Read the full judgment text of CACV 166/2014 and CACV 239/2014 on BabelCite. This Court of Appeal judgment was delivered on 18 April 2019 before Kwan VP, Cheung JA and Au JA.
Probate – resulting trust – will validity – testamentary capacity – Chinese customary adoption – i-tze (義子) – femme sole – admissibility of new evidence on appeal – costs. Two sisters WYL and WYS lived together unmarried and childless throughout their lives, jointly holding PJ Court and bank accounts, with assets originating from their father WYT's construction business. After WYS's death in 2006, dispute arose over the estate of WYS (cash under $350,000 and PJ Court valued under $4 million) and the estate of WYL (who died in 1996). WKY, claiming to be WYL's adopted son, alleged that PJ Court and the joint accounts were held by WYS on resulting trust for WYL and challenged the validity of WYS's 6 June 2006 will appointing their nephew MHC as sole executor and beneficiary; MHC cross-appealed against the finding that WKY was WYL's adopted son. Held, dismissing both appeals: (1) Resulting trust issue – WKY failed to discharge the onus of showing beneficial ownership different from joint legal ownership. The judge was entitled to find on the totality of the evidence (family background, common ownership of resources, the 1995 change to joint tenancy with survivorship, and placing of funds in joint bank accounts) that the sisters were true joint beneficial owners, with the survivor to take the totality. Presumptions are merely evidential tools and unnecessary where there is actual evidence of intention (Stack v Dowden applied); constructive common intention trust analysis (Primecredit Ltd v Yeung Chun Pang Barry) supported the finding. (2) Will validity issue – Testamentary capacity under the three Banks v Goodfellow limbs was established on the balance of probabilities. The solicitor's failure to follow the BMA/Law Society checklist or the golden rule in Kenward v Adams did not invalidate the finding given the medical records showing no cognitive impairment, the doctor's certificate, and the simple nature of the universal will. Choy Po Chun v Au Wing Lun distinguished on facts (testator with dementia and substantial estate with wife, children and grandchildren). Dr Kan's evidence was not given critical weight. Solicitors urged to follow the guidance in Choy Po Chun. (3) Adoption issue – WKY was the adopted son (i-tze / 義子) of WYL within section 2(2)(c) of the IEO, namely an adoption made in Hong Kong in accordance with Chinese law and custom before 1 January 1973. Under the Qing Code section 78, although a femme sole lacks capacity for full adoption to appoint a male successor, the Code expressly recognises the status of an i-tze and imposes no prohibition on a femme sole taking an i-tze by quasi-adoption. Expert evidence supported the finding that WKY was WKY's i-tze. (4) New evidence – MHC could not rely on new documents not produced at trial; requirements of Ladd v Marshall not met. Outcome: Both appeals dismissed; costs to follow the event with WKY paying MHC's costs of CACV 166/2014 and MHC paying WKY's costs of CACV 239/2014, in each case to be taxed if not agreed.
Legal issues: Resulting trust over assets held jointly by the two sisters · Testamentary capacity of WYS in respect of the Will dated 6 June 2006 · Whether WKY is the adopted son of WYL under section 2(2)(c) of the IEO
Outcome: CACV 166/2014 dismissed: WKY's appeal against the rejection of his resulting trust claim and the finding that WYS's will is valid fails. CACV 239/2014 dismissed: MHC's appeal against the finding that WKY is the adopted son of WYL within section 2(2)(c) of the IEO fails.
Cited by 25 cases · Cites 4 cases