Kleinwort Benson (Hong Kong) Trustees Ltd. V.Wong Foon Hang (Alias Wong Foon Han) and Others
Read the full judgment text of HCMP 3515/1992 on BabelCite. This High Court CFI judgment was delivered on 24 September 1993.
1. Mr Wong Ping Sun, who died on 9th November 1942, headed a large family, comprising two wives, seven concubines, and twelve children, eleven of whom were daughters, and there was just the one son. He was a man of wealth and influence, having been the compradore for the Peninsula and Oriental Steam Navigation Company, and a Justice of the Peace. The family lived in style, occupying Numbers 6 and 7, Sui Wa Terrace, with an area of approximately ten thousand square feet, as their home.
Cited by 5 cases
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HCMP003515/1992 1992,MP No.3515 IN THE SUPREME COURT OF HONG KONG HIGH COURT MISCELLANEOUS PROCEEDINGS ____________
____________ KLEINWORT BENSON (HONG KONG) TRUSTEES LTD. V.KLEINWORT BENSON (HONG KONG) TRUSTEES LTD.
____________ Coram: Hon. Rhind, J in open court under O.42 r.5A Dates of hearing: 22, 23 and 30 June, 1 and 2 July and 22 July 1993 Date of delivery of judgment: 24 September 1993 _______________ J U D G M E N T _______________ 1. Mr Wong Ping Sun, who died on 9th November 1942, headed a large family, comprising two wives, seven concubines, and twelve children, eleven of whom were daughters, and there was just the one son. He was a man of wealth and influence, having been the compradore for the Peninsula and Oriental Steam Navigation Company, and a Justice of the Peace. The family lived in style, occupying Numbers 6 and 7, Sui Wa Terrace, with an area of approximately ten thousand square feet, as their home. 2. By his Will, dated 23rd July 1936, he made provision for all his family members except his first wife on whom I have no information. Some got specific legacies and/or annuities, whilst each and every one, was entitled to live in a family house which was to be kept and maintained, with food provided, by the Trustees of the Will from the residuary estate. Further provision for the education of his unmarried daughters was to be made by his Trustees from his residuary estate, but the details are of no relevance now. One other form of provision for the females of the family is, however, still of relevance, namely, that the Trustees of the Will were, from the residuary estate, to meet the medical and funeral expenses of his second wife, his concubines and his unmarried daughters if living at the family house. 3. Subject to the trusts I have just mentioned, the residuary estate was to go to the only son, Wong Chi Po, absolutely. 4. The Trustees appointed by Mr Wong Ping Sun in his Will were the same people as his Executors, namely, his third concubine, Chan Sui Wan, his fifth concubine, Chan Pui Tsing, and his son. 5. To those Trustees, he left all his real and personal estate upon trust to sell, with power to postpone, and after payment of his debts, testamentary and funeral expenses, legacies and annuities, to invest the proceeds and any parts of the Estate for the time being unsold, this being the residuary estate, upon the trusts I have described, with his son, Wong Chi Po, as the residuary legatee. 6. Probate of Mr Wong Ping Sun's Will was granted his son, and third concubine on 14th January 1948, and on 8th March, that same years, double- probate was granted to the fifth concubine. 7. The Schedule of Assets annexed to the grants of probate showed that, at his date of death, Mr Wong Ping Sun's assets were, in total, worth $363,650. Amongst those assets were eight different pieces of real estate, and shares in twenty-five different companies. 8. Of particular interest are:- (A) Three of the different pieces of real estate, namely,
(B) Shares in the following five companies :-
9. The first of Mr Wong Ping Sun's Executors to die was his third concubine, Chan Sui Wan, on 7th February 1952; next, his son, Wong Chi Po, on 12th April 1976, and, lastly, the fifth concubine, Chan Pui Tsing, on 5th March 1982. 10. As Chan Pui Tsing died intestate, the chain of representation to Mr Wong Ping Sun's Estate was broken. 11. At the time of Chan Pui Tsing's death, the three different pieces of real estate and the shares in the five companies I particularised three paragraphs back remained unadministered. 12. Of Mr Wong Ping Sun's two wives, seven concubines and twelve children, the only survivors at the death of Chan Pui Tsing were five of his daughters, namely, the 1st, 2nd and 3rd Defendants, all three of whom are still alive, his ninth daughter, Wong Tsi Hang, who is still alive but not a party to the present proceedings, and his fourth daughter, Wong Yiu Hang who has since died. 13. With the death of Chan Pui Tsing, those then - surviving five daughters thereupon became first in line to take over the administration of the Estate of their late father by applying for a grant of letters of administration de bonis non. 14. The eldest of those five daughters, namely, Wong Yiu Hang, died without applying for any such grant, and she now drops out of the picture. 