Wong Wan v. Lee Ying Keung

HCMP000066/1979

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Coram: Yang, J. in Chambers

Date of Judgment: 11 May 1979

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JUDGMENT

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Construction of will

1. In this case the court is called upon to determine the true construction of a home-made will. The will is in the following terms:-

"(I) hereby bequeath all my properties, mortgages and stock under my name unto my wife Wong Wan (for her) to administer, receive the benefits, and to sell. None of the son(s) and daughter(s) shall say anything to the contrary. But at the time (my) young daughter Ching Mui reaches the age of 21 if there is any residue (it) shall be divided into three shares, namely Wong Wan, Lee Ying Keung and Lee Ying Kwong shall each get one share. However, upon the death of Wong Wan the share owned (by her) shall be reserved for use for purposes of ancestral worship. None (of the sons and daughters) shall say anything to the contrary. (I) solemnly make this (my) ill."

2. In my view upon a reading of the will, there was clearly an intention on the part of the testator to create a discretionary trust in respect of the whole of his estate until the daughter Lee Ching-mui reached the age of 21 on 23rd April, 1980. It is common ground that the word "administer" here was not used in a technical sense but means simply "to manage". It seems to me incorrect to say that Wong Wan (the plaintiff) was only an executrix. The position here is different from that in Re Jane Davis⁽¹⁾.

3. The plaintiff being the sole trustee and this being a discretionary trust, it follows that none of the beneficiaries have any right to demand that the plaintiff should exercise her discretion in their favour. The beneficiaries have no more than a hope that the discretion would be exercised for their benefit.

4. It is also I think clear from the will that the intended beneficiaries of the trust were the plaintiff, the children of the plaintiff and the deceased, as well as the children of the deceased by his former marriage. There are no words in the will which indicate that any of the above mentioned people were excluded.

5. When the daughter Lee Ching-mui reaches the age of 21, the residuary estate is to be divided equally into three parts between the plaintiff, Lee Ying-keung the son of the deceased by his former marriage (viz. the defendant) and Lee Ying-kwong the son of the marriage between the deceased and the plaintiff. The question then arises as to whether the plaintiff is entitled to an absolute or a life interest in the one-third part of the residuary estate. In Minchell's Will Trust⁽²⁾

".................. a testator, by a home-made will, gave and bequeathed everything he possessed or had to leave to his wife for her lifetime and 'after her death if anything should be left over I would like it to be divided as follows, ' the court held that the prima facie view that the words 'for her lifetime' cut down the widow's interest to a life interest in income had been displaced. The words 'for her lifetime' could not be regarded as words of limitation; there was no mention of income, and subject to administration, no trust, thus suggesting a gift of corpus rather than income alone. Further, the words following the gift over contemplated that all, nothing, or something, might be left on the widow's death. That was inconsistent with a life interest, under which the whole of the property would be left over. The widow therefore took the whole of the testator's estate absolutely, the testator merely expressing a hope as to what should be done with any balance. The court was clearly guided by the fact that the will was a home-made one, and a reluctance to allow 'one man's nonsense to be a guide to another man's nonsense.'"

6. The present case may be distinguished in that, unlike the Minchell's case the testator here did contemplate that something should be left on the plaintiff's death. The will said that upon her death her share (not what was left of her share if any) "shall be reserved for purposes of ancestral worship". Whilst the provision for ancestral worship is void as being against perpetuity, the testator's intention is clear that the plaintiff's share would remain intact upon her death.

7. Mr. Charles Yeung referred to Re Hamilton⁽³⁾. There Lindley L.J. said (at p.373):-

"You must take the will which you have to construe and see what it means, and if you come to the conclusion that no trust was intended, you say so, although previous judges have said the contrary on some wills more or less similar to the one which you have to construe."

And Lopes L.J. said (at p.374):-

"It seems to me perfectly clear that the current of decisions with regard to precatory trusts is now changed, and that the result of the change is this, that the Court will not allow a precatory trust to be raised unless on the consideration of all the words employed it comes to the conclusion that it was the intention of the testator to create a trust."

