Cheng Chung Pong and Another v. Wong Ching and Others
Read the full judgment text of HCMP 53/1970 on BabelCite. This High Court CFI judgment.
1. I heard this case in chambers but adjourned the judgment into open Court.
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HCMP000053/1970 IN THE SUPREME COURT OF HONG KONG ORIGINAL JURISDICTION MISCELLANEOUS PROCEEDINGS NO. 53 OF 1970 -----------------
----------------- Coram: Briggs J. in Court Date of Judgment: 12th December, 1970. ----------------- JUDGMENT ----------------- 1. I heard this case in chambers but adjourned the judgment into open Court. 2. The testator Cheng Kwok Sang was a Chinese male domiciled in Hong Kong and he executed his will in accordance with the provisions of the Wills Act, 1837 on September 30th 1943. 3. The testator died on February 5th, 1944 and probate of the will was granted in the Supreme Court on January 30th, 1947. 4. The testator appointed three persons to be his trustees for the purposes of the will. They have all died. The present trustees are Cheng Chung Pong and the Chartered Bank Hong Kong Trustee Limited. 5. The testator had two sons and a daughter. We are not concerned with the daughter. The sons were Cheng Chung Pong who is now one of the trustees and Cheng Chung Fai. Cheng Chung Pong has never married and has not adopted a son. I was told that he is now aged about fifty and is an invalid. He is one of the Plaintiffs and also the sixth defendant in these proceedings. A Plaintiff since he is a trustee of the will: a Defendant since he is a beneficiary under it. Cheng Chung Fai has died but is survived by his widow, Cheng Yuen Yuk Lan who is the third Defendant. 6. The testator left a very large estate consisting of property in Hong Kong, Malaya and in Mainland China. The will contained inter alia certain provisions for trusts for the accumulation of surplus income which were found to offend the provision of the Accumulation Act, 1800 which applied in Hong Kong at the relevant time. Such moneys which had in fact been accumulated were and are distributable as upon an intestacy i.e. in accordance with Chinese law and custom. This matter has been dealt with by a Separate Summons and a distribution was made in accordance with Chinese Law and custom of part of the sum so accumulated. 7. Half the sum was paid to the sixth Defendant, the surviving son of the testator, and certain payments were made and are being made to various relatives of the testator in accordance with custom. However there remains a balance which is available to satisfy any claim which may be made through or under Cheng Chung Fai, the deceased son of the testator, or otherwise. 8. The widow of Cheng Chung Fai purported to exercise the power contained in Clause 11 (m) of the will of adopting a son to her deceased husband. Unfortunately she did not adopt a child of the description contained in that clause. This matter also came before me on another summons when a declaration was made that the child adopted by the 3rd Defendant though validly adopted according to Chinese law and custom, had not been adopted in accordance with the terms of the will of the testator, and so was not entitled to claim any interest under the will. By consent a lump sum payment of $250,000 was set aside and invested for the child out of the estate, and the question whether he had an interest in any moneys which are in future distributable as upon an intestacy was specifically left open. 9. The present summons is concerned with the interpretation of clause 11 (n) of the will. It reads as follows.