15. The four remaining daughters, namely, D1, D2, D3 and Wong Tsi Hang formally renounced their right to apply for a grant in such a way that their sister-in-law, Mrs Wong Yeung Wai King, Julie, ("Mrs Julie Wong"), who was the widow and sole executrix of their late brother, Wong Chi Po, was treated by the Probate Registry as having become entitled in their stead to apply for a grant of administration de bonis non in respect of the Estate of Mr Wong Ping Sun. Instead of applying for that grant in person, Mrs Julie Wong, by a Power of Attorney dated 31st March 1988, nominated Kleinwort Benson (Hong Kong) Trustees Limited, ("Kleinwort Benson"), a trustee company and the plaintiff in the present proceedings, to apply for the grant until she applied for a like grant. Under the Power of Attorney, the purposes, inter alia, for which she had nominated Kleinwort Benson her attorney in relation to the grant were :
16. Kleinwort Benson, on 23rd September 1988, was duly granted letters of administration to the Estate of Mr Wong Ping Sun, with Will annexed, de bonis non, as attorney of Mrs Julie Wong. 17. Kleinwort Benson had in fact been advising Mrs Wong and various members of her family about the Wong Ping Sun Estate and related Estates since 1984. One of the Estates on which Kleinwort Benson had been advising Mrs Wong was that of her late husband, Mr Wong Chi Po. Mrs Wong, who was sole executrix under his Will did not take out probate of it until 16th March 1982, although, as I have already mentioned, he had died as long ago as 12th April 1976. 18. Once Kleinwort Benson became Administrator of Mr Wong Ping Sun's Estate on 23rd September 1988, it moved with commendable speed to do all it could to bring the Estate's unadministered assets under its control 19. On the very day it got the grant of letters of administration, Kleinwort Benson had itself registered as Administrator on the Land Register in respect of No. 22, Swatow street. (No.24 had been disposed of on 1st December 1987 pursuant to a Court Order, but, for present purposes nothing more need by said on that). No.176, Des Voeux Road was assigned by Kleinworth Benson on 30th September 1988, pursuant to a sale agreement which had been made on 11th May 1988. 20. Although there is no direct evidence on this I presume that on or about 23rd September 1988, Kleinwort Benson also got its name entered as Administrator in the Land Registry in respect of 2, Sing Ping Street. That piece of property was sold by Kleinwort Benson, presumably describing itself as Administrator, on 12th September 1990. 21. Kleinworth Benson also moved quickly to get its name, as Adminstrator, entered in the share registers of the previously referred to five companies in which the Wong Ping Sun Estate still held shares. 22. It is common ground that, by operation of law, the grant of letters of administration to Kleinwort Benson in respect of Mr Wong Ping Sun's Estate ceased to be effective on the death of its principal, Mrs Julie Wong, on 20th March 1991. 23. As at the death of Mrs Julie Wong, the only undisposed of piece of land in the Wong Ping Sun Estate was No.22, Swatow Street. The shares in the five companies also remained as part of Mr Wong Ping Sun's Estate. The total value of that Estate then was approximately $6 million. 24. It came as something of a surprise to Kleinwort Benson when, on 29th May 1991, it received a letter from solicitors acting for D1 and D2 to the effect that D1 and D2 were applying to the court to retract their renunciations in respect of the unadministered assets in their late father's Estate, with a view to their seeking a grant of letters of administration with the Will annexed de bonis non. On 25th June 1991, court orders were made retracting D1's and D2's renunciations. 25. According to affidavit evidence filed on behalf of D1, D2 and D3, they are not satisfied with the way in which their late father's Estate has been administered over the years, their main ground of complaint being that the direction in his Will for keeping and maintaining a family house where his second wife, concubines and children could live with food provided free has not been satisfactorily implemented. 26. Their late father's spacious house at Nos 6 and 7, Sui Wah Terrace, in which the four surviving daughters grew up, was appropriated by the executors of their late father's Will to their late brother Wong Chi Po, as residuary legatee, and he sold it on 2nd October 1971. In purported substitution for that family house, the late Wong Chi Po bought Flat 2, 71, Lytlleton Terrace. That has an area of approximately 1,000 square feet. It was bought in the name of Wong Chi Po, and now forms part of his Estate (subject, perhaps, to a resulting trust in favour of his four surviving sisters as the family house for their lives, but it is unnecessary for me to explore that angle). The fifth concubine, who was one of the three executors of Wong Ping Sun's Estate and the mother of D1 and D2, lived there with D1 and D2. D2 moved away to get married - She now lives in the United States - and the fifth concubine died, leaving D1, who has never married, to live on there alone. 