Lee Tak Yee v. Lee Tak Yan and Others
Read the full judgment text of HCA 766/2008 on BabelCite. This Court of First Instance judgment was delivered on 10 March 2010 before Chu J.
Civil practice – striking out – family burial ground – claim in breach of trust, breach of contract, and breach of Global Settlement Agreement – whether pleadings disclose viable causes of action – Civil procedure – O.18 r.19(1)(a) and/or inherent jurisdiction – Estates of deceased parties – whether claims can lie against estates for breaches occurring after death – Trusts – whether trust of burial ground rights was properly constituted – whether trust property identifiable – whether trustees were appointed and accepted office – whether beneficiaries ascertainable – rule against perpetuities – open class gift – void for uncertainty – Conveyancing and Property Ordinance (Cap 219) s.5(1)(b) – declaration of trust in land – writing required – Contract – family arrangements – whether contractual scheme pleaded – offer, acceptance, intention, consideration – analogy to constitution of unincorporated association rejected – implied term of settlement deed – business efficacy – contradiction with express terms – estoppel by deed – abuse of process – costs on indemnity basis – certificate for two counsel. Held: the plaintiff and defendants are all members of the extended Lee family, descendants of Lee Tim Cho and Lee Ng Shi, divided into the HT Lee branch (including CC Lee's sons) and the HY Lee branch (including MW Lee and the plaintiff). The family burial ground at Pok Fu Lam Chinese Christian Churches Cemetery consists of 16 plots acquired under licence in 1935. Under Schedule 6 of the 2004 Global Settlement Agreement, the 1st defendant (TY Lee) was acknowledged as the absolute owner of burial plot Nos. 32 and 33, and granted the plaintiff permission to be buried at plot No. 32. The plaintiff's three pleaded causes of action all arise from the burial of HF Lee and the laying of a plague at plot No. 27. The trust claim is unsustainable: the pleading is internally inconsistent as to when the trust was created (1935 or 1940s), the trust property is not identified with certainty, the defendants are not shown to have been appointed or to have accepted trusteeship (Robinson v. Pett; Richards v. Delbridge), the trust conflicts with the plaintiff's acknowledgement of TY Lee's absolute ownership, the trust offends the rule against perpetuities as an open class gift (Re Ridley), the objects ('senior son' and 'generational business leader') are conceptually uncertain (Anangel Atlas), and the trust is not in writing as required by s.5(1)(b) of Cap 219. The contract claim is unsustainable: the pleading does not identify the contract, the parties to it, or the consideration, and improperly treats membership of the family as automatic contractual assent. The implied term claim under the Global Settlement Agreement is unsustainable: the implied term is not necessary for business efficacy, is contradicted by the express acknowledgement of TY Lee's absolute ownership, and is barred by estoppel by deed. The claim against the 4th defendant was stayed due to his bankruptcy. The action was dismissed, the Statement of Claim was struck out, and the plaintiff was ordered to pay costs on an indemnity basis with a certificate for two counsel, the court finding the claims blatantly frivolous and vexatious amounting to abuses of process.
Legal issues: Whether the trust claim is sustainable on pleading · Whether the trust is void for perpetuity or uncertainty · Whether the contract claim is sustainable on pleading · Whether the Global Settlement Agreement claim based on an implied term is sustainable
Outcome: The Statement of Claim was struck out and the plaintiff's action against the 1st to 3rd and 5th to 21st defendants was dismissed. The 4th defendant had been adjudicated bankrupt, staying proceedings against him. The court also made an order nisi that the plaintiff pays the defendants' costs on an indemnity basis with a certificate for two counsel, the court characterising the claims as blatantly frivolous and vexatious amounting to abuses of process.
