Zqa and Others v. Scc (Sued As Executor and Beneficiary of the Estate of the Deceased) and Others
Read the full judgment text of FCMP 63/2017 on BabelCite. This FCMP judgment was delivered on 29 November 2022.
1. This is the trial of an application for financial provision to be made out of the net estate of Mr. SYC (“Deceased”) under the Inheritance (Provision for Family and Dependents) Ordinance, Cap 481 (“IPFDO”).
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FCMP 63/2017 [2022] HKFC 254 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MISCELLANEOUS PROCEEDINGS NO. 63 OF 2017 ___________________
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___________________ Before : Deputy District Judge M. Lam in Court Dates of Trial : 8-10, 16-17 June 2021; 22 October 2021; 2 and 5 November 2021; 10 December 2021 Date of Closing Submissions for the Applicants : 31 December 2021 Date of Closing Submissions for the 1st to 3rd Respondents : 21 January 2022 Date of Closing Submissions for the 4th to 6th Respondents : 21 January 2022 Date of Closing Submissions for the 7th and 8th Respondents : 21 January 2022 Date of Closing Submissions for the Applicants : 4 February 2022 Date of the Joint Schedule of all Parties : 8 March 2022 Date of Judgment: 29 November 2022 _______________________________ JUDGMENT (Financial Provision under Cap.481) _______________________________ Introduction 1.This is the trial of an application for financial provision to be made out of the net estate of Mr. SYC (“Deceased”) under the Inheritance (Provision for Family and Dependents) Ordinance, Cap 481 (“IPFDO”). 2.The applicants make the present application on the basis that they are not named as the beneficiaries under the will of the Deceased and accordingly they should be entitled to financial provision under IPFDO. The first applicant relies on section 3(1)(ix) IPFDO and the second and third applicants rely on 3(1)(v) IPFDO to ask for :
3.At trial, the applicants claim for the entire net estate on the ground that the known value of it is not even sufficient to take the second and third applicants through to their age of majority, let alone completion of full-time education. 4.Neither of the respondents raise any competing claims. Nor do they ask to take into account their financial needs. The Parties 5.The Deceased was a wealthy man who maintained 3 branches of families in Hong Kong. He was diagnosed with terminal liver cancer in January 2014. He executed a will on 18 February 2014 (“Will”). He passed away at the age of 64 on 29 March 2016. 6.There are 3 branches of family related to the Deceased :
7.The Deceased was also survived by his father, the 7th Respondent (“Father”), and, his mother, the 8th Respondent (“Mother”), (collectively, “Parents”). The Father died a few days after the death of the Deceased. Subsequently, the Mother passed away. 8.The 2nd Respondent is the Deceased’s younger brother (“Brother”). He is purely an executor alongside the Eldest Son. He is not a beneficiary under the Will. The First Family 9.The Wife is now 72 years old. She married the Deceased in 1979. The Eldest Son was born in 1983. He obtained his bachelor degree and master degrees in the UK. He returned to Hong Kong in 2007 and pursued part time study for another master degree in Hong Kong. He is now 39 years old. He is a chartered civil engineer and lives with the Wife in an apartment at Bel-Air. The Second Family 10.Madam T was born in 1971 and is now aged 51. She engaged in a romantic relationship with the Deceased in or around 1999. Since 2007, the Deceased had on and off cohabited with her until 2009. Thereafter, they had lived together until the death of the Deceased. The Second Family was financially maintained by the Deceased who provided them with a house for accommodation, vehicle, service of domestic helper and driver. 11.Under cross-examination by the Applicants, Madam T replied that the Deceased used to directly pay the tuition fees for their children as well as to pay her HKD100,000 each month for living expenses. He would pay her extra money for special expenses. She had been a full-time housewife for nearly 15 years until the death of the Deceased. In July 2016, she started to run an on-line business selling teenager’s clothing. Generally the business generates a monthly income of HKD80,000 for her. She stresses that not all of her assets are originated from the Deceased as she had kept her own savings and investments before she met him. 12.The Second Son is now aged 20. He is pursuing university education in the UK. The Second Daughter is aged 11 and studied in an international school in Hong Kong. After the death of the Deceased, Madam T has been solely responsible for their maintenance. The Third Family 13.Madam Z was born in the Mainland in 1982 and is now aged 40. Daughter One and Daughter Two are now aged 12 (born on 25 April 2010) and 8 (born on 6 August 2014) respectively. 14.Madam Z graduated from secondary school in or about 1998 and further studied business and economics in a tertiary institute for more than two years until 2001. After that, she worked in a telecommunications company for several years and then ran a tea house business from 2002 to 2006. 15.She married a man in 2001 but divorced him in 2008. In 2008, she started her intimate relationship with the Deceased, whom she knew was a married man with children. The Deceased purchased a property in Park Island (“Park Island Property”) for her when she was pregnant with Daughter One. She then moved to live in Hong Kong. She later knew that the Deceased had another mistress and had to raise two other families. Background 16.It is common ground or undisputed fact that the First Family and the Second Family (collectively, “Two Families”) had no knowledge about the Applicants nor their relationship with the Deceased until the commencement of the present proceedings save that Madam Z had attended the funeral of the Deceased without disclosing her relationship with him. 17.On the other hand, the Eldest Son was also not aware of the Deceased’s extramarital affairs with Madam T until 2005. He only first met her when the Deceased was hospitalized for treatments of his terminal illness. Thereafter, he met her several times at the hospitals. 18.Since around 2007, the Deceased had cohabited with Madam T. She was the one who took daily care of him after his diagnosis with the terminal illness in January 2014 until his death (“Sick Period”). His health condition fluctuated during the Sick Period. He fell into a coma in 2014. He underwent various medical treatments, including, chemotherapy, targeted therapy, and stayed in hospital from time to time. 19.During the Sick Period, there were a few months that the Deceased was in relatively stable condition and was not hospitalized. He could occasionally attend his work, personal and financial affairs. In 2015, he enjoyed a momentary remission of the cancer. From 21 July to 5 August 2015, he travelled in Europe with the Second Family. From 27 December 2015 to 1 January 2016, he enjoyed a pleasure trip in Singapore with them. He suddenly had a heavy fever and was hospitalized again from 17 March 2016 until his death on 29 March 2016. 20.Shortly after the diagnosis with his terminal illness in January 2014, the Deceased executed the Will on 18 February 2014 which was prepared by a solicitor (“Solicitor Chan”). Under the Will, the Eldest Son and the Brother are the nominated executors. All the respondents except the Brother are beneficiaries. The Applicants are not beneficiaries under the Will. 21.In gist, the Deceased, by the Will, gave :
22.On 25 October 2016, probate was granted to the Eldest Son and the Brother (collectively, “Executors”), who had since been proceeding to the administration of the estate of the Deceased through Solicitor Chan until the commencement of the present proceedings. Since then, the administration came to a halt. The Applicants’ Case 23.It is the Applicants’ case that they had all along been wholly financially supported by the Deceased until his death. Given the Will does not make any financial provisions for them, they are entitled to seek financial provisions to be paid out of the estate of the Deceased under the IPFDO. Procedural History 24.After the commencement of the present proceedings, the Applicants filed and served interrogatories and amended interrogatories on the respondents. On 15 May 2018, the Eldest Son filed his first affirmation which contains, inter alias, the Executor’s Account as at 5 July 2018 to show the size and nature of the net estate of the Deceased. 25.Dissatisfied with the Executors’ answers to the interrogatories, the Applicants commenced separate contempt proceedings against the Executors and asked for an imprisonment sentence be imposed against them. The Executors were found to be in contempt of court and were sentenced to three months’ imprisonment on 31 July 2020. 26.In the appeal brought by the Executors against both conviction and sentence, the Applicants instructed Senior Counsel and junior Counsel to oppose bail and the appeal. By the Reasons for Judgment dated 24 February 2021, the Court of Appeal allowed the appeal by the Executors on the finding of contempt and the sentence. The Honorable Court commented that there being no merits, the Applicants should have refrained from issuing the contempt proceedings or at least conceded the appeal. It was further ordered that the Applicants’ claim in the present proceedings be heard before another judge. This case was consequently listed before this Court. 27.By letter dated 15 April 2021 (“2021 Letter”), the solicitors newly appointed by the Executors updated the size of the estate of the Deceased amounting to HKD9,780,257.4. The same is reflected in the Schedule of Assets and Liabilities of the Deceased submitted by the parties on 7 May 2021. The Executors stress that they have provided, through the retention of a separate probate solicitor, Solicitor Chan, all such information about the size and nature of the estate as and when such become available aiming at disposing the matter fairly. 28.At the pre-trial review hearing on 7 May 2021, all the parties confirmed that their disputes are limited to those set out in the agreed list of issues in dispute and the agreed schedules on non-agreed assets, liabilities and expenses which were helpfully prepared by the parties. This Court also allowed Madam Z’s application and granted her leave to file her fifth affirmation on 10 May 2021 with her Form E exhibited thereto (“Form E”). 29.At trial, all the parties are in general consensus that the value of the estate is no less than HKD12,651,249. Their positions are re-confirmed in the “Joint Schedule of Disputed Issues and Assets” (“Joint Schedule”) which was jointly submitted to this Court after trial on 8 March 2022. 30.On the dispute of the net value of the estate, the Applicants seek to argue that the actual value should be HKD14,211,249. On the other hand, Madam T asks for reimbursements of her alleged payments in settlement of the Deceased’s debts and liabilities in the total sum of HKD2,850,992 (“Alleged Payments”) out of the estate. 31.Other than Madam T who seeks to claim for reimbursement of the Alleged Payments out of the estate, the respondents have not made any competing claims in these proceedings. They express that they maintain a neutral stance and simply put the Applicants to strict proof of their case. They are not taking an opposition based on their own financial needs but invite the Court to respect the testamentary wishes of the Deceased as required in law. 32.Only Madam Z, Madam T and the Eldest Son (in the capacity of the Executor) gave evidence at trial. The other parties neither filed any affirmations nor gave evidence in court. The Law 33.Sections 3 and 4 of the IPFDO empower the court to make one or more of the orders for reasonable financial provision “if it is satisfied that the disposition of the deceased’s estate effected by will or on intestacy is not such as to make reasonable financial provision for the applicant.” 34.Section 3 (1) of the IPFDO provides that : -
