Chan Oi Kwan v. Chan Fu Wing

CACV 194/2022, [2023] HKCA 625

On Appeal From [2022] HKCFI 941

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 194 OF 2022

(ON APPEAL FROM HCMP NO 2211 OF 2019)

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J U D G M E N T

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Hon Chow JA (giving the Judgment of the Court):

INTRODUCTION

1.The following principal issues arise for determination in this appeal against the judgment (“the Judgment”) of Madam Recorder Rachel Lam, SC dated 13 April 2022:

(1)  whether an inter vivos transfer of a property by a father to his son in the circumstances of this case constituted an “advancement” within the meaning of s 5(1)(c) of the Intestates’ Estates Ordinance, Cap 73; and

(2)  if the answer to (1) is “yes”, whether there was a contrary intention shown that the father did not intend the property to be taken as being paid or settled in or towards satisfaction of the share in his estate which the son would take upon the intestate death of the father.

2.In what follows, unless the context indicates otherwise, references to “section” or “s” shall be to the Intestates’ Estates Ordinance.

BASIC FACTS

3.The late Chan Yuen (“the Deceased”) died intestate at the age of 86 on 13 July 2015 in Hong Kong. His wife (“Madam Lee”) predeceased him in May 2009. The Deceased and Madam Lee had 2 children, namely, the Defendant (elder son) and the Plaintiff (younger daughter). The Defendant and Plaintiff are the only two beneficiaries of the estate of the Deceased. On 6 October 2015, Letters of Administration of the estate of the Deceased were granted to the Defendant.

4.The Deceased used to own 2 properties in Hong Kong, namely, (i) Workshop M on 22/F of Block 1, Kingswin Industrial Building, 32-50 Lei Muk Road, Kwai Chung, New Territories (“the Industrial Property”), and (ii) Flat 4 on 5^th Floor of Block B, Shan Shui Court, 200 Tai Tam Road, Hong Kong (“the Tai Tam Road Property”):

(1)  The Industrial Property was acquired by the Deceased in 2004 at the price of HK$120,000, and owned by him up to the date of his death. It is currently registered in the name of the Defendant as administrator of the Deceased’s estate.

(2)  The Tai Tam Road Property was acquired under the Home Ownership Scheme in 1978 at the price of HK$110,700, and held under joint tenancy by the Deceased and Madam Lee. When Madam Lee passed away in May 2009, the Deceased became the sole owner thereof. On 22 April 2010, the Deceased assigned the Tai Tam Road Property to the Defendant and his wife as joint tenants. On its face, the transfer was done by way of a sale and purchase agreement, the consideration specified in the documents being $1,350,000. There is no dispute that this sum was not actually paid to the Deceased.

5.According to the valuation reports obtained by the Plaintiff in November 2010, the Tai Tam Road Property was worth HK$3.78 million, whereas the Industrial Property was worth HK$1.68 million, as at the date of death of the Deceased (13 July 2015)[1].

6.The Deceased’s estate comprised (i) the Industrial Property, (ii) moneys in 2 bank accounts, in the total sum of about HK$51,000, and (iii) 4,000 shares in HSBC and 6,000 shares in Hang Seng Bank Limited, as set out in the schedule of assets and liabilities attached to the Letters of Administration of the estate of the Deceased, with an estimated total value of HK$3.7 million.

7.The issue in the present case concerns the Deceased’s intention underlying the transfer of the Tai Tam Road Property to the Defendant and his wife in 2010, and the impact that has on the administration of the estate of the Deceased.

8.The Plaintiff’s case is that:

(1)  the transfer of the Tai Tam Road Property constituted an “advancement” to the Defendant within the meaning of s 5(1)(c);

(2)  the Defendant cannot establish that the Deceased had a contrary intention not to include the Tai Tam Road Property in the hotchpot; and

(3)  the Industrial Property should be transferred to her.

9.As summarized by the Judge at §20 of the Judgment, the Plaintiff relies on (inter alia) the following allegations in support of her case:

(1)  Her relationship with the Deceased was good. She often took care of him and had dinner with him, whereas the Defendant rarely cared for the Deceased.

