suggestion that an independent expert be appointed to opine on her life expectancy if the court should consider paying her a lump sum.  She said the medical practitioners who provided her with the certificates above-mentioned had declared that they owed their duties to the court.  Hence, they should be accepted as impartial experts.  There is thus no need to appoint an independent expert.

30.  Madam Tam also said that unless there are strong and compelling reasons to the otherwise, the court should order a lump sum.

Madam Tam’s submissions

31.  Madam Tam submitted in her submissions filed on 12 August 2016 that the court must have regard to section 5 of the Ordinance in considering whether to order a lump sum.

32.  Section 5 provides a number of matters for consideration in making an order under section 4.  Section 5(1) provides:

“5. (1) Where an application is made for an order under section 4, the court shall, in determining whether the disposition of the deceased's estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is such as to make reasonable financial provision for the applicant and, if the court considers that reasonable financial provision has not been made, in determining whether and in what manner it shall exercise its powers under that section, have regard to the following matters-

(a) the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;

(b) the financial resources and financial needs which any other applicant for an order under section 4 has or is likely to have in the foreseeable future;

(c) the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;

(d) any obligations and responsibilities which the deceased had towards any applicant for an order under section 4 or towards any beneficiary of the estate of the deceased;

(e) the size and nature of the net estate of the deceased;

(f) any physical or mental disability of any applicant for an order under section 4 or any beneficiary of the estate of the deceased;

(g) any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant.”

Section 5(3) further provides that the court shall have regard to the age of the applicant and the contribution in money or money’s worth by the Deceased towards the needs of the applicant immediately before her death.

33.  Madam Tam further submitted that it was wrong to take into account the contingent or future interest of the 3rd respondent.  The court only needed to pay regard to what was her best interest.  She reiterated her objection to the engagement of an independent expert to opine on her life expectancy. She said she had already tendered medical evidence that was not prima facie critically unbelievable, manifestly defective or prejudicial. 

34.  She further submitted that on the evidence filed, the statutory provisions and the settled legal principles, the court should order a lump sum for her.

35.  She also referred to seven decisions by the Hong Kong courts and English courts.  The decisions of the English courts are on legislation similar to the Ordinance.  These decisions ordered lump sums for the applicants.

36.  However, Mr Man for the 1st respondent submitted that five of the seven decisions involved a spousal relationship between the applicant and the deceased and only two did not involve such relationship.  Mr Man further pointed out that section 3(2)(a) of the Ordinance provided that for a spousal relationship, the reasonable financial provision is such as would be reasonable in all the circumstances for the applicant to receive whether or not the provision is required for the applicant’s maintenance.  However, for a non-spousal relationship, section 3(2) (b) provides that the reasonable financial provision is such as would be reasonable in all the circumstances for the applicant to receive for her maintenance.  Thus the five decisions cited by Madam Tam that involved spousal relationships are not relevant.  I agree with Mr Man and would consider the two decisions that do not involve a spousal relationship.

37.  The first case is Negus v Bahouse, [2007] EWHC 2628 (Ch), [2008] 1 FLR 381.  The applicant in this case claimed maintenance not as a spouse of the deceased.  She had cohabited with the deceased for seven years.  She was very well provided for by the deceased before his death.

38.  The deceased’s estate was estimated at £2.2 million. £225,000 went to his three siblings and the residue went to his son.  He had a pension policy of £459,000 which he had nominated the applicant to receive half of it and the other half went to his son.  He had a Spanish house that also went to them in equal shares.  The house that was the residence of the applicant and deceased was valued at £290,000.  The applicant was aged 50 but was not expected to be able to obtain employment again.  She claimed a need of about £39,000 a year without holidays or housing.  The deceased’s son was the only competitive interest.

39.  The executors of the deceased’s will were the son and the deceased’s first wife.  Judge Roger Kay, QC found that the deceased’s family had become somewhat resentful and antagonistic towards the applicant after the deceased’s death.  This suggested a clean break (§102). 