8. This is of course well known law, but the will now under consideration is quite different from a precatory trust.

9. In the light of what I have said above, I make the declarations sought, namely:-

1. Upon the true construction of the will of the said deceased a discretionary trust is created in respect of the whole of the deceased's estate after completion of formal administration until the vesting of the residuary estate on 23rd April 1980 when the youngest daughter of the said deceased attains the age of 21.

2. The plaintiff is the sole trustee of the said trust with power to apply the income and capital thereof as the plaintiff may in her absolute discretion think fit for the maintenance and benefit of herself and the children of the said deceased.

3. Upon the true construction of the said will the beneficiaries of the said discretionary trust are:

4. Upon the youngest daughter Lee Ching-mui reaching 21 years of age on 23rd April 1980 the residuary estate of the deceased is to be equally divided into 3 parts between Lee Ying-kwong, Lee Ying-keung and the plaintiff.

5. Upon the true construction of the said will the plaintiff is entitled to a life interest in one-third of residuary estate.

Representation:

Mr. Richard Mills-Owens (Lau, Wong & Chan) for Plaintiff.

Mr. Charles Yeung (Gallant Y.T. Ho & Co.) for Defendant.

(1) (1891) 3 Ch. 119

(2) [1964] 2 All E.R. 47

(3) [1895] 2 Ch. 370

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Coram: Full Bench (McMullin & Leonard, JJ.)

Date of Judgment:

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JUDGMENT

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Leonard, J.:

This is a motion for an order of certiorari to move into this court and quash a decision by the Commissioner of the Television and Entertainment Licensing Authority made on the 5th February 1979 revoking a public dance hall licence No. SB000077 in respect of premises at No. 227, Nathan Road, Second Floor, Front Portion, Kowloon, leave having been given on the 26th February 1979. A document purporting to be a photo copy of the dance hall licence with conditions endorsed on it was produced to us. This bears the serial No. 945 and the reference No. B-61. The matter was however argued before us on the basis that this was the licence referred to as revoked and I take it that in the passage of time this licence, which was an annual one apparently first issued on the 1st May 1968, had its serial number changed. It is common ground that the applicant was granted a licence in November 1968 which was renewed annually. The copy produced to us is dated the 3rd May 1968 but it appears to have been granted to somebody other than the applicant originally. Again, it is common case that the licence enjoyed by the applicant was enjoyed on condition that

"except with the written permission of the licensing authority endorsed on the licence, the licensee shall not -

If this condition was not actually endorsed on the licence enjoyed by the applicant it was implied by the provisions of regulation 78 of the Miscellaneous Licences Regulations.

By a letter dated the 5th February 1979 a Mr. Albert Chan acting for the Commissioner of Television & Entertainment Licensing purported to revoke the applicant's public dance hall licence with effect from the 28th February 1979. This letter, which is the subject of attack in these proceedings, reads as follows:

Section 5 of the Miscellaneous Licences Ordinance (Cap. 114) provides for the grant of licences their revocation and appeals. Section 5(1) provides that

"Subject to the provisions of subsection (3), the grant of any licence issued, or to be issued, under this Ordinance shall be in the absolute discretion of the officer authorised to issue such licence."

The use of the phrase "in the absolute discretion of" is to be noted, for the formula used in subsection 2 is different. That subsection reads:

Subsection 3 deals with appeals to the Governor in Council from the decision of any officer under this section. It provides:

"An appeal shall lie by way of petition, in such manner and form and within such period as may be provided by regulation under section 3, to the Governor in Council."

There is no specific power to make regulations relating to the revocation of licences. There is a general power to provide by regulation for

The Miscellaneous Licences Regulations purported to have been made under the powers given by section 3 and the only regulations to which I need refer are regulation 7(2) and (3) and regulation 78(1). Regulation 7(2) reads:

"Upon any breach of the Ordinance or any regulation or condition of a licence the licensing authority may in his discretion peremptorily revoke the licence, whereupon the same shall forthwith cease to be valid."