(2)  In or about 2008, the Deceased began to have dementia or Alzheimer’s disease.

(3)  When Madam Lee passed away in 2009, the Deceased was depressed and suffered insomnia. He was not in a good state of mind and required taking care of. She arranged for him to attend a centre for elderly people to provide him with daily meals and activities.

(4)  In July of the same year, she took the Deceased to a family trip in Korea. He left the hotel on his own without telling anyone, and seemed confused when he came back to the hotel.

(5)  In April 2010, when the Deceased assigned the Tai Tam Road Property to the Defendant and his wife, the Deceased was not in a fit state of mind to do so. At various junctures, the Defendant had taken advantage of the Deceased’s low mood and encouraged him to transfer the Tai Tam Road Property to him and his wife.

(6)  In June 2013, during a chat with the Deceased, the Plaintiff learned for the first time that the Deceased had transferred the Tai Tam Road Property to the Defendant. The Deceased told the Plaintiff (in the absence of the Defendant) that since the Tai Tam Road Property had been given to the Defendant, the Industrial Property should be given to the Plaintiff. The Deceased also complained in the same conversation that after Madam Lee passed away the Defendant took away some of her personal belongings such as her jewelry.

(7)  After the Deceased passed away, the Defendant applied for a grant of letters of administration of the estate of the Deceased without notifying the Plaintiff, and the same was granted on 6 October 2015.

(8)  On 19 February 2016, the Industrial Property was transferred into the name of the Defendant as administrator of the estate of the Deceased.

10.The Defendant denies that s 5(1)(c) has application to the transfer of the Tai Tam Road Property to him and his wife, or that the property should be included in the hotchpot, because the Tai Tam Road Property was intended by the Deceased to be an “ancestral home” (“祖屋”) to be passed down from generation to generation in the male lineage of the family. It was with this understanding that the transfer took place to him and his wife in 2010. Thus, the transfer of the property was not an advancement; and in any event there was a contrary intention expressed by the Deceased to the effect that it should not be included in the hotchpot.

11.In support of his case, the Defendant relies on (inter alia) the following matters (as summarized by the Judge at §22 of the Judgment):

(1)  He had a good relationship with the Deceased. He had worked with him in the renovation business all along, and the Deceased had been his mentor. He had assisted in taking care of the Deceased in his later years and ate dinner with him often.

(2)  The Deceased’s mental state in 2008 and thereafter, and in particular in 2010, was good; this was generally the case up to around 2014.

(3)  When the Deceased transferred the Tai Tam Road Property to him and his wife, the Deceased was aware of and in a right state of mind to understand what he was doing.

(4)  By the time the Tai Tam Road Property was transferred to the Defendant and his wife, the Defendant was already in his mid-fifties and living in a flat owned by him with the mortgage fully paid off. He did not need financial support from the Deceased.

(5)  After the transfer, the Defendant and his family continued to reside in their own flat, while the Deceased continued to live in the Tai Tam Road Property until his death.

(6)  He had never heard from the Deceased about any intention to give the Industrial Property to the Plaintiff; rather, it was the Deceased’s intention that it should be shared equally between himself and the Plaintiff.

12.On 29 November 2019, the Plaintiff commenced the present action by way of Originating Summons (HCMP 2211/2019) against the Defendant seeking, inter alia, (i) an order for the transfer of title, and delivery up of vacant possession, of the Industrial Property to her, and (ii) an order that the Defendant be replaced by the Plaintiff as the administratrix of the estate of the Deceased.

THE JUDGMENT

13.The Plaintiff’s action was tried by the Judge on various dates in November and December 2021. The Judge heard the oral evidence of the Plaintiff and the Defendant, being the only witnesses called by the parties at the trial.

14.On 13 April 2022, the Judge handed down the Judgment.