27. D3 fared badly, from what she says. By contrast with the luxurious life-style provided for her by her father, who made a house at 22, Ho Man Tin, with two servants, available to her as her abode, she was required by her late brother to leave there in 1956, and he housed her instead at the basement of Nos 6 and 7, Sui Wah Terrace which was so damp that she soon became ill. For the sake of her health, she took refuge with an old school friend, and has lived with her ever since. D3 would now like to live in a family house on a scale comparable to that to which she grew accustomed while her father was alive since, in her view, that was what her father intended in his Will. 28. D1 and D3 say they would now like to spend their closing days together living in a family house. D2, who likes to visit here from the U.S.A. from time to time, indicates she would enjoy staying with D1 andf D3 in a family house on such occasions. 29. Somewhere grander than flat 2, 71, Lytlleton Road, is contemplated by D1, D2 and D3 as the family house where they, and the other surviving sister, Wong Tsi Hang, can live together, with free food, as and when they please. 30. By becoming administratrices of their late fathers' unadministered estate, D1 and D2 would, so it is submitted on their behalf, get the opportunity to right what they regard as a long-standing wrong. Whether there is merit in their complaint about the way in which their late father's Estate has been administered is an issue which I am not at present called on to determine. I have recounted some of their complaints as background to help explain what it is, in practical terms, they would hope to gain by taking over the administration of their late father's Estate. 31. Assuming for the moment that D1 and D2 do become administratrices of their late father's Estate, various legal impediments might stand in the way of their administering it in the way they have indicated they would would like to. One problem could be limitation periods which might stand in the way of some or all of Mr Wong Ping Sun's surviving daughers enforcing the terms of his Will at this stage. Another possible problem - this time affecting only D3 and the ninth daughter, Wong Tsi Hang - is whether the rights of those two against their late father's residuary Estate have been extinguished by their signing documents in 1988, described as "Undertakings". which could be construed as in the nature of compromises of all their rights under the Will in exchange for payments of $230,000 to each of them from the Estate. 32. At this stage, though, I am not required to find answers to any of the legal problems which might blight D1's and D2's plans for themselves and their sisters if they become administratrices. 33. The only issue with which I have to deal is whether D1 and D2 are entitled in the first place to a grant to become administrices of any unadminstered assets of their late father's Estate. 34. Kleinwort Benson's stance is that there no longer remain any assets unadministered in that Estate, so that there is no subject matter which could form the basis of a grant of administration de bonis non to D1 and D2. According to Kleinwort Benson, the situation is similar to In re Aldhous [1955] 1W.L.R. 459. Kleinwort Benson contends it had completed administering the assets by 31st March 1989 or, alternatively, by some date before the death of Mrs Julie Wong on 20th March 1991, with the result that it changed the capacity in which it held any assets from administrator to Trustee of the Will trusts before Mrs Julie Wong's dealth. 35. By the present proceedings, Kleinwort Benson seeks a declaration that the administration of the late Mr Wong Ping Sun's Estate is completed, and that Kleinwort is in the position of a Trustee holding for the beneficiaries under the terms of a Will Trust. A finding that the capacity in which Kleinwort Benson held the assets had changed from that of administrator to that of Trustee would wholly frustrate the effort of D1 and D2 to become administratrices. 36. Whether Kleinwort Benson has made the transition from administrator to Trustee is a question of fact, the onus being on Kleinwort Benson to establish such a change. Authority for the proposition on onus I have just stated, and with which all the parties are in agreement, is the House of Lords case, Attenborough v. Solomon [1913] A.C. 76. 37. To determine this question of fact it is necessary to look at all the surrounding circumstances. 38. I will, firstly, consider whether the evidence supports Kleinworth Benson in its contention it had progressed from the role of administrator to Trustee by 31st March 1989. Then, I will consider Kleinwort Benson's status as at the date of Mrs Julie Wong's death on 20th March 1991. I Whether Kleinwort Benson was Trustee Under a Will Trust of the Late Mr Wong Ping Sun as at 31st March 1989 39. Objective indicators in Kleinwort Benson's favour on this are scant, indeed, being limited to having paid all the Estate's debts and testamentary expenses, having advertised for creditors generally and having paid all outstanding legacies of which it was aware. It now turns out that there are even doubts over whether either of D1 or D2 ever received a legacy of $10,000 to which each was entitled under the Will on attaining the age of 22. Kleinwort Benson had also disposed of one of the pieces of real estate, namely, 176, Des Voeux Road on 30th September 1988. 40. Militating against Kleinwort's contention of having become a Trustee by 31st March 1989 are the following:
41. Either of (i) or (ii) above is, by itself, sufficient to deliver a knock- out blow to Kleinwort Benson's claim to have become a Trustee. Collectively, (i) to (vi) totally crush it. 42. I will now deal with each in turn (i) Unascertained residue 43. Unless the residue has been ascertained, a will trust cannot come into existence, for there will be no certainty of subject matter. Authority for that isLord Sudely v. Attorney General [1897] A.C. 11; Dr Barnado's Homes National Incorporated Association v Commissioners for Special Purposes of the Income Tax Acts [1921] 2.A.C. 1. and Commissioner of Stamp Duties (Queensland) v Livingston [1965] AC 694. 44. Kleinwort Benson has never produced a residuary account showing what was the ascertained residue it was supposed to have taken over as Trustee on 31st March 1989. 45. Lack of an ascertained residue is fatal to Kleinwort Benson's claim to have turned into Trustee of the Will Trust from having been an Administrator of the Estate. (ii) Lack of written assent to vesting of land 46. Attenborough v. Solomon [1913] AC 76 is authority for the proposition that, at common law, the capacity in which a personal representative (and that includes an administrator) holds assets for an estate will not change to that of Trustee under Will Trusts unless he has made an assent to such a change. 47. In respect of personality such assent can be implied or inferred from conduct without any writing being necessary. Factors such as the length of time since clearing the estate, (i.e. paying off its debts), the bringing in of a residuary account, and the absence of subsequent dealings as personal representative, can give rise to such an inference. In Attenborough itself, for example, there was a fourteen year gap between passing the residuary account, and a purported dealing with some family silverware which formed part of the residuary estate. During that fourteen year interval, none of the persons appointed as executors performed any acts of executorship, or did anything to show they still regarded themselves as executors. In such circumstances Viscount Haldane drew the inference that those appointed executors under the Will had assented to the vesting of the residuary estate in themselves as Trustees. 48. The contrast with the facts of the case before me could not be greater. There was a mere lapse of just over six months between Kleinwort Benson become a personal representative on 21st September 1988 and 31st March 1989, by when it says it had become a Trustee. There was no residuary account, and, as personal representative, Kleinwort Benson dealt with the Estate's assets when it sold No. 2 Shing Ping Street in September 1990. 49. Those three facts alone are, to my mind, sufficient to sink any claim by Kleinwort Benson that, on common law principles, it should be regarded as having transformed itself into a Trustee administering a Will Trust from 31st March 1989 onwards. 50. The significant question is whether, as a matter of law, Kleinwort Benson could, without executing a written assent, have changed its capacity real estate it was holding, bearing in mind the provisions of S.66(1) (2) and (3) of the Probate and Administration Ordinance Cap. 10. I now set out those provisions :-
51. Section 66 of Hong Kong's Probate and Administration Ordinance is modelled on s. 36 of England's Administration of Estates Act 1925. Sub- section (1) of the Hong Kong section reproduces sub-section (1) of the English section, the only modification being that Hong Kong has substituted the words "immovable property" for "estate or interest in real estate" in the English sub- section. Hong Kong's sub-section (2) is a straight borrowing of England's sub- section (2), whilst Hong Kong's sub-section (3) replicates England's sub- section (4). 52. Up until Re King's Will Trust [1964] Ch 542, there were conveyancers who acted on the basis that a written assent was not essential to bring about the situation of someone who had held land as a personal representative being able to show good legal title to it as Trustee. 53. The argument that in such a case an implied assent by a personal representative in his own favour could suffice was based on the notion that, for someone in whom a legal estate was already vested as personal representative, no question of having to "pass" a legal estate to himself as Trustee arose within the meaning of s.66(3), since only a change of the capacity in which he held occurred. 54. In rejecting that argument, Pennycuick J in Re King's Will Trusts had the following to say in relation to the identically-worded equivalent of Hong Kong's s. 66(3).