10. The situation anticipated in this clause has come to pass. One son of the testator has died. His widow has not made a valid adoption. And the time for her so doing has long elapsed. 11. This summons is brought by the present trustees of the will who are as I have said the surviving son of the testator and the Chartered Bank Hong Kong Trustee Limited. The clause gives the trustees the power to adopt a male child of a certain description. Such child when adopted is to have the same benefits under the will as if he had been a natural son of the deceased. The summons is brought to determine whether such a power is valid and may be validly exercised by the present trustees. 12. Mr. Cheung Q.C. and Mr. Fung appeared for the trustees and argued that clause 11 (n) in effect conferred a power of appointment which was exercisable by the trustees. The trustees had a duty by virtue of the trust to appoint one of a class of persons to be the beneficiary under the will. Their duty is to find out who the relatives of Cheng Chung Fai are who conform to the description contained in clause 11 (n) of the will. That is who is a male child of the surname Cheng, of the Hakka clan, and is under five. When that class of persons has been determined the trustees must appoint one of that class to be the beneficiary under the will and he will then take as if he were the son of Cheng Chung Fai's body. It is emphasised that the trustees must act, that the will imposes a duty on them to do so. 13. Mr. Yu appeared for the sixth defendant, the surviving son of the testator and Mr. Martin Lee appeared for the third defendant, the widow of the deceased son of the testator. Mr. Yu argued that the word "adopt" as used in the will means adopt in in accordance with Chinese law and custom, that a posthumous adoption is indicated and that the trustees cannot adopt in accordance with custom. He argued that to spell out a power of appointment from the words of clause 11 (n) was to do violence to the plain words and intention of that clause. The consequence is that since such an adoption cannot be made there is an intestacy so far as the portion of the estate which would devolve upon a child adopted in accordance with the will had a child been so adopted. Mr. Martin Lee associated himself with the arguments of Mr. Yu. 14. I will deal with Mr. Yu's argument first. The will was executed in 1943; the deceased died in the following year and probate was granted in 1947. It was not until 1956 that the Adoption Ordinance was enacted in Hong Kong. However posthumous adoption i.e. the adoption by the head or elders of a clan of a son to carry on the family line, where there is no successor, is a very ancient custom of the Chinese people. At the time of the making of the will, so the argument goes, the testator must have had such a posthumous adoption in mind. This is shown from the paragraphs of the will previous to clause 11 (n). It is there stated that the sons of the testator can adopt a son, that if the sons die without issue the widow can adopt a son and it is only when that fails that the trustees come into the picture. 15. There is evidence before me from gentlemen learned in Chinese law and custom that strangers to the family or clan cannot exercise the customary right of posthumous adoption. This is not in dispute. Mr. Yu argued that since the trustees are strangers particularly the Bank, they cannot, are not competent to make a posthumous adoption. Clause 11 (n) of the will is therefore a nullity as it has turned out. 16. Mr. Yu also relied upon the case of Rhodes v. Rhodes(1). That case which is a decision of the Privy Council, established the rule that when construing a will, to quote part of the headnote-
17. Clause 11 of the will uses the word 'adopt' which is a word with a clear and definite meaning. It does not mean appoint. Nor does the will refer to a power of appointment. 18. I will say at once that I do not think that the testator was spelling out as it were the Chinese custom of posthumous adoption. He may have had that in mind but what the will sets out is not that custom. That custom has nothing to do with trustees; nor in custom is the choice of the person to be adopted restricted as it is in the will, to a person of a certain age in years and of a certain surname. If the testator had wished to rely on the custom he could have achieved his object in at least two ways - either by stating that that custom should operate upon the happening of certain events or by saying nothing, leaving the matter in the hands of the elders of the family. 19. All the indications in the will are that the testator did not intend his estate to devolve in accordance with Chinese custom. In clause 12 of the will a trust is created one of the objects of which is to pay the expenses of the maintenance of, and the worshipping at, the ancestral graves each year. This is one of the duties of the trustees. Apart from recognition given in the will to the customary status of concubines, this is the only part of the will, a document of 14 pages, where attention is paid to Chinese custom, if, indeed, such a reference can be so interpreted. 