15.In the Judgment, the Judge made the following material findings relevant for the purpose of the present appeal:

(1)  The Plaintiff had failed to establish her various contentions that the Deceased was suffering from dementia or Alzheimer’s disease or otherwise had a reduced mental capacity or was not in a fit mental state to make decisions regarding the Tai Tam Road Property in 2010[2] (this finding of the Judge is not challenged by the Plaintiff in the present appeal).

(2)  The Plaintiff’s account as to her alleged conversation with the Deceased in June 2013 (referred to in §9(6) above) did not occur[3].

(3)  The Defendant was a credible witness. Insofar as his account of his conversations with the Deceased was concerned, taken together with the surrounding circumstances, he was telling the truth as to: (1) the Deceased’s intentions regarding the “ancestral home”, and (2) absence of indication from the Deceased to him that the Industrial Property was to be given to the Plaintiff[4].

(4)  The transfer of the Tai Tam Road Property was not an advancement to the Defendant[5].

(5)  Even if the transfer of the Tai Tam Road Property was an advancement, there was a contrary intention that the Deceased did not intend to include it in the hotchpot[6].

16.In respect of the finding that the transfer of the Tai Tam Road Property was not an advancement, the Judge set out her reasons at §42 of the Judgment, as follows:

“(1) Whilst the value of the property was undoubtedly substantial, whether on its own or relative to the rest of the Father’s assets, this at best sets up the proposition that there may be a prima facie case of advancement or permanent provision.

(2) However, in the circumstances of the present case, the Defendant did not gain the ‘benefit’ during the Father’s lifetime since he did not use the property. He also had no need for the property since he was relatively established in life.

(3) Insofar as his ‘benefit’ upon his Father’s passing, this must be seen in light of the Father’s wish for the home to be passed from generation to generation in the male lineage.

(4) I also note that if one is viewing the analysis through the lens of presumed fairness or equality of provision for both children, then the fact that the Tai Tam Road Property was of substantially greater value than the Industrial Property would further weaken the Plaintiff’s argument. The disproportionately larger value tends to suggest (and I put it no higher than that) that the transfer of the Tai Tam Road Property was not an advancement but for some other purpose, viz. the desire to pass the ‘ancestral home’ to the elder son. (cf. Re Lacon [1891] 2 Ch 482 at 500, 504)”

17.In respect of the finding of a contrary intention on the part of the Deceased that the Tai Tam Road Property should not be included in the hotchpot, the Judge set out her reasons at §44 of the Judgment, as follows:

“For this, I would bear in mind that the focus is on the Father’s subjective intentions and that it is incumbent upon the Defendant to prove as such. The matters I have discussed at paragraphs 32 to 42 above would lead to findings that:

(1) Even if the transfer of the Tai Tam Road Property was an advancement by the Father, he had expressed a contrary intention that the ‘ancestral home’ was to be treated separately from the rest of the estate;

(2) There was no expressed intention on the Father’s part that the Industrial Property was to go to the Plaintiff; and

(3) It may be inferred that the intent was that the remainder of the assets, including the Industrial Property, were to be equally shared.”

18.The Judge also rejected the Plaintiff’s application that the Defendant should be replaced by her as the administratrix of the estate of the Deceased.

19.Accordingly, the Judge dismissed the Plaintiff’s action with costs to the Defendant.

THE PRESENT APPEAL

20.The Plaintiff was not satisfied with the Judge’s judgment concerning the application of s 5(1)(c) to the transfer of the Tai Tam Road Property and lodged an appeal against it. In the Plaintiff’s Notice of Appeal dated 10 May 2022, the Plaintiff advances 4 substantive grounds of appeal:

(1)  The Judge was plainly wrong and palpably erred in finding that the Tai Tam Road was an “ancestral home” (§2 of Notice of Appeal).

(2)  The Judge erred in holding that the transfer of the Tai Tam Road Property to the Defendant and his wife as joint tenants was not an “advancement” under s 5(1)(c) (§3 of Notice of Appeal).

(3)  Further or alternatively, the Judge overlooked that the transfer of the Tai Tam Road Property was a “settlement” made by the Deceased for the benefit of the Defendant which had to be accounted for under s 5(1)(c) (§4 of Notice of Appeal).