55. Much complaint was made against Pennycuick J's decision in learned periodicals at the time, and, in particular, it was alleged that he had overlooked a whole line of authority which should have led him to a different conclusion. The overlooked cases were Eaton v. Daines [1984] W.N32; Re Pitt (1928) 44 T.L.R. 371; Re Cockburn's Will Trusts [1957] Ch 438; and Re Stirrup's Contract : Stirrup v Foel Agricultural Co-operative Society Ltd [1961] 1W.L.R. 449. 56. A good practical reason for attacking Re King's Will Trusts at the time was the inconvenience it would cause in conveyancing transactions where one of the steps in a chain of title had relied on an implied assent. To perfect such a title, it would be necessary to get a written assent if the personal representatives were still alive, or, if not, a grant of administration de bonis non. 57. Almost thirty years on, Re King's Will Trusts has not, so far as I am aware, been previously challenged in the courts. An opportunity arose for such a challenge in the Court of Appeal in England in Re Edwards Will Trusts [1982] Ch 30, but was not taken up, so the Court of Appeal proceeded on the assumption that re Kings Will Trusts had been correctly decided. With each passing year, the number of defective pre-King's Will Trust's titles must be diminishing. 58. In some of the standard textbooks and practitioners' works, there is still a trace of nostalgia for the days when it was regarded as safe for conveyancers to act on their belief that legislation in the terms of s.66(3) of the Probate and Administration Ordinance did not preclude the possibility of implied assents relating to land, but the authors of those works issue strong warnings against nowadays trying to dispense with written assents in practice. 59. To overcome the problem of lack of written assents from Kleinwort Benson as personal representative to itself as Trustee in relation to No. 22 Swatow Street and No. 2 Shing Ping Street during the period upto 31st March 1989 now under consideration, the submission was made on its behalf that this court should treat Re King's Will Trusts as wrongly decided. 60. In my view, Pennycuick J's reasoning cannot be faulted. His insistence that there had to be a divesting of title from the personal representative in that capacity and a revesting in the same person but in the different capacity of Trustee has resonances of what Viscount Haldane said in the House of Lord's case of Attenborough v Solomon about the way assents worked under the common law. 61. On a literal interpretation of s.66(3) of the Probate and Administration Ordinance, I see no conceptual or linguistic difficulty in using the word "pass" to describe what happens to a legal estate in land when a written assent changes the capacity in which the same person holds it from that of a personal representative to that of a Trustee. 62. On a purposive construction of s.66(3) of the Ordinance, too, I think there is everything to be said for interpreting it in such a way that the only type of assent capable of bringing about a change in the capacity in which a person holds a legal estate in land is one of the written variety. A principal objective of the raft of property legislation passed in England in 1925 - And s.66(3) of the Ordinance is a word-for-word borrowing from it - was to simplify conveyancing. A system which produces the cut-and-dried result in relation to land that no writing means no assent is immeasurably easier to operate than one where a complex weighing exercise can be required to determine whether, and, if so, when, the transition from personal representative to Trustee occurred. 63. More often than not, it will be in the context of a conveyancing transactions that questions concerning assents will assume significance. Kleinwort Benson's London solicitor was obviously thinking along such practical lines when, by his letter dated 13th, July 1992 to his client, he formulated the following question :-