35.The Children claim as the infant children of the Deceased under section 3(1)(v) IPFDO. Madam Z is neither the wife nor a tsip of the Deceased, she can only rely on section 3(1)(ix) IPFDO to apply for financial provisions as a person who immediately before the death of the Deceased was being maintained, either wholly or substantially, by the Deceased. She can prove her case by showing that the Deceased, otherwise than for full valuable consideration, was making a substantial contribution in money or money’s worth towards her reasonable needs as provided in section 3(3) IPFDO. 36.None of the Applicants is a spouse of the Deceased, this Court may, if satisfied that the disposition of the Deceased’s estate effected by the Will, is not such as to make reasonable financial provision for them, make any one or more of the orders for financial provisions under section 4 IPFDO, including periodical orders and lump sum orders, as it would be reasonable in all the circumstances of this case for the Applicants to receive for their maintenance under section 3(2)(b) IPFDO. 37.In the exercise of the power whether to make a financial order under section 4 IPFDO and in what manner, the court must have regard to the matters provided under section 5(1) IPFDO :
38.In addition to the matters specifically mentioned in paragraphs (a) to (g) of section 5(1) IPFDO, this Court shall have regard to the manner in which the Children were being or in which he might expect to be educated or trained under section 5(4) IPFDO. For Madam Z’s claim, this Court should have regard to the closeness of her relationship with the Deceased immediately before his death, the extent to which and the basis upon which the Deceased assumed responsibility for her maintenance, and to the length of time for which the Deceased discharged the responsibility under section 5(5) and (6) IPFDO. 39.In considering the financial resources of any persons, their earning capacity should be taken into account and their financial obligation and responsibilities shall be considered when assessing their financial needs as required under section 5(8) IPFDO. The Court shall have regard to the facts as known to it at the date of the hearing pursuant to section 5(7) IPFDO. 40.When dealing with an application of non-spouse applicants, the type of financial provision is specifically confined by section 3(2)(b) IPFDO to maintenance as it would be reasonable for the applicants to receive in all the circumstances of the case. It is not the purpose of the ordinance to provide legacies or rewards for meritorious conduct. A person still remains at liberty at his death to dispose of his own property in whatever way he pleases. See : In re Coventry, deceased [1980] 1 Ch 461. 41.In order to enable the court to interfere with and reform those dispositions it must be shown, not that the deceased acted unreasonably, but that, looked at objectively, his disposition or lack of disposition produces an unreasonable result in that it does not make any or any greater provision for the non-spouse applicant’s maintenance. 42.It clearly cannot be enough to say that the circumstances are such that if the deceased had made a particular provision for the applicant, that would not have been an unreasonable thing for him to do and therefore it now ought to be done. The court has no carte blanche to reform the deceased’s dispositions or those which statute makes of his estate to accord with what the court itself might have thought would be sensible if it had been in the deceased’s position. See : Tang Tim Chue v Tang Ka Hung Roberts & Anor (unreported) HCMP2506/2009 7 June 2012); Kwan Chi Pun v Lai Hoi Yee [2016] 4 HKLRD 689. The Present Claim 43.It is not in dispute that the Children are the Deceased’s infant children who are incapable of maintaining themselves. Being non-spouse applicants, their application is accordingly confined to the question of what is reasonable for their maintenance. The level at which maintenance may be provided for is flexible and falls to be assessed on the facts of each case. 44.The issues in dispute in this application are set out in the Joint Schedule which are : -
Issue (1) The Relationship 45.I have no difficulty in finding that Madam Z and the Deceased had maintained an intimate relationship to that two children were born respectively in 2010 and 2014. Their relationship was however kept as a secret with much deliberation of both the Deceased and Madam Z during the Deceased’s lifetime. Madam Z confessed that right from the start of their intimate relationship, she knew he was married and had children. Subsequently, she discovered that the Deceased’s children were born to different mothers. 46.Madam Z cannot dispute that Madam T was the one who took care of the Deceased during the Sick Period. Under cross-examination, she admitted that even before the Sick Period, he rarely stayed overnight with her. He did not stay with her during festive holidays. She is ignorant of his finance. She has no idea about the amount of his medical expenses or the size of his wealth. In these proceedings she went at great lengths to conduct investigations in these two aspects, ending up with extensive cross-examination at this trial as well as the contempt proceedings. 47.Madam Z had never been arranged by the Deceased to meet his family members. Nor had she met the Two Families during his lifetime. Under cross-examination, she gave evidence that the Deceased, after notifying her of his terminal illness in January 2014, only visited the Applicants infrequently. Her evidence shows that she knew very little about his health conditions, his treatments or his daily life during the Sick Period. She was unaware of his overseas trips with the Second Family in 2015. She had never visited him when he was hospitalized except for once. That was a few days before his death in 2016. Even for that occasion, she confessed that she could only view him at a distance from outside in order not to be seen by others for fear that her sudden appearance would irritate everyone and adversely affect his health. 48.Eventually, Madam Z admitted that her relationship with the Deceased was kept to a very low profile that only her own family members and close friends in the Mainland were aware of it. The Applicants had never met the Two Families during the lifetime of the Deceased. Although Madam Z attended the funeral of the Deceased, she chose not to introduce herself or disclose her relationship with the Deceased. It was only until the commencement of the present proceedings, the secret relationship surfaced. 49.The evidence demonstrates that the Deceased was avoidant of the exposure of his relationship with the Applicants. He took to his death bed the secret of the Applicants. When diagnosed with the terminal illness from January 2014 onwards, he evidently chose to spend his limited days with Madam T. Even by the time he enjoyed a momentary remission of the cancer in 2015, he elected to travel overseas with Madam T without notifying Madam Z. 50.On the evidence before me, it is apparent that both the Deceased and Madam Z strived to keep their relationship strictly to themselves and to avoid revealing it to the Two Families during his lifetime. Both of them acted jointly and successfully to keep their relationship secret before his death. Pre-Will Assets 51.As to the financial provisions given by the Deceased to Madam Z before the Sick Period, Madam Z gave evidence that when she was pregnant with Daughter One in January 2010, the Deceased wanted her to move to Hong Kong and therefore purchased the Park Island Property for her at HKD4,680,000. Thus, she moved to live in Hong Kong. 52.In August 2012, the Park Island Property was sold for HKD6,830,000 and the sale proceeds together with additional funds provided by the Deceased were used to purchase a property at the Shatin Peak One (“Peak One Property“) of 1,500 sq. ft. in the name of Madam Z for HKD13,000,000. He was responsible for paying the monthly installments of the mortgage (“Mortgage”). Since the purchase of the Peak One Property, she and Daughter One (and subsequently Daughter Two) have been living there until present. 53.The Deceased also purchased a car parking space in joint ownership of Madam Z and him for the use of the Applicants. The Applicants had the service of 2 domestic helpers (until one of them resigned in 2021). He also gave her money for the use and benefits of the Applicants. 54.It is not in dispute that Madam Z had, before execution of the Will, received the following non-cash assets from the Deceased :
Post-Will Assets 55.The documentary evidence shows that after the execution of the Will, the Deceased gave no less than the following sums of money and a brand-new 7-seater family vehicle (“Family Vehicle”) to Madam Z :
56.Apart from the Second 5M, Madam Z did not disclose the details of the Documented Payments other than saying that the Deceased would from time to time give her money ranging from HKD100,000 to HKD600,000 either in cash or by Cheque, and she deposited some of the money into her two bank accounts in her affirmations. Only flimsy bank statements were disclosed. 57.Under cross-examination, Madam Z confessed that the Documented Payments were extraordinary payments for her. The Deceased was not used to give her lump sum payments, let alone to the extent of five millions or several hundred thousands. When pressed on, she said that the Deceased specifically asked her to use the First 5M to settle the Mortgage and to meet expenses, and, to use the Second 5M for investments. 58.The Documented Payments were discovered by the Eldest Son during his executorship. He disclosed them in his first affirmation dated 2 May 2018. It is particularly noted that the First 5M was given to Madam Z by cheque just 3 weeks after the making of the Will. She however was silence on it in all of her affirmations. It was only under cross-examination that she accounted for the details of such payment. No valid explanation on her silence was offered. The only reason (“Alleged Reason”) she gave is that she had provided all her bank statements to her solicitors and was ignorant of the non-disclosure of them. 59.Virtually, Madam Z relied on the same Alleged Reason to answer all the challenges of her non-disclosure of most of her bank statements concerned in this case. I however find it unconvincing. It is her case that she has kept only two bank accounts : one with the HSBC and one with the HSB. Both of them are local bank accounts. She should have no difficulty in retrieving all the bank statements concerned in this case at the start of these proceedings in 2017 or any time thereafter. In fact, she does not deny her possession of such bank statements but just alleges that she did not know her legal representatives had not disclosed them for her. 60.It is unbelievable that Madam Z would not have discovered the omission after filing of five affirmations and has been legally represented throughout the proceedings. Her allegation also runs counter to her application for filing of the Form E in the Pre-trial Review hearing. The said application was premised on the ground that after reviewing the evidence of her case, Madam Z, with the legal advice of her legal team, found it crucial to supplement and put forward all the relevant information and documents pertaining to her claim, including her financial resources and liabilities which are necessary for determination of the present case. 61.The Form E is in prescribed form which specifically requires the affirmant to give full and frank disclosure of all of her financial information and documents, specifically for all of her bank accounts, local and overseas, and to attach all the relevant bank statements thereto. The disclosure is not strictly limited to the period specified but extended to any relevant periods or incidents at present, in the past and in the foreseeable future. 62.Furthermore, the affirmations and Form E were affirmed by Madam Z to set out her financial resources and the financial provisions provided by the Deceased, including, before and after the execution of the Will. It is unpersuasive that she would not have realized the omission of a large amount of the bank statements of her two bank accounts which are directly relevant to her claim. 