(4)  The Judge erred in holding that there was a contrary intention that the Deceased did not intend to include the Tai Tam Road Property in the hotchpot (§5 of Notice of Appeal).

DISCUSSION

(i)  The hotchpot provision

21.The Deceased died intestate leaving issue (ie the Plaintiff and Defendant) but no wife. Accordingly, the residuary estate of the Deceased is held on the statutory trusts for the Plaintiff and Defendant in equal shares under ss 4(5) and 5(1)(a).

22.Under s 5(1)(c):

“where the property held on the statutory trusts for the issue is divisible into shares, then any money or property which, by way of advancement or on the marriage of a child of the intestate, has been paid to such child by the intestate or settled by the intestate for the benefit of such child (including any life or lesser interest and including property covenanted to be paid or settled) shall, subject to any contrary intention expressed or appearing from the circumstances of the case, be taken as being so paid or settled in or towards satisfaction of the share of such child or the share which each child would have taken if living at the death of the intestate, and shall be brought into account, at a valuation (the value to be reckoned as at the death of the intestate), in accordance with the requirements of the personal representatives”.

23.Section 5(1)(c) is based on s 47(1)(iii) of the Administration of Estates Act 1925 (which consolidated the Law of Property Act 1922 and the Law of Property (Amendment) Act 1924), and replaced the requirement to account in respect of advancement by portion to children under the Statute of Distribution 1670. There is no dispute that English and other Commonwealth decisions on the interpretation of s 47(1)(iii) of the Administration of Estates Act 1925 (or its equivalence in other Commonwealth jurisdictions) are relevant to the true interpretation of s 5(1)(c). It is also clear from the jurisprudence concerning s 47(1)(iii) of the Administration of Estates Act 1925 that cases on the Statute of Distribution 1670 are still considered relevant to the true construction of that subsection (see Sherrin and Bonehill, The Law and Practice of Intestate Succession, 2^nd Edn (1994), at pp 265-266). We mention this because, in the course of his submissions for the Plaintiff, Mr But has sought to rely on the Chinese translation of the provision in aid of his argument on the construction of the subsection. In our view, having regard to the historical origin of s 5(1)(c), the Chinese translation of the text can provide no assistance to the true construction of that subsection. In any event, we do not find Mr But’s reliance on the Chinese translations of various expressions or phrases in s 5(1)(c) to be helpful or persuasive.

24.The principles governing the interpretation and application of s 5(1)(c) (sometimes referred to as the “hotchpot” provision or rule) have been succinctly set out at §§10-13 of the Judgment which have not been challenged by Mr But in this appeal. For ease of reference, we set out below those paragraphs of the Judgment:

“[10] The rationale for this rule is to achieve equality amongst the children of the intestate, based on the presumed intentions of a parent in favour of such equality. However, since a parent might clearly wish to prefer one or more of their children over the others, this statutory rule is subject always to any contrary intention expressed: Annotated Ordinance of Hong Kong: Intestates’ Estates Ordinance (Cap. 73) at §5.16. In this regard, the operation of s.5(1)(c) of the IEO is analogous to the equitable presumption against double portions, under which a donor is rebuttably presumed not to have intended to give two portions to the same donee absent contrary indication: Re Cameron (deceased) [1999] 2 All ER 924 at §59 per Lindsay J.

[11] Two elements have to be made out before a child of the intestate would be required to account for an advancement under s.5(1)(c) of the IEO.

[12] First, the plaintiff who alleges advancement bears the burden of proving an ‘advancement’ within the meaning of s.5(1)(c):-

(1) An ‘advancement’ cannot be a mere casual payment. That said, it is not narrowly confined to gifts establishing a young person in life, or in the case of an older person, as meeting some particular need such as expansion of his business or money required to buy out the share of a deceased or outgoing partner. Instead, an ‘advancement’ includes ‘anything which may fairly be described as a permanent provision’ for the intestate’s child: Hardy v Shaw [1976] 1 Ch 82 at 87-88 per Goff J (as he then was), commenting on s.47(1)(iii) of the Administration of Estates Act 1925 (‘AEA’).