64. If Kleinwort Benson were now to now enter into a contract to sell No. 22 Swatow Street as Trustee, relying on the events which occurred down to 31st March 1989, the only way in which it could attempt to show it had a good title would be, on its approach, by going through the same laborious exercise on which the court is at present embarked of seeing whether a transition from personal representative to Trustee can be teased out of a complex cluster of surrounding circumstances. An interpretation of s.66(3) which can lead to that type of complexity and inherent uncertainty should, in my judgment, be rejected in favour of the simpler alternative, (which can be reached without doing any violence to the language of s.66(3)), of the courts recognizing written assents only as effective for changing the capacity in which a personal representative holds an estate in land. 65. Based on my view of the correct interpretation of s.66(3), I hold that, as a matter of law Kleinwort Benson cannot have become a Trustee of No. 22 Swatow Street, or No. 2, Shing Ping Street, under a Will Trust, because it has never made a written assent to itself in respect of that land
66. In reply to the letter, dated, 29th May 1991 from Messrs K.L. Ho & Co. the solicitors for D1, D2 and D3, announcing that D1 and D2 were applying to the court to retract their renunciations, with a view to applying for a grant to administer their late father's Estate, Kleinwort Benson replied on 4th July 91, as follows, after a reminder dated 28th June 1991:
for KLEINWORT BENSON (HONG KONG) TRUSTEE LIMITED" 67. Section 34 of the Ordinance is concerned with the chain of executorship. Kleinwort Benson now concedes it was wrong in its contention, implicit in that letter, that Wong Sze Ip and Ruby Wang, the executors of Mrs Julie Wong's Estate were entitled to apply for a grant to administer the unadministered assets in Mr Wong Ping Sun's Estate, but I have no reason to doubt they honestly believed what they wrote at the time. I have underlined the parts of the letter indicating that Kleinwort Benson was, at the time, of the view that the Wong Ping Sun Estate was still in the course of administration. Wong Sze Ip is the late Mrs Julie Wong's eldest son and Ruby Wang the widow of Mrs Julie Wong's youngest son. 68. Next comes a letter dated 12th July 1991 from Kleinwort Benson's solicitors to the solicitors for D1, D2 and D3. I will set out only the relevant paragraphs, underlining the words showing that Kleinwort Benson's solicitors, too, were of the view their client was still in the course of administration.
69. In context, the reference to "trustee" in the sentence, "Our client is the registered owner of all assets in the estate of Wong Ping Sun and as such has a duty to administer as an executor and trustee", meant no more than that in administering the Estate, Kleinwort Benson had fiduciary duties, and, in fact, by virtue of the definition of "trust", "trustee" and "personal representative" in s.2 of the Trustee Ordinance Cap.29, an administrator is a trustee for some purposes, but that does not mean the administrator has become a trustee in the sense of someone who has finished administering the estate and made the transition to Trustee of a Will Trust. 70. The word "administer" in the phrase, "... who has failed to turn over rent to us as administer of the estate" should, obviously, read "administrator". 71. Judged by the following passage in Kleinwort Benson's letter, dated 25th July 1991, to its London Solicitor, Mr Martin Gowar, of the firm of Lawrence Graham, Kleinwort Benson did not claim it was a Trustee : it did not know what it was at the time :
72. The impression, created by Kleinwort Benson's letter dated 28th August 1991 to D1, was that Kleinwort Benson still regarded the Wong Ping Sun Estate as being in the course of administration. I quote
73. Minutes kept by Kleinwort Benson of the Wong Family meetings it organized point away from Kleinwort Benson having regarded itself as Trustee administering a Will Trust, rather than a personal representative still administering an Estate. 74. I quote as follows from the Minutes (Bundle C, page 895) of such a meeting on 24th January 1990 :
75. That evidences an ongoing dispute going back to 1982 in relation to 2, Shing Ping Street. The steps Kleinwort Benson had taken and was proposing to take in relation to that property are more consistent with the activities of a personal representative than a Trustee of a Will Trust. 76. When Mr Turner, the Director of Kelinwort Benson handling the affairs of the Wong Family, referred in one of his affidavits to "an established fund of properties and investments" ..."Kleinwort Benson was holding as trustee", he was obviously referring to a time after the disposal of 2, Shing Ping Street on 9th September 1990. A property beset by all the problems affecting 2 Shing Ping Street upto the time Kleinwort Benson rid the Estate of it would be so ill-suited for inclusion in "an established fund of properties and investments" that I regard it as reasonable to suppose that this "established fund" could not have been established before 9th September 1990, the date Kleinwort Benson assigned it. 77. A Wong Family Meeting on 22nd May 1991, when dealing with the Wong Ping Sun Estate, touched upon the matter of 22, Swatow Street as follows :