20. The will is in the English language, it creates trusts and two Reserve Funds; it is provided that one of the trustees shall always be a solicitor: none of this remotely resembles the devolution of an estate under Chinese law and custom. Finally the testator uses the expression "it shall be competent" - Clause 11 (n) states 'it shall be competent for my trustees to adopt' etc. By custom it is not competent for them to exercise such a power. The above words in my view clearly mean "despite Chinese law and custom my trustees may adopt etc". The whole intention of the will is to dispose of the estate in accordance with English law, the law of Hong Kong. 21. At the time of the making of the will Hong Kong was occupied by the Japanese forces. However the Japanese authorities did not abrogate the existing laws of Hong Kong. They were still in force. Probate was for example, regularly granted in accordance with the law and practice immediately preceeding the Japanese invasion. 22. The case of In re Tse Lai Chiu(2) is authority for the proposition that a Chinese domiciled in Hong Kong may dispose of his property by will made in accordance with English Law. Chinese Law and custom governs succession on an intestacy of a Chinese domiciled here. But such a person has full testamentary power in accordance with English Law. 23. The will of the testator must therefore be construed according to the principles of English law. I think that the intention of the testator is clear from the terms of the will. His property is to remain in the family and to be tied up as long as the law allows. 24. The bulk of the estate is divided into two halves. One half is to go to each of the sons. We are only concerned with one half, that designated for Cheng Chung Fai. His share is to descend to his sons or adopted sons. Such adopted sons are to come from a restricted class the particular person from such class to be chosen by Cheng Fung Fai's widow, failing which by the trustees of the will. 25. The intention of the testator is that if certain happenings occur the share of Cheng Chung Fai shall land in the lap of a relative who must be a boy surnamed 'Cheng', of the Hakka clan who is under five years when the choice is made. 26. The custom of posthumous adoption is unknown to English law. Nor have I been referred to any case where provision has been made for an adoption in a will. Such a provision however in my view, would not necessarily be against public policy. 27. I do not think that the testator was considering a posthumous adoption according to Chinese law and custom for the reasons I have already given. What he was doing was making sure that a relative from a restricted class would inherit his property. Once the class of such persons is ascertained then the trustees are to appoint or choose the person to succeed. The word "adopt" in the will was mistakenly used. It cannot mean adopt in its true meaning since posthumous adoption is meaningless in English law. However the intention of the testator is abundantly clear and in my view it is necessary to construe the relevant clause as conferring a power of appointment among a restricted class upon the widow and the trustees. That is to say that the testator was conferring a power of special appointment on his trustees. 28. I think it is right to reach this conclusion. The well known case of In re Ragdale(3) Farwell J. had this to say at page 355
29. Though I quote that admirable passage I will say at once that there is no room for speculation "on what the testator might have intended" in the present case. The intention is to me at least, abundantly clear as I have indicated above. 30. The answer to the first question contained in the summons may be stated thus that the trustees are at liberty to adopt or choose or appoint a relative of the testator's son Cheng Chung Fai of the description contained in clause 11 (n) of the will for the purposes of that clause. It follows from this that the answer to question two in the summons is Yes. 31. As to the third question. The twenty-first anniversary of the death of the testator was February 5th, 1965. In other proceedings I have already held that the surplus income arising from that date until the adoption of a child by the trustees must be treated as on the intestacy of the testator. 32. There remains one final point. Mr. Cheung argued that the power given to the trustees by clause 11 (n) is a power coupled with a duty, namely that the trustees are under a duty to exercise the power there conferred : That it is a power which cannot be released, it must be exercised. My attention was drawn to the case of In re Wills' Trust Deeds(4). Part of the headnote of that case reads as follows-
33. In my view the power given to the trustees under the will are of such a nature and is not a power which the trustees may release. 34. There will be an order accordingly. 35. There will be a certificate for two counsel for the proceedings in chambers on December 3rd, 1970. 36. Costs of all parties including those of the hearing in chambers on 26th September, 1970 to come out of the Surplus income remaining in the hands of the trustees which has accrued since February 5th, 1965. These costs to include of course those referable to the obtaining of expert evidence of Chinese law and custom. 37. Liberty to apply.
Representation: O.V. Cheung and Patrick Fung (Deacons) for Plaintiff Martin Lee (Woo & Woo) for 3rd Defendant Patrick Yu (P.C. Woo & Co.) for 6th Defendant Judgment read in Court (1) 1882 7 Appeal Cases 192 (2) ...(illegible) (3) 1934 Ch. 352 (4) 1964 Ch. 219 |