(2) The fact that the subject matter being transferred is substantial in value, both when looked at absolutely and relatively with regard to the intestate’s whole estate, is a factor which points in favour of the subject matter being an ‘advancement’ absent any other evidence of intention: Hardy v Shaw (supra) at 88-89; cf. In re Hayward [1957] Ch 528.

(3) In the context of the equitable presumption against double portions, the Court, in deciding whether a gift is a ‘portion’ of the estate, would likewise consider the donor’s intention, the size of the gift, as well as the purpose for which and the circumstances under which the gift is given: Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (21^st Edn) at §§66-22 – 66-23; cf. Re Cameron (deceased) [1999] 2 All ER 924.

[13] Second, once this has been proved, the onus then falls upon the defendant to prove that the deceased had a contrary intention:-

(1) The test in this regard is not objective – that is, if the intestate had thought of everything, what his or her intention would likely have been. Instead, the test is subjective, that is: looking at all the circumstances, do they require an inference that the intestate’s intention was that the gift should not be brought into hotchpot? This requires the Court to decide whether the facts as a whole indicate an intention on the intestate’s part not simply to anticipate the provision the defendant would get on the intestate’s death, but ‘an intention and desire to prefer [the defendant] to the plaintiff not only in point of time but in point of the amount and nature of that provision’: Hardy v Shaw (supra) at 89.

(2) Unless the defendant discharges his onus of proving such contrary intention, the statutory hotchpot under s.5(1)(c) is mandatory: Hardy v Shaw (supra) at 87.”

(ii)  Ground (1) - “ancestral home”

25.Under Ground (1), the Plaintiff contends that the Judge was plainly wrong to find that the Tai Tam Road was an “ancestral home”. In support of this ground of appeal, Mr But argues:

(1)  An “ancestral home” is, by common understanding, a home provided by (or dedicated to) the remote ancestor or predecessors of the family, usually lineal male descendants, and is usually being held by trustees/managers through a “customary trust” (ie Tong/Tso) to be passed on from generation and generation, as commonly found in indigenous villages in the New Territories.

(2)  The Tai Tam Road Property could not or should not be treated as an “ancestral home” because -

(a)  it was not acquired or inherited by the Deceased from the lineage of his remote ancestors and/or for any special purpose (such as worship), but was acquired by the Deceased and Madam Lee under the Home Ownership Scheme as joint tenants in 1978 and used as their matrimonial home;

(b)  there was no evidence of any (mutual) wills executed by the Deceased and Madam Lee with respect to the disposition of Tai Tam Road Property upon their demise;

(c)  the Deceased transferred Tai Tam Road Property in favour of the Defendant and his wife as joint tenants, meaning that if the Defendant should predecease his wife, the whole property would pass to his wife, not the Deceased’s lineal male descendants;

(d)  the Tai Tam Road Property was conveyed to the Deceased/Madam Lee and subsequently the Defendant/his wife as absolute owners, and there was no evidence of any trust arrangement or other forms of conditions/promises imposed on the Defendant to “ring-fence” the property and prevent the Defendant (or his wife) from disposing of the property and to ensure that it would be passed on as “ancestral home”; and

(e)  the Defendant and his wife did not acknowledge any right on the part of the Plaintiff, also a child of the Deceased, to occupy or otherwise enjoy a portion of the rental proceeds (if any) of the Tai Tam Road Property.

26.The short answer to this ground of appeal is that the Judge did not make any finding that the Tai Tam Road was an “ancestral home” as alleged in §2 of the Notice of Appeal. What the Judge found was that it was the Deceased’s intention to treat the Tai Tam Road as the “ancestral home”. Further, as held by the Judge at §39(6) of the Judgment, the Deceased’s understanding of “ancestral home” was that of a layman, and one ought not to approach the evidence on the Deceased’s intention and state of mind with unduly technical understanding of the law regarding the holding of property. It is nothing to the point that the Tai Tam Road Property could not strictly be regarded as an “ancestral home” as that concept is used by indigenous villagers in the New Territories or understood under Chinese custom or customary practices. The Defendant’s evidence was that all along the Deceased intended the Tai Tam Road Property to be held as the “ancestral home” instead of being a personal property, and wished it to be passed down from generation to generation in the male lineage[7]. In our view, it was open to the Judge to accept the Defendant’s evidence as regards the Deceased’s intention and wish as aforesaid[8].