40.  The applicant had invested the pension funds which produced an income of about £20,000 a year. 

41.  Judge Roger Kay, QC awarded the house to her plus a lump sum of £40,000 for refurbishment.  The learned judge also adjudged her income need at around £38,000 a year having regard to her lifestyle during the cohabitation. Given her £20,000 a year income, the shortfall was £18,000 a year.  The sale of the Spanish house would give her another sum of £110,000.  The shortfall of her annual income need would be reduced to £13,000 a year.  The learned judge gave her another lump sum of £200,000 to cover this. 

42.  The applicant was thus awarded the house and a lump sum of £240,000 in addition to half of the pension funds and half of the Spanish house given to her by the deceased.  The estate left to the son was at about £1.7 million.  This was a clean break.  The poor relationship between the applicant and the executors and competing beneficiary favoured a clean break.     

43.  The next case is Kenneth Paul King v James Dubrey & Ors [2014] EWHC 2083 (Ch), [2014] WTLR 1411.  The applicant claimed the house of the deceased as a donatio mortis causa and a claim for maintenance under The Inheritance (Provision for Family and Dependents) Act 1975.  He succeeded in the claim of donatio.  The court further held that if necessary, he would have been awarded a lump sum of £75,000. 

44.  The applicant took care of his aunt, the deceased from 2007 to 2011 when she died.  Before her death, she paid for his board and lodging and any expenses incurred.  He was dependent on her for money and she gave him relatively small sums as pocket money.  Deputy Judge Hollander, QC held that he was a dependent of the deceased before her death. 

45.  The applicant was 58 years old at the trial and was unlikely to get much further employment.  He had no significant assets or home apart from the property in question.

46.  The deputy judge considered the relevant factors at §66 of the judgment and made his decision at §67:

“[66] In assessing the s3 factors I have in mind the following: (1) the benefit in money’s worth received by Mr King was relatively modest: he used a room in the property and had his food and expenses paid plus small amounts of money (2) although I have found that there was an assumption of responsibility and it followed a settled pattern, it is right to have in mind that the maintenance had only lasted four years at the time of June’s death, which is a factor stated to be relevant by s3(4)(3) it was suggested by counsel for Mr King that an appropriate award might be enough money to enable him to purchase a small flat in the area, which could cost £100-150,000 (4) in view of the above, I think that is a greater sum than is justified by s3(5) Mr King needs money to live; he has no income and limited prospects and if he does not succeed to the property he has no accommodation (6) there is no other applicant under the 1975 Act (7) the sole significant asset in the estate is the property, recently valued at £350,000 (8) it is not suggested the charities have ‘financial needs’ which can be assessed (9) I do not consider (b)(c)(f) or (g) are relevant.

[67] In all the circumstances, if Mr King had not succeeded on the DMC claim I would have awarded him a lump sum of £75,000.  Mr King is 58, is unlikely to get much further employment, and has no significant assets or home apart from the property.  But a greater lump sum would in my view overstate the dependency under the 1975 Act and, for this purpose, constitute a windfall.”

The 3rd respondent’s submissions

47.  The 3rd respondent has made two alternative submissions. The first submission is that the Will had made reasonable financial provision for Madam Tam.  I have already rejected it above.  The alternative submission is that there should be a periodic payments order under section 4.

48.  The 3rd respondent referred to Madam Tam’s age at 93.  It also referred to Madam Tam’s constant need for medical and hospital care as evidenced by her hospital bills (about HK$1.13 million in 2015) (B-164). It thus questioned Madam Tam’s ability to manage her finance if a lump sum should be given to her.  It further referred to the Deceased’s intent as recorded in the Memorandum that Madam Tam should be provided with monthly maintenance.  It thus submitted that the court should only make a periodic payments order under section 4(1)(a) of the Ordinance.

The 1st respondent’s submissions

49.  Mr Man, senior counsel for the 1st respondent also submitted that the court should order periodic payments.  He gave a number of reasons. For Madam Tam who is aged 93, it would be invidious and inaccurate to assess how much longer she will live.  Furthermore, unlike the case of someone who is say aged 40, for Madam Tam’s seniority, inaccuracy in the estimation will have a disproportionately large effect on the lump sum to be ordered.  There is also no need for a clean break as the Estate and Trust are managed by the 1st respondent which is a professional trustee.

50.  Finally, if periodic payments are ordered, the amount can always be varied under section 8 of the Ordinance to suit Madam Tam’s needs. But there cannot be any variation of a lump sum order.