63.Madam Z could give no valid reason as to why only very limited piecemeal bank statements with broken periods were produced. She only disclosed the HSBC bank statements covering the period from March to October 2014, which recorded her receipt of the First 5M on 6 March 2014 and the repayment of the Mortgage in the sum of HKD4,567,637.34 on 10 October 2014, on the fourth day of the trial, after she was being challenged on her complete silence on the receipt of the First 5M and her lack of proof of the repayment of the Mortgage. Still, insofar as the Sick Period is concerned, she did not disclose the complete set of bank statements of HSBC before that and from November 2014 to March 2016 as well as those of HSB despite queries of the respondents. 64.The Counsel for the Applicants seek to argue that Madam Z’s silence on her receipt of the First 5M on 6 March 2014 was not a deliberation to conceal the fact pointing to the Deceased’s testamentary arrangement for the Applicants. By making reference to paragraph 21 of Madam Z’s first affirmation dated 28 March 2017 (“First Affirmation”), the Counsel contend that Madam Z did mention that the Mortgage was settled by the Deceased even though the date of the settlement of the Mortgage in October 2014 was misdated to March 2015. It is also suggested that the misdate should be regarded as an innocent mistake probably caused by Madam Z’s misreading of the land search record. 65.I am not convinced. Paragraph 21 of the First Affirmation very briefly but specifically says that the Mortgage was fully repaid by the Deceased in March 2015. It is too much of a coincidence that she would have forgotten the date of the repayment of the mortgage of her most valuable asset and coincidently, misdated the repayment of the Mortgage in October 2014 (with the First 5M given to her on 6 March 2014, three weeks after the execution of the Will) to March 2015 (shortly after the payment of the Second 5M). The misdate in effect leads to a confusion of the two payments of half-million being one single payment by the Deceased which was spent for repayment of the Mortgage, leaving the First 5M unnoticed. 66.Under cross-examination, Madam Z accounted in details that the First 5M was given to her specifically for the purpose of settling the Mortgage. She nevertheless placed it into fixed-term deposit and subsequently applied only part of it towards paying off the Mortgage. According to her HSBC bank statements she finally disclosed during cross-examination, HKD5,000,000 was deposited on 6 March 2014 and on 10 October 2014, HKD4,567,637.34 was withdrawn for discharge of the Mortgage. She should not have made mistake or omission on such important fact in her First Affirmation, and, without rectification thereafter. An innocent mistake caused by the land search record tends to be artificial which I do not accept. 67.Under cross-examination, Madam Z disclosed that during the Sick Period, in addition to the Documented Payments, she had additionally received cash payments of HKD100,000 or HKD200,000 each time for 3 or 4 times, totaling HKD500,000 to HKD600,000 (inclusive of the last payment of HKD200,000 around Lunar New Year in 2016 plus some new red packet money), HKD100,000 deposited into her bank in July or August 2014, a cheque of HKD300,000 in November 2015 plus a cheque of HKD600,000 in early 2016 (the latter two cheques, collectively, “Two Cheque Payments”). She reiterated that she was sure that the latter cheques were deposited into her bank accounts notwithstanding that she could not locate the relevant transaction entries in her bank statements available. 68.To take the lesser amount, she received from the Deceased cash payments of not less than HKD1,500,000 (“Non-Documented Payments”) in addition to the Documented Payments of 11,500,000, making up a total of HKD13,000,000 (“Post-Will Payments”) plus the Family Vehicle of HKD468,057 (collectively, “Post-Will Assets”) during the Sick Period. 69.While she claims that such lump sum payments were made under the circumstances that during the Sick period, the Deceased could no longer visit her frequently due to his terminal illness, he therefore changed the manner of making payments for her from regular monthly payments to irregular lump sum payments, she however admitted that those were unprecedented lump sum payments. The Deceased were not used to give her substantial lump sums. She could give no convincing reason as to why the Deceased would have unprecedentedly given her substantial money to the extent of HKD13,000,000 in less than two years. Pre-Will Payments 70.As to the Deceased’s regular monthly payments for her prior to the execution of the Will, Madam Z gave various versions on the amount of such payments. In the First Affirmation, she said that the Deceased was used to give her HKD50,000, settle her credit card payment of about HKD20,000, pay for the household electrical appliances and occasionally the utilities bills, government rent and rates. Besides, he would deposit HKD50,000 into her HSBC account solely for payment of installments of the Mortgage and the premiums of the said two insurance policies. 71.During cross-examination, Madam Z gave several self-contradictory versions : the monthly payments were paid to her by depositing HKD50,000 into her HSB account and HKD30,000 into her HSBC account; the payments were paid by depositing HKD50,000 into her HSB account and HKD50,000 into her HSBC account; the Deceased had settled the credit card payments for her at HKD50,000, making up a monthly total payment of HKD100,000. Besides, she also changed to say that the monthly repayments of the Mortgage and insurance premiums were HKD30,000. She nonetheless gave no definite answer on whether such expenses were included in the regular monthly payments. 72.No convincing explanation for the inconsistencies was offered by Madam Z. Instead, she said that she just happened to remember the real facts all of a sudden at trial. On the other hand, in the middle of cross-examination, she also said that during the adjournment of the trial, she deliberately reviewed all the relevant bank statements at home in order to clarify the matter. When she was asked to clarify these self-conflicting explanations, she was evasive without giving a definite answer. Upon enquiry on those bank statements she referred to, she evasively shifted the subject matter to a post-will payment. 73.After all, Madam Z chose not to produce the relevant bank statements which will be the strong proof of her allegations despite her non-disclosure of them was under attack. Again, she resorted to the excuse of the Alleged Reasons, which I do not accept for the reasons set out above. 74.In the absence of a reasonable explanation for her change of evidence, still less of sufficient documentary proof, I believe that the pre-Will monthly payments given by the Deceased for the living expenses of the Applicants should be HKD70,000. Her memory in court after more than 5 years have passed should not be more vivid and accurate than the time when she made her First Affirmation in August 2017. Testamentary Arrangements 75.In the premises, I believe that the Deceased had wholly or substantially financially maintained the Applicants immediately before his death. I also form the view that the Post-Will Assets were actually testamentary arrangements for the Applicants for the following reasons. 76.First, it is common ground that the Deceased was an affluent person who was keen on financially taking care of his family members. Not only that he raised the Two Families in the past, he also gave assets and lump sums payments to the Applicants, the Two Families, the Parents and his siblings during the Sick Period. In view of the fact that Madam Z was his mistress for years, who was the mother and the primary carer of his two infant daughters, it is highly unlikely that he would have only made testamentary arrangements for all of his family members but leaving Madam Z and their two young children unattended. 77.Second, the documented history of financial provisions for the benefits of the Applicants demonstrates that the Deceased had been financially taking care of the Applicants in the past. Prior to the Sick Period, he provided them with a spacious apartment, a car parking space, a vehicle, insurance policies for investments, life and medical protection. Shortly after the execution of the Will, he started to give them the Post-Will Assets. His intention to financially take care of the Applicants is apparent. 78.Third, Madam Z’s allegations of the Deceased’s continuous financial provisions for the Applicants after May 2015, including the “Two Cheques Payments” as well as his payments in the sums of HKD450,000 and HKD48,000 for the nomination right for a new school for Daughter One in June 2015 (“Nomination Payments”) met with no serious challenges. Absent any evidence to show that Madam Z was stably employed in the years concerned, it is highly unlikely that the Deceased would not have financially supported the Applicants until his death and further, made planning for their future needs. 79.On the evidence before me, I can safely conclude that the Applicants had been wholly maintained by the Deceased immediately before his death. He had all along provided them with free accommodation, transport, education as well as living expenses. There is no reason that he would not have continued such arrangements until his death, and, further, make planning to cater for the Applicants’ future needs. 80.I accept the submission of the Counsel for the Applicants that the Deceased gave financial provisions to Madam Z for the maintenance and benefits of the Applicants on a settled basis immediately before his death. The change of the timing and the manner of payments from monthly payments to irregular lump sum advancements during the Sick Period was due to his terminal illness. The deterioration of his health is evidenced by his medical records and the evidence of Madam T and the Eldest Son. 81.In any event, even if, which I do not so find, the Deceased had ceased making payments for the Applicants after May 2015 as suggested by the Second Family, the Applicants’ claims would not be defeated just because the Deceased was too ill to make the settled financial arrangements. 82.Solely on the Documented Payments, Madam Z admitted that they were unusual and unprecedented payments for her. Upon a close study of what the Deceased had done before and after the making of the will, it is apparent that after the execution of the Will, he had given much more money to Madam Z than before. In view of the timing, manner and amounts of the Post-Will Payments, they were not simply monthly allowances for usual living expenses but a series of payments made under a careful plan catering for the Applicants’ needs in the long run. His plan was not limited to short-term expenses but to cover long-term needs. 83.Just three weeks after the making of the Will, the Deceased gave Madam Z the First 5M, followed by a series of substantial lump sum payments, totaling not less than HKD13,000,000 plus a brand-new family vehicle. She admits that he had never given her such substantial amount of money before. 84.Some payments were given to Madam Z by the Deceased with his expressed specific directions for settling the Mortgage of the residence of the Applicants and meeting expenses with the First 5M as well as for capital for investment with the Second 5M. He also paid for the Nomination Payments and the Family Vehicle. All these are long-term financial planning to satisfy the Applicants’ needs in terms of mortgage-free housing, transport, investment and schooling in addition to living expenses. Indeed, Madam Z can find no justification for such unprecedented substantial financial provisions, the Deceased’s sudden eagerness to pay off the Mortgage or fund her for her own future investments. 85.Merely for the Sick Period between January 2014 and March 2016, Madam Z received from the Deceased a total sum of approximately $13,000,000 in cash. Taking into account of the mortgage repayment of HKD4,567,637, she has retained a sum of approximately HKD8,432,363 plus a vehicle of HKD468,057 in value.