Regulation 7(3) reads:

"In all other cases, the licensing authority shall not ... revoke a licence unless he has given to the person holding the licence proposed to be revoked not less than 7 days previous notice either personally or in writing ... that a revocation is proposed ..."

Regulation 78(1) of the same Regulations is already set out in the letter which I have quoted above. (It is perhaps pedantic to suggest that the letter might have been more happily phrased if it had alleged that there had been a breach of the condition not to transfer, lend or hire the licence except with written permission rather than to state as it did that there had been a breach of the conditions of the licence by contravening the regulation. That is perhaps by the way.)

It was the case for the Crown that the remedy of certiorari does not lie in this case because it is ousted by the wording of regulation 7(2). Crown counsel particularly relied upon the use of the word "peremptorily" in that regulation and on the use of the words "in all other cases" in regulation 7(3) as indicating that the action of the Commissioner in revoking the licence was an entirely administrative act of a kind which could not be questioned in this court. In support of this contention he relied in particular upon Nakkuda Ali v. M.F. De S. Javaratne⁽¹⁾. In that case the Controller of Textiles in Ceylon cancelled the appellant's textile licence under regulation 62 of the Defence (Control of Textiles) Regulations 1945, which empowered him to do so

"where the Controller has reasonable grounds to believe that any dealer is unfit to be allowed to continue as a dealer."

The Judicial Committee observed that the Controller lacked the characteristic of having the duty to act judicially when acting under regulation 62 and observed:

"In truth, when he cancels a licence he is not determining a question: he is taking executive action to withdraw a privilege because he believes, and has reasonable grounds to believe, that the holder is unfit to retain it. But, that apart, no procedure is laid down by the regulation for securing that the licence holder is to have notice of the Controller's intention to revoke the licence, or that there must be any inquiry, public or private, before the Controller acts. The licence holder has no right to appeal to the Controller or from the Controller. In brief, the power conferred on the Controller by reg. 62 stands by itself on the bare words of the regulation and, if the mere requirement that the Controller must have reasonable grounds of belief is insufficient to oblige him to act judicially there is nothing else in the context or conditions of his jurisdiction that suggests that he must regulate his action by analogy to judicial rules."

It was therefore held that a remedy analogous to certiorari did not lie.

In the instant case the power of the Commissioner cannot be said to "stand by itself on the bare words of the regulation". It stands on the words of the Ordinance and, if the regulation be intra vires, of the regulation and the Ordinance read together. Counsel for the applicant does not claim that the regulation is ultra vires. His case is, if I understand it aright, rather that the act of revocation was not a purely administrative or executive one and that the power to revoke was one which had to be exercised judicially, after due enquiry. I am therefore content for the purposes of this judgment only, to regard it as intra vires but in doing so I bear in mind that it does not stand alone but is to be construed with and subject to section 5 of the Ordinance.

Crown counsel in arguing that certiorari did not lie also referred us to Vidvodava University of Ceylon v. Silva⁽²⁾. That case dismissed as too wide the proposition that a duty to act judicially arises from the power to determine what are the rights of an individual. Otherwise I cannot see that that case is of assistance. It was concerned with the relationship of master and servant and decided that certiorari did not lie for wrongful dismissal of a servant as distinct from dismissal from office and it is on this point that its ratio decidendi rests. He also cited Duravappah v. Fernando & Others⁽³⁾ as an indication that Nakkuda Ali v. Javaratne⁽¹⁾ was still good law notwithstanding Ridge v. Baldwin⁽⁴⁾. The following passage in Durayappah's Case is of particular interest in relation to our case:

"Their Lordships were of course referred to the recent case of Ridge v. Baldwin (1964) A.C. 337. In that case no attempt was made to give an exhaustive classification of the cases where the principle audi alteram partem should be applied. In their Lordships' opinion it would be wrong to do so. Outside well-known cases such as dismissal from office, deprivation of property and expulsion from clubs, there is a vast area where the principle can only be applied upon most general considerations. For example, as Lord Reid when examining Rex v. Electricity Commissioners (1924) 1 K.B. 171 pointed out, Bankes L.J. inferred the judicial element from the nature of the power and Atkin L.J. did the same. Pausing there, however, it should not be assumed that their Lordships necessarily agree with Lord Reid's analysis of that case or with his criticism of Nakkuda Ali v. Javaratne. Outside the well-known classes of cases, no general rule can be laid down as to the application of the general principle in addition to the language of the provision. In their Lordship's opinion there are three matters which must always be borne in mind when considering whether the principle should be applied or not. These three matters are: first, what is the nature of the property, the office held, status enjoyed or services to be performed by the complainant of injustice. Secondly, in what circumstances or upon what occasions is the person claiming to be entitled to exercise the measure of control entitled to intervene. Thirdly, when a right to intervene is proved, what sanctions in fact is the latter entitled to impose upon the other. It is only upon a consideration of all these matters that the question of the application of the principle can properly be determined."

It is I consider particularly to be noted that this enunciation of the three matters to be borne in mind follows express disagreement at page 348 with the approach adopted in Sugathadasa v. Javasinghe⁽⁵⁾ that words such as:

"'where it appears to' or 'if it appears to the satisfaction of ...' or 'if the ... considers it expedient that ..' or 'if the ...is ... satisfied that' standing by themselves without other words or circumstances of qualification, exclude a duty to act judicially."

and the reason for that express disagreement

"These various formulae are introductory of the matter to be considered and are given little guidance upon the question of audi alteram partem. The statute can make itself clear upon this point and if it does cadit quaestio If it does not then the principle stated by Byles J. in Cooper v. Wandsworth Board of Works must be applied. He said:

It seems to me that the question as to whether the right to certiorari applies should be governed by the same principles for at least a quasi-judicial function is indicated by the duty to hear a party. As I see it the existence of such a function, gives rise to a supervisory duty in this court.

The primary question remains - has the statute made itself clear on the point. Crown counsel maintains that by the use of the word "peremptorily" it has but as I have already indicated the regulation if not ultra vires must be construed in the light of the Ordinance and read with it. So read, I cannot regard it as conclusive. The word "peremptory" when applied, for example, to a challenge to a juror may mean "without other cause than barely the prisoner's fancy" but that is not the only meaning of the word. This court acts peremptorily e.g. by issuing a peremptory mandamus after due consideration, after exercising to the full its purely judicial function. The licensing authority may act "peremptorily" but he may only so act under the Regulation

"Upon any breach of the Ordinance or any regulation or condition of a licence"

read with the words of section 5(2)

"On proof to his satisfaction of an offence against this Ordinance or other misconduct by such person."

[the word "misconduct" if it is to have any degree of certainty must, I consider, have reference to some provision of the licence or to the regulations to be made under the Ordinance. I say this notwithstanding the definition in section 2 of the Interpretation Ordinance of "Ordinance" as inclusive of subsidiary legislation]. The words "upon any breach..." and "on proof to his satisfaction ..." are, as is clear from the disapproval by the Judicial Committee, to which I have already referred, of the approach adopted in Sugathadasa v. Javasinghe⁽⁵⁾, not conclusive to exclude a duty to act judicially but are "introductory of the matter to be considered". Again any decision by the licensing authority is subject to appeal albeit to the Governor in Council, a body whose decision is subject neither to appeal nor to certiorari by reason of section 64(3) of the Interpretation Ordinance. That sub-section, be it noted, expressly preserves the right (if it exists) of persons affected to go by way of certiorari rather than appeal.