(iii)  Ground (2) - “advancement”

27.Under this ground, Mr But argues that the gift of the Tai Tam Road Property to the Defendant and his wife was an advancement for the following reasons:

(1)  the Tai Tam Road Property, which was worth about HK$3.78 million as at the date of death of the Deceased, was substantial in its absolute and relative value (compared to the value of other assets comprised in the estate of the Deceased);

(2)  the Defendant and his wife did not make any payment to the Deceased as consideration for the conveyance; and

(3)  the Deceased passed an absolute title and interest in the Tai Tam Road Property to the Defendant and his wife, and they are entitled in law to use and deal with the property in any manner that they wish, including disposing of the property, and are at liberty to depart from the Deceased’s “hope” that the property be treated as the ancestral home of the family.

28.The Judge was well aware of the matters relied on by Mr But referred to in (1) and (2) above: see §§27(2), 30 and 42(1) of the Judgment in respect of the former, and §§6(2) and 39(3) of the Judgment in respect of the latter. In respect of the matter referred to in (3) above, ie that the Tai Tam Road Property was transferred to the Defendant and his wife absolutely without the imposition of any “trust” that it should be held as the “ancestral home”, the Judge commented that the Deceased’s understanding of “ancestral home” was that of a layman and one ought not to approach the evidence on the Deceased’s intention and state of mind with unduly technical understanding of the law surrounding the holding of property. While the matters relied upon by Mr But are, or may be, relevant to the question of whether the transfer of the Tai Tam Road Property constituted an advancement to the Defendant, they are by no means conclusive. In our view, it was open to the Judge, for the reasons given in §42 of the Judgment (see §16 above), to find that the transfer of the Tai Tam Road Property was not an advancement to the Defendant.

29.Mr But next argues that the Judge took into account the following irrelevant considerations and/or placed undue and unreasonable weight on them:

(1)  that the Deceased remained in occupation of the Tai Tam Road Property during his lifetime, and the Defendant did not gain any benefit out of the property during the Deceased’s lifetime;

(2)  that the Defendant was “relatively established in life” (which Mr But says is by no means fatal to the gift being an advancement in light of the overall circumstances); and

(3)  that the Tai Tam Road Property was transferred to the Defendant and his wife with a “hope” that the Defendant would preserve and “pass it on” (which Mr But says does not take the gift out of the scope of an advancement).

30.In our view, these matters are relevant to a proper consideration of whether the transfer of the Tai Tam Road Property was an advancement. We also do not see any sufficient ground or basis to hold that the Judge placed undue or unreasonable weight on them in making her finding that the transfer was not an advancement.

31.Lastly, Mr But argues that if one views the matter through the lens of presumed fairness (or equality) as the Judge did, the Deceased would have intended the gift to be an “advancement” so that the Plaintiff would inherit the whole legal and beneficial interest in the Industrial Property to achieve maximum degree of fairness and equality between the Plaintiff and the Defendant. Also, if the Deceased intended to prefer the Defendant by gifting the Tai Tam Road Property to him, it would reinforce the notion that the gift was a “permanent provision” by the Deceased to the Defendant and was thus an “advancement” in favour of the Defendant, instead of negating it.