86.By reason of matters set out above, I believe that soon after the execution of the Will, the Deceased had provided considerable financial provisions to Madam Z for the maintenance and benefits of the Applicants, not only catering for the Applicants’ short-term living expenses but also their long-term financial needs. 87.In consideration of the close proximity in time between the diagnosis of the Deceased’s terminal illness, the execution of the Will and the payment of the First 5M (followed by the provision of the remaining Post-Will Assets), of the unusual purposes and the considerable amount of the Post-Will Assets, the poor health condition of the Deceased, I form the view that the Deceased would not have made such extraordinary financial provisions but for testamentary arrangements for the Applicants in contemplation of his imminent death. 88.In parallel to the making of the Will, the Deceased had provided the Post-Will Assets to Madam Z as his testamentary arrangements for the benefits of the Applicants, aiming at financially taking care of them, during his lifetime and after his foreseeable death. That is why he was anxious to pay off the Mortgage in order to provide mortgage-free housing for the Applicants shortly after the execution of the Will as well as to equip Madam Z with substantial capital for her own investment so as to cover their future financial needs and further, to generate incomes to add to their financial resources. 89.Consistent with the background facts, it is the Deceased’s deliberate decision of not incorporating his testamentary arrangements for the Applicants into the Will so as to continue keeping his relationship with the Applicants secret from other family members as he had strived to do throughout his lifetime. Issue 2 90.In ascertaining the financial resources of the Applicants, their current financial status together with their future prospects, including, earning capacity and earnings from investments are relevant. 91.Madam Z is the mother and the primary carer of the two minor Children. They were financially supported by the Deceased during his lifetime. He provided Madam Z with not less than the Pre-Will Assets and the Post-Will Assets for the use and benefit of the Applicants. At present, the Applicants continue living at the Peak One Property, having the use of the car parking space and the Family Vehicle, receiving the service of domestic helper. The Children are still receiving education in a private international school. 92.That being the case, Madam Z claims financial difficulties to a desperate level which required her over these years to surrender her insurance policies, remortgage the Peak One Property and borrow money from her relatives and insurance company. She alleged in her First Affirmation that as at 29 March 2017, she was in serious financial difficulty as her limited savings of around HKD212,874 could only cover the monthly expenditure for the Applicants of HKD151,550 for two months. She therefore intended to seek employment to earn a living. 93.It is her case that she advanced a loan of HKD5,000,000 to a money-lending company, operated by her friend’s husband, Mr. Lam, with the Second 5M in or around February 2015 to earn a monthly interest of HKD40,000 to 60,000 (“First Loan”). 94.In her third affirmation filed on 4 November 2019, Madam Z alleges that in order to get by, she had to :
95.It was only in her fifth affirmation filed on 10 May 2021, she had for the first time disclosed the total worth of her assets at HKD25,445,617 :
96.Apart from the legal costs payable to the Executors on the contempt proceedings, Madam Z now claims to have the following liabilities which bring the net value of her assets down to about HKD19,949,902 :
97.According to the Joint Schedule, Madam Z now admits she has net assets totaling HKD19,949,902 (“Current Assets”) which consist of : properties and monies provided by the Deceased :
98.Having considered all the evidence before me, I share the view with the respondents that Madam Z has not been in financial difficulty as she seeks to portray. Indeed, her wealth is more substantial than she alleges. 99.Solely on cash payments during the Sick Period, she received no less than HKD13,000,000. Taking into account of the settlement of Mortgage of HKD4,567,637, the lump sums received and kept by her should not be less than HKD8,432,363. She however has not painted a full picture of her management of such sums of money. Other than piecemeal disclosure of information, she has not fully accounted for the cashflow and the whereabout of such money, not to mention the interest or income generated thereon. The Two Loans 100.Madam Z alleges to have advanced the First Loan (HKD5,000,000 to Mr. Lam with the Second 5M in February 2015) for the return of a monthly interest of HKD40,000 to HKD60,000. She also says that Mr Lam partially repaid RMB1,000,000 (equivalent to around HKD1,200,000) to her on or around 1 April 2016 and another partial repayment of HKD3,409,000 on or around 19 July 2017. 101.Her allegations do not sit well with her another allegation that she only received interests in the sums of HKD180,000 in August 2015, HKD144,000 in February 2016 and 3 to 4 times of HKD100,000 between June 2016 and January 2017, totaling at HKD624,000 or HKD724,000 between 2015 and 2017. She has neither explained for the underpayment of the interest. Nor has she accounted for the whereabout of the remaining loan of HKD391,000 and the interest generated thereon. 102.Madam Z also says that from the second partial repayment, she settled the Alleged 2017 Payments in July 2017. However, Most of the Alleged 2017 Payments are bare allegations without solid documentary proof as to how the loans concerned were advanced to her by her relatives, her receipt and the use of such loan proceeds, how the alleged dental and medical expenses were incurred and paid, the relevant invoices and receipts. It is also strange that when she got expensive insurance plans, those medical expenses were not covered by the insurance. Similarly, her another allegation that she repaid HKD300,000 to her sister on 30 April 2021 as well as other allegations of loans from her relatives to her are also problematic without concrete documentary proof. The flow of the funds of those alleged loans and the actual use of them remain unaccounted for. 103.Besides, Madam Z says that she advanced the Second Loan of HKD4,000,000 (out of the Re-mortgage) to Ms. Li in February 2019 for the purpose of generating interests at the rate of HKD32,000 per month (being HKD8,000 for every HKD1,000,000). She also says that she collected partial repayment of the Second loan at HKD1,200,000 in November 2019. 104.On the other hand, Madam Z’s Form E and her bank statements for the year of 2020 attached thereto reveal that : -
105.Apparently, the Alleged Second Loan Payments as revealed in Madam Z’s Form E run counter to her allegation of receiving monthly interests of HKD32,000 from Ms. Li. They could not have been the interest paid by Ms. Li as they far exceeded the rate Madam Z claimed to have charged. Likewise, the deposit of HKD400,000 on 26 June 2020 does not fit in her another allegation that the partial repayment was collected in November 2019. Undisclosed Assets 106.In fact, Madam Z’s evidence on her dealings with Mr. Lam or Ms. Li (collectively, “Borrowers”) regarding the First Loan and the Second Loan (collectively, “Two Loans”) is confusing and unsupported with solid documentary proof. Again, her reliance on the Alleged Reasons is unimpressive as explained aforesaid which I should not repeat here. 107.Instead of giving convincing explanations for the lack of sufficient documentary proof, she was evasive and gave contradictory evidence on her dealings with the Borrowers. She could not properly account for how she gave the millions of loans to the Borrowers, how they made payments for the return of principals or interests, not even the dates, the bank accounts, the amounts, the currency of such payments and the flow of the funds of most transactions. She only gave general answers that she usually transacted with them through bank transfers or in cash, and, she often brought the cash back to Hong Kong from the Mainland by herself. 108.In my view, it is impossible that Madam Z could not even be able to account for the basic particulars about those dealings in view of the considerable amounts involved and her frequent transactions with the Borrowers over the years. It is highly unlikely and indeed unusual for a full-time housewife to frequently transact tens of thousands or even millions with the Borrowers in cash by herself by bringing in and out substantial cash between the Mainland and Hong Kong. Such allegations do not sit well with the currency control policy of the Mainland and her allegation of being afraid of leaving home or meeting people since the death of the Deceased. Needless to say, no proper receipts or loan agreements were produced. 109.Under cross-examination, Madam Z finally confessed, for the first time, that she also held bank accounts in the Mainland. When challenged with her silence on this in her affirmations or Form E, she gave self-contradictory explanations. She said she did not disclose them because there was no money in those accounts. When pressed for details about those accounts, she illogically said that she did not have the slightest particulars about them, not even the names of the banks or how many bank accounts she keeps. 110.Upon further cross-examination, Madam Z said that those accounts were cancelled. She knew that because she had “heard” about that. When pressed on, she dramatically said that she had once gone into a bank for an application for opening a bank account “by chance”. Her application was rejected on the ground that she was still maintaining some active accounts with that bank. When asked for the reasons as to why she had not requested the use of those existing accounts or the account details, she ironically answered that the bank refused to disclose them and insisted her to make enquiry with the account-opening branch, but without telling her which was that account-opening branch. 111.Madam Z’s allegations are an affront to commonsense. Apparently, she deliberately concealed her bank accounts in the Mainland. She denied at the beginning but eventually admitted her keeping several bank accounts in the Mainland. She nevertheless said that she could not remember the names of the banks even though she has kept several bank cards and even visited one of the banks. Her allegation of the bank’s rejection of both of her requests for account-opening and the use of her existing account is unbelievable. After all, she refused to name the bank concerned at trial. She also failed to give credible explanation as to why she has not transacted with the Borrowers through banks for years up until now. 112.By reason of matters set out above, Madam Z’s allegations relating to the Two Loans are inconsistent with her bank records she has disclosed. Her evasive attitude and her illogical answers further cast doubt on her credibility and the value of her alleged assets. Under cross-examination, she finally admitted that the amount shown in her Hong Kong bank accounts do not reflect her assets accurately. 113.Moreover, Madam Z’s allegation of financial difficulties does not sit well with what she has done over the years. Despite her repeated allegations of increasing financial hardship, to the extent that her limited bank savings could only cover her monthly expenditure for less than two months and that she could not even afford food and school fees, which necessitated her immediate seeking of employment. 114.The reality is she has not obtained any gainful employment. She continues to live in the Peak One Property, enjoy the use of the Family Vehicle, car parking space and the service of two domestic helpers (until one of them resigned in 2021). Her credit card statements show that within just one month between 26 March 2021 to 25 April 2021, she settled four dining bills at a prestigious hotel in Hong Kong for the purpose of treating her domestic helper, her sister’s family and the Children. She purchased musical instruments which costed approximately her monthly mortgage installment. She bought expensive cakes and arranged the Children to have haircuts at premium salon. 115.Moreover, Madam Z’s non-recovery of the remaining loans advanced to Ms Li and Mr. Lam (in the sum of HKD2,800,000 and HKD391,000 respectively) and her prosecution of the present claim and the contempt proceedings also undermine her allegation of desperately in need of money. In the appeal brought by the Executors against both conviction and imprisonment sentence, the Applicants opposed bail and instructed senior counsel and junior counsel to oppose the appeal. The Court of Appeal allowed the appeal and opined that they should have refrained from issuing the contempt proceedings or at least conceded the appeal. 116.Madam Z once changed to say that, in her Second Affirmation, she cannot work due to depression and the Applicants’ expenses are being met by the HKD3,409,000 repaid to her by Mr. Lam on 19 July 2017, which was dwindled to HKD999,029.72 as of the date of the affirmation, for such repayment of loan was exhausted for monthly expenses of HKD147,760 and the Alleged 2017 Payments. 