Young Chi Kin Eric v. The Personal Representatives of Zhong Xian Wen, Deceased and Another

HCMP 717/2021

[2023] HKCFI 1783

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 717 OF 2021

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BETWEEN

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JUDGEMENT

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1.This is the substantive hearing of the proceedings commenced by the Plaintiff’s Originating Summons filed on 24 May 2021 (the “OS”).

2.By it the Plaintiff seeks a declaration that the Deceased, and then his estate, has been holding the only issued ordinary share in one Crown World Investments Limited (the “One Share” and the “Company”), which is a BVI company, on trust for him, and further seeks an order vesting the One Share in him absolutely.

3.By an order of the Master made on 19 May 2022, the Official Solicitor was appointed to represent the estate of Mr Zhong Xian Wen (the “Deceased”) for the limited purpose of accepting service of the OS. Pursuant thereto, the Official Receiver was duly served. On 30 January 2023, another Master granted leave to the Plaintiff to proceed with these proceedings in the absence of a person representing the estate of the Deceased (the “Estate”) until the grant of Letters of Administration of the Estate (“the “LA”) be obtained by the 2^nd Defendant (“Suen”).

4.Suen is the surviving widow of the Deceased. She had indicated she would be, and she presently is, applying for the grant of the LA. She was duly served with the OS and the supporting affirmations on 25 May 2021. She has through her solicitors filed an Acknowledgment of Service on 7 July 2021 indicating that she would not contest these proceedings. By her solicitors’ two recent letters both dated 30 June 2023, Suen reiterated her neutral stance and asked to be (and was) excused from attending this hearing and Suen also said that the application for the LA was till pending as she was taking steps to answer certain queries raised by the Probate Registry.

5.In the circumstances, I proceeded with the hearing in the absence of both Defendants.

The facts

6.The Plaintiff filed two affirmations in support, one by him filed on 24 May 2021, and another by one Choi Ming Hei (“Choi”) filed also on the same date.

7.As the evidence given in the two said affirmations was uncontested, and such evidence is well supported by documents, I find the following as facts.

8.The Deceased was the Plaintiff’s friend.

9.The Company was incorporated in the British Virgin Islands on 11 November 2010[1].

10.On 30 April 2012, the Deceased became the sole shareholder of the Company by being transferred the One Share and also became its sole director[2].

11.On about 30 April 2012, the Deceased executed a written Declaration of Trust declaring unequivocally, among others, that he held the One Share on trust for the Plaintiff[3]. In the same Declaration, it was stated that certain transfer documents in respect of the One Share had already been signed by the Deceased and forwarded to the Plaintiff. A blank and undated Share Transfer Form in respect of the One Share in the Company signed with the same signature in the Declaration of Trust and an undated letter of resignation of director also bearing the same signature were produced by the Plaintiff[4]. The Declaration of Trust and the letter of resignation both bear, among others, the HKID number of the Deceased.

12.The Company was used by the Plaintiff to invest in shares of listed companies in Hong Kong[5] and so holding the investment through the Company and the Declaration of Trust was part of his overall asset allocation strategy.

13.Choi was a mutual friend of the Deceased and the Plaintiff. He witnessed the execution of the Declaration of Trust by the Deceased on about 30 April 2012.

14.The Deceased passed away unexpectedly on 24 November 2020.

15.By his solicitors’ letter to Suen dated 11 February 2021, the Plaintiff enclosed the Declaration of Trust and the undated transfer documents and asked Suen as potentially the personal representative of the Estate whether she would agree to transfer the legal title of the One Share back to him.

16.Though Suen did not formally respond, she told the Plaintiff about, and sent him pictures of, two Caveats filed respectively by Prime Credit Limited on 18 December 2020 and American Express Int’l Inc on 2 March 2021 against the grant of probate of the Estate[6].

17.As said, on 24 May 2021, the Plaintiff filed the OS.

The Plaintiff’s case proven; appropriate relief

18.On the facts I find above based on the uncontested and documentary evidence, it is clearly proven that the Plaintiff has been the beneficial owner of the One Share since about 30 April 2012 and that the Deceased, and after his death the Estate, has been holding the same on trust for the Plaintiff. I so hold.

19.The Plaintiff is clearly entitled to the declaration sought.

20.On the vesting order, Mr Yau relies on sections 52(1)(e) and 52(5) of the Trustee Ordinance Cap 29 and asks the court to make an order in similar terms as the one sought and granted by Deputy High Court Judge Paul Lam SC in Re Lee Yang Shiu Chuen Joyce [2021] 6 HKC 515 in which a vesting order was applied for under section 52 of the Trustee Ordinance.

21.The relevant part of section 52 of the Trustee Ordinance provides:

“52. Vesting orders as to stock and thing in action

(1) In any of the following cases, namely—

(a) …

(e) where stock or a thing in action is vested in a trustee whether by way of mortgage or otherwise and it appears to the court to be expedient,

the court may make an order vesting the right to transfer or call for a transfer of stock, or to receive the dividends or income thereof, or to sue for or recover the thing in action, in any such person as the court may appoint:

Provided that—

(i) …

(ii) …

…

(5) The court may make declarations and give directions concerning the manner in which the right to transfer any stock or thing in action vested under the provisions of this Ordinance is to be exercised.”

22.I accept Mr Yau’s submission that the situation in the present case falls within section 52(1)(e) which is therefore engaged. As said, the personal representative of the Estate did not seek to dispute the Plaintiff’s case, nor have she refused to effect the transfer of the legal title of the One Share back to the Plaintiff. The matter has been held up only because Suen’s application for the grant of LA meet with such difficulties that are taking time to resolve, if at all. There is no good reason why the Plaintiff should be left waiting, rather indefinitely, and in the meantime is unable to manage the investment portfolio which is beneficially entirely his. In my view, this situation is one that appears to this court “expedient” within the meaning of section 52(1)(e).

23.In my view, an order in terms similar to the one granted in Re Lee Yang Shiu Chuen Joyce is eminently appropriate.

Disposal

24.In the premises, I give judgment to the Plaintiff and make the following order:

(1) A declaration that the Deceased held, and after his death his estate has been holding, the only one issued ordinary share in Crown World Investments Limited registered in the Deceased’s name (“the Share”) on trust for the benefit of the Plaintiff; and this order be proof of the Plaintiff’s legal and beneficial ownership in the Share;

(2) (a) The right to transfer the Share be vested in the Plaintiff; and

(b) The Plaintiff may transfer the Share to himself or to any other person or entity as he may desire.

25.As asked by the Plaintiff, there be no order as to costs between the Plaintiff and the Defendants.

26.I thank Mr Yau for his helpful assistance.

Mr Jeff YAU, instructed by Messrs ONC Lawyers, for the Plaintiff

The personal representatives of Zhong Xian Wen, deceased, being absent

Messrs C&T Legal LLP, for the 2^nd Defendant, attendance being excused