32.This argument was considered by the Judge at §42(3) of the Judgment. The Judge took the view that “the disproportionately larger value [of the Tai Tam Road Property as compared to the Industrial Property] tends to suggest …. that the transfer of the Tai Tam Road Property was not an advancement but for some other purpose, viz. the desire to pass the ‘ancestral home’ to the elder son”. This is a view which was open to the Judge to take. Once it is accepted, as the Judge did, that the Deceased intended the Tai Tam Road Property to be treated as the “ancestral home” and the Defendant (and his wife) to pass it down from generation to generation in the male lineage, the argument that, in order to achieve fairness or equality, the Deceased would have intended the gift of the Tai Tam Road Property to be an advancement so that the Plaintiff would inherit the whole legal and beneficial interest in the Industrial Property, loses force.

33.Overall, we are of the view that, on the facts as found by the Judge, her finding that the transfer of the Tai Tam Road Property by the Deceased to the Defendant and his wife was not an advancement was one which was properly made by her. We see no sufficient ground or basis to disturb this finding by the Judge. Accordingly, Ground (2) of appeal is rejected.

(iv)  Ground (3) - “settlement”

34.Under this ground, Mr But argues that the Judge erred in overlooking that the transfer of the Tai Tam Road Property to the Defendant and his wife, even if it was not an “advancement”, ought to be regarded as a “settlement” by the Defendant in favour of the Defendant which thus has to be accounted for under s 5(1)(c).

35.The relevant part of s 5(1)(c) states as follows:

“… any money or property which, by way of advancement or on the marriage of a child of the intestate, has been paid to such child by the intestate or settled by the intestate for the benefit of such child (including any life or lesser interest and including property covenanted to be paid or settled) shall … be taken as being so paid or settled in or towards satisfaction of the share of such child or the share which each child would have taken if living at the death of the intestate …” [emphasis added].

36.This ground of appeal can be disposed of shortly. It is based on a mistaken understanding or reading of s 5(1)(c) that, besides a payment or transfer of property by an intestate to his/her child (i) by way of “advancement” or (ii) “on the marriage” of the child, any “settlement” of property in favour of a child of an intestate would be caught by the hotchpot provision. There is no warrant for any such reading of s 5(1)(c). As mentioned by the learned editors in Hardingham, Neave and Ford, Wills and Intestacy in Australia and New Zealand, 2^nd Edn (1989), at [2907]:

“‘Settled’ means, in s.46(1)(c) [of the Tasmanian Administration and Probate Act 1935][9], ‘given by way of permanent provision or continuing provision for the future’. This construction fits in with the idea of property being settled by advancement, an advancement itself involving an element of permanence or continuing benefit. It also fits in with the requirement that property settled on marriage should be brought into account: small wedding presents would be excluded; larger gifts for the enduring benefit of the child would be caught.”

37.In our view, it is plain from a simple reading of s 5(1)(c) that there are only two situations under which a transfer of property by an intestate to his/her child would be caught by the hotchpot provision, namely, transfer by way of advancement or on the marriage of the child. The references to “settled” in s 5(1)(c) only make it clear that the relevant transfer may be effected by means of a settlement (including settlement of any life or lesser interest and property covenanted to be paid or settled). However, the mere fact that a transfer of property was by way of a “settlement” is not sufficient to trigger the application of the hotchpot provision.

(v)  Ground (4) - “contrary intention”

38.Having reached the conclusion that the Judge was entitled to find that the transfer of the Tai Tam Road Property by the Deceased to the Defendant and his wife was not an “advancement” for the purpose of s 5(1)(c), it becomes unnecessary for us to consider the issue of “contrary intention”. It suffices for us to mention that, should it be necessary to do so, we would hold that, on the basis of the Judge’s finding as regards the Deceased’s intention or wish that the Tai Tam Road Property be treated as the ancestral home and passed down from generation to generation in the male lineage of the family, it was open to the Judge to find the existence of a contrary intention on the part of the Deceased that the Tai Tam Road Property should not be included in the hotchpot for the reasons given in §44 of the Judgment.

DISPOSITION

39.The Plaintiff’s appeal is dismissed with costs to the Defendant, to be taxed if not agreed.

Mr Adrian But and Ms Ann Lee, instructed by Paul W Tse, for the Plaintiff

Mr Justin Cheung, instructed by Chau & Co, for the Defendant