117.However, such allegations are bare assertions without solid corroborative evidence. As elaborated above, most of the Alleged 2017 Payments are unsubstantiated. Her allegations of lack of employability and of monthly expenses of HKD147,760 are unjustified which I will elaborate further below. She indeed could not justify her spending of HKD2,409,970.28 in around 10 months’ time. 118.I accept the submissions of the respondents that Madam Z has been untruthful about the extent of her financial resources. It was only until being challenged of her settlement of the Mortgage in the middle of cross-examination, she then for the first time disclosed her HSBC bank statements for March to October 2014, still, she chose not to disclose other bank statements concerned despite protest. Other than the very limited bank statements disclosed, her funds kept in her bank accounts and her cash flow, in particular, during the Sick Period, remains unknown. The full extent of her funds from the Deceased remain unclear. I should not repeat the many unidentified transactions and cashflow as set out above. 119.Looking all the evidence in the round, I share the view with the respondents that Madam Z is not a credible witness. She was evasive when being questioned about her bank accounts as well as her cashflow. She very often changed her evidence which would best serve her interest. Her evidence was riddled with inconsistencies. She was too readily to resort to loss of memory when she was challenged with the inconsistencies of her evidence. She withheld important documents despite complaints of her deliberate non-disclosure. 120.Madam Z carries the burden of proof. This court is entitled to resort to take notice of the inherent probabilities and to draw adverse inference against her not only because of her inadequate disclosure but her deliberate decision of non-disclosure. 121.Solely on her own admissions, she has kept bank accounts in the Mainland. By reason of matters set out above, I have solid evidence to believe that she has undisclosed assets of considerable value in the Mainland and in Hong Kong. At any rate, the reasonable inference that can be drawn in all the relevant circumstances is that she has kept substantial undisclosed assets. She concealed them knowing that the disclosure of them will have an adverse impact on her present claim. 122.I also take the view that if, at the end of the day, she could not locate the transaction entries of the Two Cheques Payments in her two Hong Kong bank accounts, HSB and HSBC (she has not made full disclosure of the relevant bank statements in the whole period concerned), such payments should have been deposited into her undisclosed bank accounts, locally or in the Mainland, for she iterated that she was sure that they had been deposited into her bank accounts, bearing in mind there was no solid evidence that those two cheques were Hong Kong bank cheques or that they must be deposited into bank accounts in Hong Kong. Earning Capacity 123.As to her unemployment, Madam Z claims that she could not work due to her poor health. She produced some medical reports compiled in 2018 to prove that she was certified to have suffered from depressive of moderate degree in December 2016. Starting from 9 September 2019, she has been under psychiatric care. 124.That said, Madam Z conceded under cross-examination that there is indeed no solid evidence, still less of medical evidence, which suggests that she has been unfit for work. Her allegations of uncontrollable emotions and fear engaging with the general public also contradict her frequent trips to the Mainland and her outgoing lifestyle of dining at restaurants and hotels, driving and shopping around. 125.At trial, she changed to say that she had made attempts to be engaged in employment as insurance agent and real estate agent but without giving any basic details. She had once worked as a Putonghua tutor for a few months, earning around HKD200 per 1.5 hours. She accepts that she can resume teaching Putonghua to earn a monthly income of not less than HKD8,000 and that the earnings will increase when she gains more experience and students, and, if she works harder. 126.Madam Z is of active working age of 39. She has received tertiary education. She has solid working and business experience. Not only that she is able to derive stable income by investing her available assets, she has concrete social network which enables her to make investments with high returns. She agreed under cross-examination that she is capable of teaching Putonghua earning additional regular income for not less than HKD8,000 per month which will gradually increase. 127.I accept the respondents’ submissions that Madam Z has good earning capacity. According to her own evidence, she has been able to generate income from lending money to her friends and money-lending company. From the First Loan of HKD5,000,000, she generates about HKD40,000 to 60,000 per month. From the Second Loan of HKD4,000,000, she earns not less than HKD32,000 per month, not to mention the undisclosed sources of income of even higher payment of the Alleged Second Loan Payments. 128.Overall, she has been able to invest her money given by the Deceased earning profitable interests. Despite allegedly having been repaid the partial principal of HKD1,200,000 from the Second Loan, she still received the Alleged Second Loan Payments of HKD450,000 in mid-2020. Undoubtedly she has both ability and connections (in the Mainland and in Hong Kong) to generate solid income by herself. Issue 3 129.According to Madam Z’s Form E as adopted in the Joint Schedule, the Applicants’ monthly expenses are as follows :
130.On such basis, the Applicants argue that in terms of the capitalized maintenance from now until the Children reach 18 (before they go abroad for tertiary education) :
131.The Applicants argue that the costs of seeing the Children through to completion of high school in Hong Kong would be in the region of HKD14,280,000. That has not even taken into account of the cost of tertiary education which are likely to increase substantially when they go aboard for their tertiary education as envisaged by the Deceased. They therefore ask for a lump sum order for the entire known value of the net estate be paid to Madam Z for the benefit of the Children. Alternatively, they ask for a periodical payment order be made from the date of the death of the Deceased. 132.In response, it is suggested that the Applicants have failed to prove their alleged monthly expenses. The Children each requires no more than HKD25,000 to HKD27,000 odd dollars per month. The Deceased had already provided sufficient and reasonable financial provisions to cater for their needs. At any rate, Madam Z should bear or share the Children’s expenses. 133.Plainly some of the Applicants’ alleged expenses are unsupported by particulars or documentary proof. For the others, the differences between what are claimed and the receipts produced are noticeable. In cross-examination, the overall theme of questions on the Applicants’ alleged expenses was that they were grossly exaggerated. This Court is entitled to looking at the evidence in the round and applying commonsense even without cross-examination on each and every specific item due to costs-proportionality and time-effectiveness. 134.Having regard to Madam Z’s oral and documentary evidence, the standard of living of the Applicants enjoyed before the death of the Deceased, the extent to which he contributed to the Applicants’ living standards as elaborated above as well as the cost of living in Hong Kong, I observe that the expenses as alleged by the Applicants are excessively inflated. With all the relevant circumstances in mind, I take the view that the reasonable needs of the Applicants should be as follows. 135.Regarding the household expenses, some of the items are not supported with documents and obviously on the high side. The documents regarding utilities, rates and rents came up to a monthly average of around HKD3,676. Even taking into account of mobile phone, internet fees, etc, the utilities (excluding rates and rents which are capital in nature) should be around HKD4,000. 136.As to food and household expenses, Madam Z’s alleged monthly expenses of HKD30,000 is far more than her credit card spending on such expenses at around HKD6,000 to 7,000 (as disclosed in her credit card statements for February to April 2021). Upon enquiry on such inconsistency, she tried to explain that she and her helpers would buy food from the wet market and small shops 5 to 6 times a week and they would pay by cash or Octopus. She estimated that they would spend about HKD800 per trip or HKD1,100 to HKD1,200 if they buy fruits. 137.I do not believe her. Such allegation is inconsistent with her original position that that she relies on credit cards to pay for daily necessities at supermarkets. Madam Z is observed to be a cautious person. She has the burden of proof and she knows that she has to justify her claim in her affirmation and Form E. There is no valid reason why she would not have provided sufficient particulars or documentary proof in support of one of the major items of her claim. In view of a small family of three, I take the view that the monthly expenditure for food, household expenses, electrical appliances and repair should not be more than HKD9,000. 138.I observe that the monthly car expenses should be around HKD5,300 having regard to her credit card spending on petrol plus the reasonable costs of petrol, license renewal, insurance, parking, tunnel fees and repair. 139.As to Madam Z’s personal expenses, her insurance premia should be HKD2,237 (USD3,441/ 12 x 7.8) instead of HKD2,800. The fact that she would have spent a monthly sum of HKD1,000 on clothing, HKD1,000 on personal grooming, HKD2,000 on holiday does not sit comfortably with her allegation of financial difficulties and in any event, is on the high side. Her medical and dental expenses of a monthly sum of HKD1,000 are not justified in view of her medical insurance protection in the past and the change of receiving medical treatments from public hospital recently. Taking into account of all relevant matters, her reasonable expenses should be reduced. 140.Mortgage loan repayment of the Remortgage should not be included as maintenance. Not only that the landed property was originated from the Deceased free of mortgage, it is a capital investment under her sole name. 141.The Children are full-time students. Most of their expenses as alleged are on the high side and some are without documentary proof. Amongst, only part of the alleged expenses for extra-tuition and extra-curricular activities are supported with documentary proof. At any rate, the children should not be overburdened with too many extra tuitions or extra-curricular activities. Prudent selection according to the Children’s interest, ability and time is necessary. It is in fact Madam Z’s case that the Deceased’s decision of arranging Daughter One to change from the traditional main stream school to international school in 2015 was aiming at providing the Children with a more relaxed and care-free life. The reasonable expenses on these two items should not be excessive. 142.Insurance premia of HKD7,300 for each of the Children cannot be regarded as reasonable maintenance. The policy statement in the Form E shows that they are for savings, rather than expenses. 143.There is no evidence to indicate that the Children need constant medical treatments to the extent Madam Z now claims. The receipts provided do not support constant medical treatments in the foreseeable future. The alleged expenses on books, stationary, clothing, shoes, entertainment, presents, holidays are on the high side which should be adjusted downwards to a level that is in commensurate with their background and living standard. 144.In fact, Madam Z’s alleged living expenses and living standard are unsupported with sufficient proof and, indeed, far exceed the living standards provided by the Deceased during his lifetime as elaborated aforesaid. Having considered all the relevant evidence before me, I am of the view that Madam Z has grossly inflated the expenses of the Applicants. The reasonable living expenses should be as follows :
145.As to the Applicants’ further argument that the Deceased should have maintained the Applicants at a standard not falling below to that of the Second Family, it is unmeritorious bearing in mind that the Applicants are non-spouse applicants and their entitlements are limited to reasonable maintenance. The IPFDO does not provide equal distribution of the estate. The fact that the Deceased was rich or that he had provided more financial provisions to other persons, be that during his lifetime or in the Will, is no valid basis to distribute the estate in deviation from the Will to the prejudice of the named beneficiaries. Issue 4 146.It has never been the case for the Applicants that any inter vivo’s transaction of the Deceased is liable to be set aside under the anti-avoidance provisions under the IPFDO. Such position was further confirmed by the Counsel for the Applicants at the Pre-trial Review hearing. 147.The probate work of the Deceased has been entrusted with Solicitor Chan, who had prepared the Will. She has been carrying out investigation of the value of the Estate and no beneficiary has raised objection. There has been no suggestion that she is not impartial or has been negligent or in serious dereliction of her duty as solicitor. I have been told that the client account with the firm of Solicitor Chan maintains a sum of approximately HKD7,683,466, which has remained undistributed since the commencement of the present proceedings. 148.According to the Joint Schedule, all the parties are now in general consensus that the estate is no less than HKD12,651,249. The difference of HKD4,967,783 was made up of : -