Madam Tam’s reply submissions

51.  Madam Tam submitted in reply that the 1st respondent had only considered her age and ignored her medical evidence.  She said that the argument of age applied equally to younger applicants.  She further submitted that the difference between an applicant in spousal relationship with the deceased and an applicant not in such relationship, given all the other factors are the same, is that the former may receive a bigger sum in a part payments order or a bigger multiplicand in a lump sum order.  Hence, the seniority of Madam Tam is no bar for a lump sum order.  She further said that on the issue of age, the cases of Negus v Bahouse and King v Dubrey are indistinguishable from her case.

52.  Regarding the issue of clean break, Madam Tam referred to §§36 and 37 of the judgment of the CFA in Raymond Kin Sang Hung v Mimi Kar Kee Wong Hung [2015] 18 HKCFAR 210.  But Ma CJ only referred in those paragraphs to the desirability of applying the clean break principle in ancillary relief proceedings where the parties are at odds with one another.

53.  Madam Tam also referred to In re Besterman (Deceased) [1984] 1 Ch 458 (CA) where the English Court of Appeal held in favour of a widow over a non-human beneficiary.  Madam Tam sought to argue that this case is also analogous to her case.  But Mr Man for the 1st respondent referred in oral submissions to what Oliver LJ said in this case (at 479G to 480C) that for an application for maintenance (under legislation similar to Cap 481), each case must be decided on its own facts.

54.  Madam Tam also submitted orally at the hearing that she wanted a lump sum so that she could buy a flat and a burial ground.  She wanted a flat as she did not want to move house every two to three years.  She wanted a burial ground as she did not want to be cremated after death.

Agreed monthly sum for a part payments order

55.  The parties have agreed that if I should order periodic payments only, the periodic sum should be at HK$207,000 per month at the start subject to agreed annual adjustment for inflation.

Analyses and decision

56.  The estate and the Trust now have about HK$75.7 million. I do not regard the 3rd respondent as a competing beneficiary as it is not a beneficiary of the Trust but the final repository and there is no evidence that is in financial need.  There is in fact no competing beneficiary in this case.  I only need to consider what order of maintenance would serve Madam Tam’s interest the best.

57.  It is clear that Madam Tam does not like the 1st respondent.  This is because of her previous litigation against the 1st respondent on the validity of the Will and Trust and the 1st respondent’s inability to pay her any maintenance at some stage of the litigation.  The fact that all the assets in the Estate and Trust are managed by the 1st respondent is also not to her liking as she considers that the Deceased’s assets should all be given to her. 

58.  However, the 1st respondent is not responsible for creating Madam Tam’s enmity to it. The 1st respondent did not start the litigation.  The suspension of payment of maintenance was ordered by the court for lack of funds then.  The 1st respondent is a professional trustee engaged by the Deceased to manage the Estate and Trust.  There is no reason why I need to achieve a clean break between the 1st respondent and Madam Tam by making a lump sum order just because Madam Tam for her own reasons does not like the 1st respondent. 

59.  If I should order periodic payments at HK$207,000 per month, Madam Tam would enjoy a very stable and comfortable life. All her daily needs will be provided for.  There is no appreciable risk that the total value of the Estate and Trust at HK$75.7 million would be exhausted by the periodic payments and medical expenses during her life time.

60.  However, if I should order a lump sum, there is no power to vary such payment order as section 8 only applies to periodic payments. Hence, if the lump sum payment should be exhausted during Madam Tam’s life time, there would be no more maintenance for her. 

61.  If her medical certificates are reliable, that would mean that she will live to 108 years old and beyond.  A lump sum ordered now might be exhausted well before she would reach such advanced age.  It would be an appalling situation for her to be without maintenance at an advanced age of or over 100.  Her seniority is also of concern as she may not be able to manage properly a lump sum of tens of millions of dollars.  For someone at Madam Tam’s seniority, it is much better to have a generous monthly income and full disbursement of reasonable medical expenses. 

62.  If I should order periodic payments, I do not have to estimate the medical expenses required by Madam Tam on a lump sum basis. Her reasonable medical bills will continue to be paid in full.  This is important as it is probable that her need for medical and hospital care may increase in the years to come.  If I order a lump sum which should be exhausted in her life time, she would then also have to resort to public medical care instead of the private medical and hospital facilities that she may resort to now.