78. The reference to "As soon as the rest of the estate is dealt with..." does not square with the notion of this Estate having been wound up by then. 79. In the light of the type of observation I have shown Kleinwort Benson was recording in correspondence and at Wong Family meetings on the dates I have mentioned, the change of front Kleinwort Benson made when on 31st July 1992, it wrote to the solicitors for D1, D2 and D3 as follows was, to say the least, abrupt :
80. A significant indicator relied on by Viscount Haldane in Solomons v Attenborough to determine the shift from personal representative to Trustee was the attitude adopted by the individual concerned to his own situation. 81. On the view I take, the evidence overwhelmingly shows that at all material times, at least prior to its letter of 25th July 1991 to its own London solicitors, Kleinwort Benson had regarded itself as still in the course of administering the Wong Ping Sun Estate. As a professional trustee company, it would have well understood the difference between an administrator who winds up an estate, and a Trustee administering a Will Trust. The total lack of contemporaneous evidence prior to Mrs Julie Wong's death that Kleinwort Benson then thought itself to have made the transition to Trustee of a Will trust, combined with the wealth of positive evidence for the five months after Mrs Julie Wong's death, culminating in Kleinwort Benson's letter dated 28th August 1991 to D1, irresistibly points to Kleinwort Benson's not having evolved to the stage of Trustee of a Will Trust by the time Kleinwort Benson's authority lapsed with Mrs Julie Wong's death. (vi) Whether as a matter of fact Kleinwort Benson had completed administering the assets in the Wong Ping Sun Estate 82. One of the purposes for which Mrs Julie Wong gave Kleinwort Benson the Power of Attorney in relation to Wong Ping Sun's Estate was "(3) Receiving collecting and getting in the unadministered estate in Hong Kong of the said deceased and converting the same into money either by private sale or public aution or otherwise..." 83. The bulk of the unadministered Estate, in terms of value, was, far and away, the three pieces of land. 84. On the evidence as a whole, I am satisfied that, as part of the process of winding up that Estate, Kleinwort Benson set about trying to dispose of all the real property. 85. By 31st March 1989, it had certainly disposed of 176, Des Voeux Road and, possibly, also of 24 Swatow Street. Precisely when 24 Swatow Street was assigned is unclear, paragraph 20 of Mr Turner's first affidavit suggesting on or about 15th May 1989, whereas Bundle C at page 230 indicates 1st December 1987. Nothing turns on the discrepancy. 86. Insofar as No.22, Swatow Street is concerned, the evidence indicates that Kleinwort Benson never got it fully under control. There was the complication that D4, Mr Wong Sze Keung ("Mr Tony Wong"), who was one of Mrs Julies Wong's sons and the late Mr Wong Ping Sun's grandsons, occupied the lower floors of No.22, Swatow Street for his own business, and collected the rents from tenants on the upper floors. The impression I get is that the arrangements under which D4 did that were loose and informal. I find it difficult to accept that Kleinwort Benson, as a professional trust company, would have felt by 31st March 1989 that it had fully administered 22 Swatow Street to the point where there was nothing further for it to do as Administrator. 87. There is certainly nothing to suggest that, as at 31st March 1989, Kleinwort Benson had separated out 22 Swatow Street from the other real estate, and consciously decided to keep it to become part of the Will Trust which would come into existence once Kleinwort Benson had completed winding up the Estate 88. Reference has already been made to how No.2, Shing Ping Street had been a source of trouble for the Wong Ping Sun Estate since 1982. In that year, Mrs Julie Wong purported to sell it despite lacking title to do so. By no stretch of the imagination could it be realistically supposed that Kleinwort Benson had brought that property under its control by 31st March 1989 to the point where that land formed part of an established fund of properties in a Will Trust. 