149.For completeness sake, it should be noted that the Applicants first raised the issue of unknown bank accounts jointly held by the Deceased with the Wife and Madam T respectively at the Pre-trial Review. At trial, the Wife and Madam T produced the bank records of their respective bank accounts jointly held with the Deceased. The balance of the two accounts at around the time of the death of the Deceased was respectively HKD2,343.13 and HKD10,634.48. Such accounts do not add much value to the estate of the Deceased. The Alleged Payments 150.At trial, the Applicants seek to argue that the actual value of the estate should be HKD14,211,249. The difference between them in the sum of HKD1,560,000 (HKD14,211,249 - HKD12,651,249) is immediately resolved by Madam T’s confirmation that she has mistakenly withdrawn HKD1,560,000 from the Deceased’s HSB bank account shortly after his death and is willing to add back such sum to the estate, resulting in the value of the Estate at HKD14,211,249. 151.However, Madam T does not agree that the net value of the estate is HKD14,211,249. She insists on her entitlement to claim for reimbursements of the Alleged Payments amounting to HKD2,850,992 from the estate. The other respondents are neutral as to the size of the net estate and are willing to defer to the resolution of the dispute between the Applicants and Madam T. 152.The dispute on the net value of the estate is therefore predominantly dispute between the Applicants and Madam T on the Alleged Payments. The dispute focuses on whether Madam T can establish her claim for reimbursements from the estate of the Deceased for HKD2,850,992, allegedly being her payments for settlement of the Deceased’s liabilities as follows : -
153.At the end of the trial, the Applicants also complain that the executors’ costs on account with Solicitor Chan at HKD20,000 as alleged by the Executors are without proof and should not be accepted (“Executors’ Costs Claim”) 154.The Dishonored Cheques Claim involves four cheques allegedly issued by the Deceased from his HSB account. Madam T says that at the request of Solicitor Chan, she made payments for those four dishonoured cheques after the death of the Deceased and is therefore entitled to claim for reimbursement of them at a total amount of HKD423,979 :
155.The Applicants’ challenges are premised on the grounds that there is no document for proof of Madam T’s actual payments for them, that payments relating to the property owned by Madam T or relating to her should not be paid by the estate, that the cheques which were dated closely to or after the death of the Deceased should not be accepted as issued by the Deceased with requisite intention or capability. 156.Having considered all the evidence before me, I accept the Dishonored Cheques Claim for the purpose of ascertaining the net value of the estate for the purpose of these proceedings. First, the Dishonoured Cheques Claim against the estate was made to the Executors through Solicitor Chan no later than the first affirmation of the Eldest Son dated 2 May 2018, in that he verified the making of the claim. Further, the estate of the Deceased has never been subject to any claim by reason of those dishonoured cheques. 157.Second, the copies of the Second Cheque and the Fourth Cheque as well as the returned cheque advice issued by the bank regarding the Third Cheque are produced by the Executors in the trial bundle. According to the debit date of the Third Cheque and the dates of the Second and the Fourth Cheque, Madam T’s allegations that all those cheques were dishonoured and she was requested by Solicitor Chan to settle the outstanding payments of them are believable. I also accept her contention that she settled the payment for the First Cheque for the Deceased as there is no evidence to show that he had paid the monthly management fee for his home for February 2016 according to his established pattern of paying the monthly management fees in the past. 158.Third, the purposes of the four cheques were for the Deceased’s benefits. The first three cheques were for the management fees and the renovation of his home while the Fourth Cheque was to pay his daughter’s school fees. The fact that the house was gifted by him to Madam T does not change the fact that that was his permanent home until his death. He had solid reason to fund the management fees and renovation fees of his home, not to mention that he had always been very generous to Madam T by showering her with a number of landed properties, shares of companies, lump sum payments and substantial interests of his estate under the Will. Moreover, the fact that only the Deceased and Madam T took benefits of those cheques renders Madam T’s allegation more persuasive as no one would have settled the payments for the Deceased other than her. 159.Fourth, although some of the cheques were dated close to or after the death of the Deceased, it is not conclusive that those cheques were signed on the dates as stated on the cheques, it was up to the Deceased to post-date the cheques to a later date as he found fit. Indeed, Madam T’s evidence that he had asked for his cheque book and pre-signed some cheques, especially in view of the upcoming Easter holiday, stood firm under cross-examination. In the circumstances, there is no reason not to believe that those cheques were issued by the Deceased with sufficient mental and physical capacity in the absence of any solid evidence to suggest otherwise. Mere speculation does not justify the Applicants’ complaints. 160.Fifth, it is highly unlikely that someone would have forged the Deceased’s signature for small sums of money while he was dying or after his death. Madam T should not have done so in reasonable contemplation that those cheques might ultimately not be settled on time which would adversely affect her, not to mention the serious legal consequences of forged signature. Besides, she needed not do so as she was able to withdraw money from the Deceased’s HSB Account directly. 161.In the circumstances, I believe Madam T has settled the four dishonoured cheques for the Deceased after his death. A sum of HKD423,979 should be deducted from the estate for the purpose of ascertaining the net estate in these proceedings. 162.As to the Medical Expenses Claim, Madam T asks for reimbursement of HKD2,427,013, allegedly to be her payments for the Deceased’s medical expenses on his behalf from 21 January 2014 to his death. She compiled three tables to substantiate her claim :
163.In reliance on the fact that Madam T had not claimed for reimbursement of such expenses from the estate in the Schedule of Assets and Liabilities annexed to the Grant of Probate until the 2021 Letter, the Applicants seek to argue that Madam T had not paid for such expenses or that she must have already been reimbursed by the Deceased or by an insurance company. 164.Regarding Table I Expenses, the Applicants also complain that the payment documents concerned are either silent on the payer or recorded the Deceased as payer, and plainly, there is no evidence which indicates Madam T was the payer. 165.I accept that for the expenses which were paid with the Deceased’s own credit card and the bills signed by him, there is no reason not to believe that they were paid by the Deceased himself. Madam T concedes sensibly at trial that those sums marked as paid by the Deceased had been paid by him and, thus, withdraws her claim for HKD400,152. 166.As to the remaining amounts totaling HKD675,249, Madam T agrees that the available documents do not show the identity of the payer. Under cross-examination, she admitted that she had in fact combined the medical bills paid by the Deceased’s credit card and those paid by her together. She confessed that she could not even confirm whether those expenses were paid by her or the Deceased. In the circumstances, she fails to discharge her burden of proof. Her allegation of paying the Table I Expenses cannot be accepted. 167.As to the Table II Expenses and the Table III Expenses, I only accept that Madam T has paid a total amount of HKD890,010 for and on behalf of the Deceased. Such payments are well-documented, including the customer copy of her credit card payment signed by her. 168.I reject Madam T’s claim for the remaining sums due to the lack of sufficient evidence. Plainly there is no corroborative evidence for proof of her payments other than her bare assertions. Some of the alleged expenses are simply without any documentary proof, not even the bills or receipts. For those expenses which are supported with bills or receipts, the payers are nevertheless not identified therein. 169.It is Madam T’s case that she submitted the tables with the documentary proof to Solicitor Chan as early as in September 2016 when she was reminded to set out her medical expenses paid for the Deceased. She however had not directly informed the Executors of her claim by that time because she had direct communication with Solicitor Chan. 170.In the circumstances, Madam T should have kept or retrieved from the relevant banks the necessary documents showing her actual payments of the expenses if she had actually settled those payments and intended to claim for them from the estate. I accordingly accept her allegation of her payments of HKD890,010 and her intention to claim for reimbursement of such payments. That is why she has kept the relevant payment records for proof. By the same token, I reject her remaining claim for lack of documentary proof. 171.Counsel for the Applicants also contend that Madam T received a total sum of HKD7,610,000 from the Deceased between December 2013 and March 2016, equivalent to a monthly sum of HKD205,675 in average, which should have covered the reimbursement of all medical expenses. 172.Madam T disagrees. She maintains that her monthly allowance given by the Deceased was usually in the sum of HKD100,000. The various lump sum payments were given to her for special purposes. Amongst these, she spent extra money on special care of the Deceased who lived with her throughout the Sick Period. Other items of special expenses include the demolishment and renovation works of their home resulting from a legal proceeding against her. The two lump sum payments of HKD1,000,000 and HKD500,000 given by the Deceased to her shortly before his death were part of the payments for such purpose. She distinguished those payments from the medical bills she had paid for the Deceased. 173.Madam T also explains that she had not sought reimbursements from the Deceased during his lifetime because he was seriously ill by then and she had been continuously paying the medical expenses for him, such that she decided to defer the request for reimbursements to a later date in order not to trouble him when he was seriously sick. His sudden death was out of her expectation. 174.Madam T’s explanation is logical and consistent with the background facts. Being the close cohabitant of the Deceased taking daily care of him throughout the Sick Period, it is understandable that she would not have intended to frequently burden him with the on-going medical expenses when he was ill. She had no reason to doubt that the Deceased would reject her claim for reimbursements at a later stage. 175.Indeed, the Applicants’ suggestion that the payments for the medical expenses should have been reimbursed by the Deceased or an insurance company are mere speculations without solid proof which I refuse to accept. Merely a one-page request form of an insurance company for certified true copy of medical receipts (without any particulars) does not advance the Applicant’s argument any further. Suffice it to say that Madam T’s explanation that the medical expenses she claims from the estate are independent and separate from those covered by the insurance remained firm and unshaken under cross-examination. 176.The Applicants’ another argument that the money and the wine received by Madam T during the Sick Period would have been more than sufficient to repay what was allegedly owed to Madam T is unjustified with legal or factual basis. They fail to explain how such inter vivo gifts or living allowances can be used to set-off the debts or liabilities owed to Madam T. Executors’ Costs Claim 177.As regards to the Executors’ Cost Claim of the sum of HKD20,000, it was paid by the Eldest Son as costs on account for disbursement for the firm of Solicitor Chan after the grant of probate in August 2016. It is set out in the Executors’ Account appended to the Eldest Son’s first Affirmation. 