63.  Furthermore, if Madam Tam’s needs should increase in future, there is mechanism in section 8 for variation of a periodic payments order.

64.  Regarding Madam Tam’s oral submissions of her need for a flat and a burial ground, the 1st and 3rd respondents have not been able to respond to them as they were only mentioned in oral submissions and not earlier. As a matter of principle, I should not consider them.  But in any case, I would not consider it right to provide the capital to Madam Tam for acquiring these real properties. 

65.  For the purchase of a flat (which should be comparable to her current residence), the capital required would be between HK$7 and HK$10 million.  Such capital expenditure is unreasonable as it is beyond the reasonable financial provision that Madam Tam is entitled to.

66.  Regarding the purchase of a burial ground, that is not within the meaning of maintenance and outside the scope of section 4.

67.  Having considered the above and deliberated on the matters stated in sections 5(1) and (3) of the Ordinance, I am inclined to order periodic payments for maintenance of Madam Tam.

68.  Finally, I would point out that a periodic payments order is in line with the wish of the Deceased as expressed in clause 3.2(3) of the Memorandum.

69.  If I should be wrong in concluding for periodic payments, I would also not order a lump sum by relying on Madam Tam’s medical certificates. The certificates are couched in general terms.  In opining on Madam Tam’s life expectancy, neither certificate has made any reference to the Hong Kong Life Tables or any government statistics on longevity of people in Hong Kong.  The average longevity of people in Hong Kong is certainly a relevant factor for considering Madam Tam’s life expectancy.

70.  If a lump sum order should be made, I would take up the suggestion of the 1st respondent and direct that there be a report by an independent expert on Madam Tam’s life expectancy.  The expert should conduct comprehensive tests on the health of Madam Tam and give concrete reasons for the opinion.

Order

71.  Now that I have decided to make a periodic payments order, I would adopt the terms agreed by all parties for my order.

72.  I order that no more payment should be made pursuant to my order dated 28 April 2016 from 31^st August, 2016 onwards and this order should cease to have effect on 10 September 2016. 

73.  I further order pursuant to section 4 of the Ordinance:

(1)   Subject solely to adjustment pursuant to paragraph 3 below, a monthly sum of HK$207,000, representing provision for the Madam Tam’s living needs (the “Monthly Maintenance Sum”), shall be paid out of the Estate to Madam Tam.

(2)   The Monthly Maintenance Sum shall be due by the first calendar day of each month (covering the period from the 11^th day of that month to the 10^th day of the following month, both days inclusive), except where the first calendar day is a Sunday or a public holiday, in which case payment shall be due on the following day.  The first payment shall be made on 1 September 2016 (covering the period from 11 September 2016 to 10 October 2016, both days inclusive).

(3)   In recognition of the inflation of expenses, the amount of the Monthly Maintenance Sum shall be increased by 3.5% on the 1st day of September each year.

(4)   Subject solely to the adjustment pursuant to paragraph 6 below, an annual sum of HK$103,500, representing the Chinese New Year special payment (the “CNY Payment”), shall be paid out of the Estate to Madam Tam.

(5)   The CNY Payment shall be due on the 1st day of February each year, with the first payment to be made on 1 February 2017.

(6)   In recognition of the inflation of expenses, the amount of the CNY Payment shall be increased by 3.5% on the 1st day of February each year.

(7)   Subject to satisfactory documentary evidence being provided by Madam Tam (including, in particular, certification by registered medical practitioners that the prescribed treatment and/or medication are appropriate and necessary), the 1st respondent shall pay all reasonable medical expenses incurred by Madam Tam out of the Estate, directly to the relevant hospital(s), medical practitioner(s).

(8)   Costs of the 1st respondent, 3rd respondent and Madam Tam be paid out of the Estate, with the costs of the 1st respondent to be taxed on trustee basis and the costs of the 3rd respondent and Madam Tam to be taxed on party and party basis.

 

 

The applicant appeared in person

Mr Bernard Man, SC, instructed by Clifford Chance, for the 1st respondent

Ms Pema Fung, instructed by Wong, Shum & Co, for the 3rd respondent