With all these considerations in mind I am satisfied that the statute has not made itself clear so that a consideration of the three matters outlined in Duravappah v. Fernando⁽³⁾ is necessary to determine whether the licensing authority acts so as to be subject to the audi alteram partem principle and to the remedy of certiorari. The nature of the property held is a licence necessary to the carrying on of business by the complainant of injustice; the licensing authority is entitled to intervene "on breach" of the licence and the sanction imposed is revocation of the licence which must by its nature affect the applicant financially. As appears from the licence itself it is granted in consideration of an annual fee. It is also to be noted that by the terms of the regulations breach of the licence is made an offence so that the licensing authority to arrive at his conclusion must be satisfied of the commission of an offence. All these factors satisfy me that he exercises a function which is not purely administrative and that the principle audi alteram partem applies and the remedy by certiorari lies.

I next ask myself is there an "error of law on the face of the record". The letter in question states more than it is bound to state it gives the reasoning of the licensing authority when arriving at his conclusion that the applicant has transferred lent or hired his licence:

"If the justices state more than they are bound to state, it may, so to speak, be used against them, and out of their own mouths they may be condemned, but there is no suggestion that apart from questions of jurisdiction a party may state further matters to the Court, either by new affidavits or by producing anything that is not on the record. So strictly has this been acted on, that documents returned by the inferior court along with its record for example have been excluded by the superior court from its consideration."

and again the jurisdiction of the superior court is

"of supervision not of review. That supervision goes to two points: one is the area of the inferior jurisdiction and the qualifications and conditions of its exercise; the other is the observance of the law in the course of its exercise."

(per Lord Sumner in Rex v. Nat Bell Liquors Ltd.⁽⁶⁾). This supervisory capacity of the court of King's Bench as distinct from its appellate jurisdiction

"extends not only to seeing that the inferior tribunals keep within their jurisdiction, but also to seeing that they observe the law. The control is exercised by means of a power to quash any determination by the tribunal which on the face of it, offends against the law."

Per Denning L.J. (as he then was) in Rex v. Northumberland Compensation Appeal Tribunal Ex Parte Shaw⁽⁷⁾.

In dealing with the contents of the record in the same case Denning L.J. had this to say at page 352:

The letter which I have set out is the "record" in our case. According to that letter what the authority was presented with was "sufficient evidence that you have not been in control of the business of the dance hall". That structure in itself is ambiguous for the word "control" is indefinite. The sentence may mean that the applicant has not been in personal control but has entrusted control to a manager; equally it may mean that the degree of control exercised is inadequate; thirdly, it may mean that someone to the exclusion of the applicant has assumed control. The ambiguity is not reduced when the applicant is informed that "the Lido Dance Hall is not being run by you as a licensee should do" which is also ambiguous in that the allegation may be that inadequate or insufficient control is exercised by the applicant himself, or (depending on where the emphasis is placed) that the applicant is not himself running the dance hall thus carrying the implication that a licensee must himself run the hall - a duty nowhere imposed. Again although the condition the breach of which is alleged is that the licensee shall not transfer lend or hire his licence, the letter does not state whether this condition has been broken by transferring the licence, by lending it or by hiring it. This is perhaps unimportant because if it is impossible (as it is, as a matter of logic) to conclude that the licence has been transferred because the applicant has not been "in control" of the business it is equally impossible to conclude that the licence has been lent (or hired) because he has not been in control. The authority has given his reasons. He has said why he is satisfied that the condition has been broken but no reasonable adjudicator could have been so satisfied for the reasons he gives. This error is in my view an error of law. Evidence of lack of control is insufficient evidence to show transfer, lending or hiring.

I would therefore allow this application with costs.

(1) (1951) A.C. 66.

(2) (1965) 1 W.L.R. 77.

(3) (1967) 2 A.C. 337.

(4) (1964) A.C. 337.

(5) (1958) 59 N.L.R. 457.

(6) (1922) 2 A.C. 128 at 154-6.

(7) (1952) 1 K.B. 347.