178.In view of the fact that Solicitor Chan has been retained by the Executors to handle the probate of the Deceased, that the administration of the estate has yet been completed, that such item was not made subject of cross-examination and that the amount is insubstantial and not unreasonable, such amount should not be added back to the estate for the purpose of this case. 179.By reason of matters set out above, I conclude that the net estate of the Deceased should be HKD12,897,260 (HKD12,651,249 + HKD1,560,000 - HKD423,979 - HKD890,010). Issues 5 & 6 180.In view of the fact that the Applicants are not named as beneficiaries in the Will, issues 5 and 6 can be conveniently dealt with together. 181.Generally the wishes of a testator in the manner of disposal of his assets should be respected. That is the personal right of the testator. I nevertheless remind myself of the test of reasonable financial provision for the Applicants is an objective test. In the event that the Deceased had made financial provisions for the Applicants as part of his testamentary arrangements and even subjectively considered that he had already made reasonable financial provisions for them, such arrangements do not debar the Court from making an order for financial provisions for the Applicants under IPFO. 182.In the present application, the Applicants ask for a take-all stance, effectively seeking to set aside the dispositions intended by the Will in its entirety and depriving all the entitlements of the named beneficiaries in the Will. For the discretion to be exercised under section 4 IPFDO, they must show that, looking at objectively, the lack of disposition in the Will produces an unreasonable result, not just that the deceased acted unreasonably. 183.In determining whether and in what manner the court shall exercise its discretion to make an order in favour of non-spouse applicants, the court shall have regard to the factors under section 5 IPFDO in so far as they are limited to provision of reasonable maintenance, not for providing rewards for meritorious conduct nor to procure equality between the parties. Testator’s Wishes 184.Neither of the respondents have made financial disclosure of their own financial circumstances, nor have they asked for their financial resources and financial needs to be taken into account. Even though I accept that the respondents could be regarded as having sufficient financial resources to meet their financial needs, this does not automatically entitle the Applicants to any financial provisions to be paid out from the estate. 185.The principle of testamentary freedom will not be overridden merely because the beneficiaries have not made out a positive case for retention of the benefits which they stand to receive, nor, in a case where the applicant has sufficient financial resources and no financial needs, simply because the estate is a large one. See Ross on Inheritance Act Claims (4th Ed) paras 4-006; 4-008. 186.Proper weight should be given to the Deceased’s reasons for doing what he did. It is not the case that once there is a qualified claimant and a demonstrated need for maintenance, the testator’s wishes cease to be of any weight. See Ilott v The Blue Cross & Ors [2018] AC 545 para 47. 187.As elaborated above, it is obvious to me that the Deceased had his own plan in distributing his assets in anticipation of his imminent death due to his terminal illness. Immediately after the diagnosis of the terminal illness, he executed the Will for the benefits of the First Family, the Second Family and the Parents. Parallel to that, he gave the Post-Will Assets for the interest and benefits of the Applicants. 188.It is my findings that the Post-Will Assets were part and parcel of the Deceased’s testamentary arrangements targeting at providing the Applicants with mortgage-free housing, transport, schooling, investment capital and living expenses to satisfy the Applicants’ future needs. 189.In view of the timing, the nature and the scope of the financial arrangements, the things said and done by the Deceased and the background facts, there could not be a whole series of coincidences but testamentary dispositions of the Deceased when his natural death had become reasonably foreseeable upon the diagnosis of his terminal illness. By that time, he had received various medical treatments, stayed in the hospitals from time to time, fell into a coma for days, suffered from loss of speech and of mobility. 190.As Madam Z stresses that the Deceased loved the Applicants and had all along taken very good care of them during his lifetime, that is impossible that he would not have well prepared for their maintenance in future knowing that his days were numbered. The Post-Will Payments were a series of unprecedented substantial lump sum payments. Her bare assertion that she regards all such provisions as mere “allowances” for defraying expenses at that point in time is far from convincing. 191.The Deceased’s election of giving the Post-Will Assets directly to Madam Z instead of naming the Applicants as beneficiaries in the Will is in line with his determination of keeping his relationship with the Applicants secret. As Madam Z confessed, she knew and actually acted to tie in with his determination to keep their relationship hidden from his family members throughout the years. 192.Coupled with the fact that shortly after the Deceased had told Madam Z about his terminal illness in or around January 2014, he executed the Will and immediately thereafter gave a series of unprecedented substantial payments to her, there is compelling evidence to conclude that he had determined to leave the Applicant off the Will and instead, making financial provisions and distributing his assets to the Applicants by way of separate disposition through Madam Z during his lifetime. That is a deliberate decision and a careful plan when natural death had become reasonably foreseeable to him. 193.The Will recorded his testamentary wishes and accordingly his preferences for the disposal of his estate upon death. In order to enable the court to interfere with and reform those dispositions it must be shown that looked at objectively, the Deceased’s lack of disposition produces an unreasonable result in that it does not make any provision for the Applicants’ maintenance. Reasonable Financial Provisions 194.At trial, the Applicants ask for the entire estate to be paid to Madam Z for the benefits of the Children for they take the view that the estate is not sufficient to cover all their needs and that the claims of the Children should take priority over Madam Z’s claim. 195.In consideration of Madam Z’s own evidence that the Applicants had all along been wholly supported by the Deceased until his death and her assets and monies are originated from him, she, being the registered owner of the Peak One Property, benefits from the settlement of the Mortgage of HKD4,567,637 with the First 5M, which amounts to more than 35.1% of the Post-Will Payments. Together with the Family Vehicle, she gets more than 37.3% of the Post-Will Assets. 196.Having considered all the evidence before me, including, the Applicants’ case that the Deceased had intended to financially take care of all three of them and the interest of the Children should take priority over Madam Z’s interest, the remaining sum of the Post-Will Payments of HKD8,432,363 should be shared equally between the Children, HKD4,216,181 for each child (“Child’s Share”). I believe this is the real intention and actual arrangement of the Deceased. In any event, even looking objectively, such distribution is reasonable in all the circumstances. 197.Taking into account of the reasonable monthly maintenance of each of the Children is HKD30,000, the Child’s Share supports their respective monthly maintenance for more than 11 years 8 months (more than 140 months). 198.Upon payment of the First 5M on 6 March 2014, Daughter One was almost 4 years old (born on 25 April 2010) and Madam Z was still pregnant with Daughter Two (born on 6 August 2014). By adopting a broad-brush approach, and, taking the payment of the First 5M as the starting point for Daughter One and the date of birth of Daughter Two as the starting point for Daughter Two, the Child’s Share should be sufficient to provide reasonable maintenance for Daughter One beyond the age of 15 and Daughter Two beyond the age of 11. 199.It is reasonable in all the circumstances to adopt the broad-brush approach in calculation bearing in mind that the Children can only be provided with a budget to meet their long-term needs. Reasonable budget control and balancing of needs are expected of the primary carer in the long run. 200.It is reasonable to expect Madam Z to properly manage and control the children’s education and living expenses within the budgets, to accommodate their fluctuating expenses and to balance their needs in a reasonable manner throughout the maintenance period. Just pick one of the examples is that there had been no school fees, tuition fees and/ or extracurricular fees when the Children were small. The unused budgets are to set off against other items of expenses and increments. Madam Z’s Claim 201.Madam Z has the benefits of keeping and investing the Post-Will Payments. Other than the Settlement of the Mortgage, rents and rates as well as the monthly living and education expenses of HKD76,500, there is no solid evidence to indicate that she has any other major items of reasonable maintenance. She nevertheless has not fully accounted for the use and flow of funds of the Post-Will Payments save for piecemeal disclosure. 202.Merely on Madam Z’s own share of the assets given by the Deceased amounts to not less than HKD20,799,782, being the current value of most of the Pre-Will Assets plus her 37.3% share of the Post-Will Assets which consist of :
203.Solely on her own admission, the Current Assets which are held or controlled by Madam Z is no less than HKD19,949,902. Such assets afford her repayment of the Re-mortgage as well as living expenses. Her contention that her landed properties are fixed assets which are used as their home and accordingly should not be regarded as a source of funding for expenditures is not justified in law or by facts. Plainly the landed properties are part of her financial resources. She is at liberty to restructure her assets by changing the form or nature of them. Sale and purchase as well as mortgage of property is common in Hong Kong. 204.It is noteworthy that the value of the assets held by Madam Z aforementioned has yet included all of the Child’s Share of both Children which she has not fully accounted for. Even taking into account of the Applicants’ monthly expenses of HKD76,500, she should still keep considerable amount of money over the years. 205.Furthermore, it is my findings that Madam Z owns properties far more than she has disclosed for reasons set out above. She has not fully and frankly disclosed her financial resources. The whereabouts of some of the partial repayments of the Two Loans as well as most of the interests generated therefore remain hidden. The flow of the fund of the Surrender Value of the Policy is unknown. The sources of the Alleged Second Loan Payments are not identified. Her bank accounts in the Mainland are concealed. Most of the Alleged 2017 Payments as well as her alleged subsequent debts owed to her sister are unproved with concrete evidence and unbelievable. 206.In the premises, I have sufficient evidence to believe that she has additional undisclosed assets of substantial value. After all, her non-disclosure gives rise to an adverse inference against her that she has sufficient financial means to maintain herself and to contribute to the expenses of the Children. 207.Apart from her considerable capital assets, I also take the view that she should be able to secure stable incomes. As elaborated above, she has earnings potential beyond her alleged income. She is able to generate HKD8,000 from every million she lends to Ms. Li and HKD8,000 to HKD12,000 from Mr. Lam. Strictly the interests generated from the remaining sums of the Two Loans are more than sufficient to cover the current monthly installment of the Re-Mortgage of HKD15,366 as well as part of her living expenses. 208.Together with her undisclosed interests and incomes generated from the balance of the Post-Will Payments (net of Mortgage and living expenses) as well as her good prospect of entering into the workforce, she should be capable of maintaining herself and contributing to part of the living expenses of the Children. 209.Looking all the matters in the round, I have no hesitation in finding that Madam Z has more than sufficient to maintain herself with her wealth which is originated from the Deceased. She has no difficulties in maintaining her own monthly expenses of HKD16,500, paying the installment of the Re-Mortgage of around HKD15,366 as well as the rents and rates of the Peak One Property, which is solely owned by her. 210.I take the view that upon the Child’s Share being exhausted, Madam Z, being the Mother of the Children with substantial financial resources, should share the financial obligation of raising the Children equally with their father. It is unfair and unreasonable for Madam Z to own substantial assets but look to the estate to wholly raise the Children for her, ignoring her financial obligation to raise her own children, the testamentary intention of the Deceased and depriving the beneficiaries of the standing interest under the Will. 211.I observe that Madam Z is of resourceful financial means and connections. She is of active working age and have good earning capacity. She has the ability to manage and invest her money. After the death of the Deceased, she has been coping with the living of the Applicants without much difficulty, notwithstanding that she has not been gainfully employed and without further funding from the Deceased. 