89. In sum, the evidence and the law combine overwhelmingly to show that Kleinwort had not become Trustee of a Wong Ping Sun Will Trust by 31st March 1989. 90. Kleinwort Benson's fall-back position is that if it had not made Trustee as early as 31st March 1989, it had, however, done so by 20th March 1991, the date of Mrs Julie Wong's death. That leads in to II. II Whether Kleinwort Benson was Trustee under a Will Trust of the Late Mr Wong Ping Sun as at 20th March 1991 91. During the interval of almost two years between 31st March 1989, and Mrs Julie Wong's death, the only development favourable to Kleinwort Benson's contention it had become Trustee was its disengagement of the Wong Ping Sun Estate from the troublesome asset, No.2, Shing Ping Street. That property was finally disposed of on 12th September 1990. 92. Thus, of my six sub-headings under I, only (iv) was resolved unequivocally in Kleinwort Benson's favour during this later phase. Although effects of (iii) and (vi) were diluted by the conveyance of No.2, Shing Ping Street, there remained the fact, inimical to Kleinwort Benson's claim to have become Trustee, that it was still shown on the Land Register as "Administrator" in relation to No.22, Swatow Street, and orderly management of that property still eluded Kleinwort Benson, which, like it or not, found itself having to deal through D4 with the tenants of the parts of that building not occupied for the purposes of D4's own business. 93. On my subheadings (i), unascertained residue; (ii) lack of written assent to the vesting of land; and (v) Kleinwort Benson's late conversion to the view that really it had been a Trustee, despite previously always talking and acting like a personal representative, Kleinwort Benson's case was, in my Judgment, as fatally flawed at the 20th March 1991 as it had been at the 31st March 1989. Conclusion 94. Kleinwort Benson was not a Trustee of any Wong Ping Sun Will Trust as at the date of Mrs Julie Wong's death. 95. That, however, did not mean that Kleinwort Benson was relieved of all ongoing finduciary duties towards the Wong Ping Sun Estate with effect from 20th March 1991. 96. As one expects from a trustee company, Kleinwort Benson has continued to act responsibly towards the Wong Ping Sun Estate since then, and has taken reasonable steps to preserve the assets in that Estate. The present proceedings, initiated by Kleinwort Benson, are such a step. Kleinwort Benson no longer wishes, generally, for its own business reasons, to continue operating as a trustee company in this part of the world, and, more particularly, it wishes to disengage itself from the feuds which, unhappily, have riven parts of the Wong Family since Mrs Julie Wong's death. 97. My finding that Kleinwort Benson was not a Trustee means it cannot appoint a successor to complete the administration of the Wong Ping Sun Estate. 98. The court now faces a dilemma. On the one hand, it would not be reasonable to expect a trustee company, which is basically a business, to continue indefinitely in a role from which it seeks release, while, on the other hand, the court abhors the prospect of a vacuum which might lead to a free-for- all in relation to the Estate's assets. 99. To resolve that dilemma, the court directs Kleinwort Benson to continue to preserve the assets of the Wong Ping Sun Estate until the grant of fresh letters of administration de bonis non at the latest, but with liberty to apply for an earlier release. 100. As this is a judgment being delivered pursuant to O42, r. 5A, I will make an order nisi as to costs. Since my understanding is that Kleinwort Benson looks to the Wong Chi Po Estate for its costs, I will not at this point make an order in Kleinwort Benson's favour against the Wong Ping Sun Estate for them, but, in case my understanding on that is incorrect, I allow Kleinwort Benson fourteen days to apply to the court for a different order. 101. I make a fourteen day order nisi that the defendants are to have their costs against the Wong Ping Sun Estate on a common-fund basis.
Representation: Miss Audrey Eu, Q.C. instructed by M/s Deacons for the Plaintiff Mr D. Chang, Q.C. & Mr P. Fung instructed by M/s K.L. Ho & Co. for the 1st, 2nd & 3rd Defendant Mr Horace Wong instructed by M/s Vincent T.K. Cheung, Yap & Co. for the 4th Defendant |
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