212.Looked objectively, I do not think the Deceased’s lack of disposition for Madam Z in the Will is unreasonable. Nor do I find such decision produced an unreasonable result so as to engage the Court’ discretionary power to intervene under IPFDO. She has more than sufficient financial resources which are originated from the Deceased to maintain herself. It is unreasonable and unjust in all circumstances of the case for financial provision to be made to her out of the Deceased’s net estate. 213.I also take the view that she should contribute to maintain the Children with her considerable wealth or with her capacity in generating more income by investment and by work after the Child’s Share has been exhausted. The Children’s Claim 214.I now turn to consider the application for the Children’s maintenance. The Applicants submit that having regard to the best interest of the minors as the first and paramount consideration pursuant to section 3(1)(a)(i) of the Guardianship of Minors Ordinance, Cap. 13, the Children should take priority over all other beneficiaries and any other considerations should be given less or no weight. 215.While the best interest principle contained in s. 3(1)(a)(i) of the Guardianship of Minors Ordinance, Cap. 13 is of general application in court proceedings relating to the custody and upbringing of a minor, I do not see as to how this statutory provision confers on the Children a special status which automatically takes priority over the other beneficiaries or the privilege of freeing them from the application of section 5(1) of IPFDO and the consideration of the testamentary intentions of the Deceased in a proceedings seeking financial reliefs out of an estate. 216.The IPFDO represents a deliberative legislative choice and one that distinguishes between the more generous financial measure for spouses and all other claimants. In considering the claim of infant applicants, their needs must be considered in the round. Each case will be determined on its own facts. The fact that a claim is brought by an infant child is a vital part of the factual matrix. The manner in which the Children was being or in which they might be expected to be trained is factor to be taken into account in considering what is the reasonable amount and appropriate order of financial provision to the Children under s.5(4) of the IPFDO. This Court is still entitled to look into both of their parents as part of their parental role for financial support. In particular, the Children’s mother is of considerable financial resources. 217.Indisputably the Deceased sought to discharge his obligation towards the Children by providing them with accommodation, transport and living expenses to Madam Z with the Pre-Will Assets and Post-Will Assets. However, the Post-Will Assets are not sufficient to meet their future needs. Further financial provision is required. On the other hand, I do not lose sight of the fact that with the considerable wealth of Madam Z, she should bear equal responsibility for the Children as their mother going forward after the Child’s Share has been exhausted. 218.Having taken into account of all the relevant circumstances, including, the matters set out in section 5(1) IPFDO, the financial resources and the financial needs which the Children have and are likely to have in foreseeable future, the reasonable monthly expenses of HKD30,000 for each child, the common age of completion of full time education (including tertiary education, which will be elaborated further below), the testamentary intention of the Deceased, the value of the net estate and the financial resources and the needs of Madam Z, by a broad-brush approach, I form the view that it would be reasonable in all the circumstances for the Children to receive for their maintenance under IPFDO financial provision out of the estate as follows : -
219.In assessing such amounts, I remind myself that the financial provision for non-spousal applicants should be limited to reasonable maintenance and a fair balance between the Children and beneficiaries, proportionality to the size of the Net Estate and having due regard to the testamentary intention of the Deceased. 220.In so far as tertiary education is concerned, I accept that in the Hong Kong society nowadays, the parents would expect and be more prepared for their children to receive tertiary education so long as they could afford. Financial provisions for tertiary education should be considered as reasonable maintenance for the Children in this particular case. 221.Much is said about the Deceased having told Madam Z that he expected the Children to receive the best tertiary education abroad. She seeks support from the fact that the Deceased had arranged Daughter One to switch from a local kindergarten to an international junior school in Shatin and paid for the Nomination Payments. 222.Madam Z also makes reference to the fact that both the Eldest Son and the Second Son were sent to the UK for tertiary education to illustrate the Deceased’s preference for overseas education over local education for his children. She also contends that as the Two Families enjoy a commensurate, if not higher, standard of living as demonstrated by the facts that the First Family live at Bel-Air while the Second Family live in a standalone house at Windsor Park, the Children are entitled to the same benefits of receiving overseas education. 223.I should start with the principle that the mere existence of a financial disparity or provisions received from the Deceased between the Applicants and the beneficiaries is not a reason for interfering with the testamentary disposition of the Deceased, bearing in mind that the IPFDO was to make reasonable financial provision not to procure equality between the parties : Ross on Inheritance Act Claims (4th Ed) paras 4-028 - 4-029 224.In ascertaining the amount for tertiary education, I accept the respondents’ submission that they should be assessed according to the charges of the local universities for the following reasons. First, Madam Z’s allegation that the Deceased had intended the Children to receive tertiary education overseas is bare assertion without any corroborative evidence. Neither concrete plans nor budgets for overseas tertiary education for the Children is put forward. It is highly unlikely that the Deceased would not have worked out the actual plan and budget for this and provided Madam Z with sufficient funds if he was serious in this matter and had actually discussed with her. 225.Second, upon the diagnosis of the Deceased’s terminal illness, Daughter One was 3 years old and Daughter Two was not born yet. On his death, Daughter One was aged 5 attending kindergarten and Daughter Two was just aged one, they were very young children by that time. It is highly unlikely that the Deceased would have really intended them to receive tertiary education aboard, let alone attend “prestigious universities”, when they have yet started any serious schooling. 226.Third, the fact that the Deceased had arranged Daughter One to change from a traditional kindergarten to an international junior school is not conclusive evidence that he had real expectation, still less of actual plan, to send the Children aboard for tertiary education. It is Madam Z’s evidence that the change to the international junior school was to take advantage of the more relaxed education than the mainstream school education. 227.Fourth, the question of whether the Children should receive overseas tertiary educations depends on various factors, including, their future interest, abilities, the development of the local and overseas education. In light of the very young age of the Children at the death of the Deceased, I do not believe that the Deceased would have expected to send the Children aboard for education in view of the many uncertainties. 228.In reality, the Children have all along been receiving education in Hong Kong, there is no evidence which gives rise to the needs of changing from local education to overseas education for them. It is open for international school students to continue receiving tertiary education locally. 229.In the circumstances, I do not believe that the Deceased had a real intention, still less of a concrete plan, to send the Children aboard for tertiary education. Nor do I find any reasonable need for such arrangement. It is reasonable for them to continue receiving local education. Given there is a wide range of local tertiary education in Hong Kong, the present budgets for school fees are within the range of the overall charges of the local tertiary education which I should adopt for calculation. 230.The respondents have no disagreement on the suggestion that in order to avoid further disputes and troubles for the Executors and the beneficiaries, a reasonable lump sum should be paid out of the net estate into Court for safekeeping and investment for the maintenance of the Children, out of which periodical payments can be made to Madam Z for the maintenance of the Children, and, upon the Children reaching majority, the remaining balance, to be paid to them respectively. By doing so, the Executors can be released from holding the sum in trust for the Children and the beneficiaries and removing the risk of reducing or dissipating of the trust funds by the Executors or Madam Z. Conclusion 231.Having considered the submissions of all the parties and all the evidence in this case, I form the view that HKD3,240,000 should be paid out of the Net Estate of the Deceased for payment for maintenance of Daughter One in the sum of HKD1,260,000 and for maintenance of Daughter Two in the sum of HKD1,980,000. 232.I order that :
Costs 233.Given the outcome of this case and having regard to all the relevant circumstances, I take the view that there should be no order as to costs between the parties. My decision is premised on the fact that there is no overall successful party in this case. The Applicants took a take-all stance. However, Madam Z’s own claim is dismissed and the Children’s claims succeed but only to the extent that the sums awarded are far less than the amounts they claim. 234.Moreover, the Applicants fail some of the arguments and Madam Z, being the sole witness for the Applicants, is found not to be a credible witness in a number of issues in dispute. In the premises, each party shall bear his or her own costs is an appropriate order having taken into account all the relevant circumstances. 235.I accept the submissions of Mr. Wong for the Executors that the Executors have a duty to see to it that the estate is properly administered. The Executors’ executorship engages their duty to the beneficiaries, which prima facie include the duty to participate in these proceedings and to put the Applicants to strict proof, given the Applicants have no legal entitlement to the estate under the Will. The Executors are entitled to be indemnified by the estate as to costs. 236.Albeit interested and joined as beneficiaries, neither the First Family nor the Parents have advanced any positive case or competing claim and the Applicants were simply left to prove their own case. Neither affidavits nor oral evidence was adduced for the First Family or the Parents in their capacities as beneficiaries. 237.As to the Second Family, they have not put forward any competing claims or ask to have their financial needs or financial resources be considered. The dispute between Madam T and the Applicants generally focused on the argument of Madam Z’s claim for reimbursements. Eventually Madam T succeeded in recovering some of those expenses, but not all. 238.Having considered all the relevant circumstances, I make an order nisi that there be no order as to costs between the parties. The Executors and the beneficiaries are entitled to their costs, including all costs reserved, be paid out of the Deceased’s estate, to be taxed on a solicitor and client basis, if not agreed. Certificate for two counsel is granted. 239.This Order Nisi shall be made absolute within 14 days from the date of this Judgment unless either party applies to vary the same by way of summons. 240.I thank all Counsel and Mr. Ng for their assistance.
Ms. Vivien Leung and Ms. Ferrida Chan, instructed by Rowdget W. Young & Co for the 1st, 2nd and 3rd Applicants Mr. Jason Wong leading Ms. Noel Chan, instructed by Krishnan & Tsang for the 1st, 2nd and 3rd Respondents Mr. Ng Man Kin of Messrs. Kwok, Ng & Chan for the 4th, 5th and 6th Respondents Mr. Wong Cheuk Hei, instructed by Messrs. T C Wong & Co for the 7th and 8th Respondents | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under FCMP 63/2017