Cited by 4 cases
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HCA766/2008 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 766 OF 2008 ----------------------- BETWEEN
----------------------- Before : Hon Chu J in Chambers Date of Hearing : 21 and 22 September 2009 Date of Decision : 10 March 2010 ----------------------- DECISION -----------------------
1.There are two summonses before the court taken out on (i) 24 June 2008 by the 1st to 9th defendants, the 1st and 2nd named 10th defendant and the 11th to 19th defendants; and (2) 9 July 2008 by the 3rd named 10th defendant and the 20th and 21st defendants. Both summonses seek to strike out the Statement of Claim and to have the plaintiff’s action dismissed. 2.Subsequent to the issue of the summonses, the 4th defendant was adjudged bankrupt on 31 August 2009. Consequently, the proceedings herein as against the 4th defendant have been stayed. The parties 3.The plaintiff and all the defendants (except Leung Hon Shun, Alexander) are all members of the Lee family. 4.Lee Tim Cho and Lee Ng Shi were the great grandfather and great grandmother of the plaintiff. Lee Tim Cho and Lee Ng Shi had two sons called Lee Chau Nam (also known as HT Lee) and Lee Ngan Nam (also known as HY Lee). 5.Lee Man Wa (“MW Lee”) is the son of HY Lee. He married Ng Chun Wah. They had two sons and four daughters. Lee Tak Yan (“TY Lee”) (the 1st defendant) and the plaintiff are their eldest and youngest sons. As for the daughters, they are Lee Kim, Lee Jick and Lee Chi (the 5th to 7th defendants respectively) and Lee Jin, deceased. Chen Park Kuen (the 2nd defendant) is the husband of Lee Jin and the administrator of her estate. Lee Cho Min Raymond (the 4th defendant) is the son of TY Lee. In this action, apart from being sued in their personal capacity, TY Lee and Lee Kim are also sued in their capacity as executors of the estates of their parents (the 8th and 9th defendants). 6.HT Lee and his first wife had five sons and two daughters. Lee Chai Cheong, deceased (“CC Lee”) is their eldest son. The other sons are Lee Chai Kwong, Lee Chai Hong (the 11th and 12th defendants), Lee Chai Yan, deceased and Lee Chai Tip, deceased. According to the plaintiff, Lee Chai Hong died in 2005, but he only learned of this lately. Yuen Chau Ling (the 19th defendant) is his wife. Moreta Lee (the 14th defendant) is the wife of Lee Chai Yan. The two daughters are Lee Wai Ying and Lee Wai Ming (the 13th and 17th defendants). 7.Lee Hon Yuen Kenneth, Lee Hon Yin, (the 15th and 16th defendants), Lee Hon Fai (“HF Lee”) and Lee Hon Cheung (the 21st defendants) are the sons of CC Lee. By his last will, the 15th and 16th defendants and HF Lee were appointed executors of the estate of CC Lee. HF Lee died on 9 October 2006. Leung Hong Shun, Alexander (the 20th defendant) is the executor of his estate. Apart from being sued as the executor of HF Lee’s estate, Alexander Leung is also sued (in his capacity as the personal representative of HF Lee and together with the 15th and 16th defendants) in the capacity as the executors of CC Lee. As noted above, Alexander Leung is not a member of the Lee family. 8.Edward Lee (the 3rd defendant) is the son of Lee Chai Tip. Lee Hon Sang (the 18th defendant) is the son of Lee Chai Kwong. The family burial ground 9.The subject matter of the plaintiff’s complaint in this action concerns the burial of HF Lee and/or the laying of a plague in memory of him at the burial ground (“the family burial ground) in Pok Fu Lam Chinese Christian Churches Cemetery (“the cemetery”). The cemetery is a private cemetery managed by Hong Kong Christian Churches Union (“the cemetery authority”). 10.It is common ground that in about 1935, HT Lee and HY Lee acquired from the cemetery authority a licence to use the family burial ground. The family burial ground consists of 16 burial plots (Nos. 1 to 8 and 26 to 33). For each of the burial plots, the cemetery authority had issued a burial plot certificate, which is one of the proofs required to be produced for effecting burial at the burial plot. 11.The family burial plot is notionally divided into two sides, with Lee Ng Shi being buried in the central burial plot (plot No. 4). HT Lee and his two wives were buried to her left. In front of the tombs of HT Lee and his wives were the tomb of Lee Chai Yan and the combined tomb of CC Lee and his wife (occupying burial plot No. 27). 12.As for HY Lee and his wife, they were buried to the right of Lee Ng Shi. In front of their tombs were the tombs of MW Lee and Ng Chun Wah (occupying burial plots no. 30 and 31). To the right of the tombs of MW Lee and Ng Chan Wah are burial plots no. 32 and 33. It is not in dispute that the plaintiff has obtained permission to be buried at plot no. 32 upon his death. 13.Standing between the respective tombs of CC Lee and MW Lee are burial plots no. 28 and 29. They are currently unoccupied. 14.When HF Lee died in 2006, a plague in memory of him (“the Plague”) was laid in the family burial ground. It measures 1 foot by 1 foot and does not elevate from the surface of ground. The Plague was laid at the foot of the platform slab of the tomb of HF Lee’s parents at burial plot No. 27. The Global Settlement Agreement 15.On 5 February 2004, a Global Settlement Agreement was executed by 11 sets of parties to settle 24 sets of legal proceedings and disputes. The plaintiff and the defendants (save and except Alexander Leung and Lee Hon Cheung) are among the parties to the Global Settlement Agreement. 16.Of particular relevance to this action is Schedule 6 to the Global Settlement Agreement, which relates to burial plot Nos. 32 and 33 of the family burial grounds. For the present purpose, the following provisions in Schedule 6 are relevant:
Legal proceedings 17.In March 2008, the plaintiff commenced judicial review proceedings against the cemetery authority complaining about the laying of the Plague. The thrust of the complaint is that with the laying of the Plague, the total length of the tomb of HF Lee’s parents exceeds the maximum length for a platform slab prescribed by the Cemetery Management Rules laid down by the cemetery authority. The plaintiff challenges the cemetery authority’s view that there is no breach of the Cemetery Management Rules and seeks to quash its decision not to interfere with the laying of the Plague. The judicial review proceedings are pending. 18.Subsequently on 5 May 2008, the plaintiff issued the writ in the present action. The defendants were granted leave to withhold the filing of their defence pending the determination of the striking out applications Statement of Claim 19.The Statement of Claim pleads three causes of action, namely, breach of trust, breach of contract and breach of the Global Settlement Agreement. 20.Paragraphs 1 to 8 of the Statement of Claim deals with the family background, the acquisition of the family burial ground by HY Lee and HT Lee and their intention and agreement and understanding at the time of the acquisition. 21.Paragraphs 9 to 11 come under the heading of “Subsequent Agreements and Arrangements”. These paragraphs plead that some time in the 1940s, there were certain agreements and understandings between HY Lee, MW Lee and CC Lee on the restrictions to the use of the family burial ground. They were that: (1) daughters would not be buried in the family burial ground; (2) only the senior son of his generation of each branch of the family would be buried in the family burial ground; (3) if the senior son did not wish to be buried in the family burial ground or was not permitted by the cemetery authority to be buried there, the right would pass to the next senior son; and (4) these arrangements could be altered with the agreement between the then heads of the two branches of the family: paragraph 9(3), (5) and (6). The pleading also explains that senior son does not necessarily connote the eldest son but might mean the “generational business leader of that branch of the family”: paragraph 9(4). 22.Of specific importance is paragraph 10, which reads:
23.Paragraphs 12 and 13 plead the trust relied upon by the plaintiff. They read:
24.The contract on which the plaintiff sues is pleaded in paragraphs 14 and 15. They read:
25.Paragraphs 16 to 21 relate to the Global Settlement Agreement. Specifically, it says it was an implied term of the Global Settlement Agreement so as to give business efficacy to the agreement, that the parties to the agreement would not deal with the burial plot inconsistently with the agreements and understandings or in such a way that would damage the value to the plaintiff’s tight to be buried at burial plot No.32. 26.The plaintiff’s case of breach by the defendants is set out in paragraphs 22 to 29. It says that the burial of HF Lee at the family burial ground is a breach of the trust, the contract and the Global Settlement Agreement. On breach of trust, paragraph 26 pleads that:
27.As to breach of contract and breach of the Global Settlement Agreement, paragraphs 27 to 29 state:
28.Paragraphs 30 to 34 deal with damage and relief. It is said that the plaintiff suffers loss and damage in that the burial of HF Lee at the family burial ground devalues the plaintiff’s right to be buried there. The plaintiff seeks an order compelling the defendants to cause the remains of HF Lee to be buried elsewhere and to remove the Plague and all other memorials of HF Lee, specific performance of the arrangements and agreements, damages and equitable compensation. 29.At the hearing, Mr Coleman SC for the plaintiff clarified that, despite the several references to “tong” in the Statement of Claim, the plaintiff is not suing on the basis of a Chinese “tong”. It is therefore not necessary to address the submissions of the defendants’ counsel on this aspect. It also follows that the references to “tong” in the pleading ought in any case to be struck out. The trust claim 30.I deal firstly with the claim in breach of trust. It is the plaintiff’s case that he sues in the capacity of a beneficiary. The Statement of Claim has not differentiated between the defendants or specified the capacity in which they are sued. On the face of it, it will appear that all the defendants who are members of the Lee family are sued as trustees. Although it is not pleaded that all the defendants all in breach of trust, the relief is sought against all the defendants. For the plaintiff, it is suggested that it is necessary to name those defendants against whom there is no plea of a breach of trust because they are beneficiaries of the trust in question. As commented by Mr Wong in the reply, the plaintiff’s children, who are no doubt also beneficiaries on the plaintiff’s case, have been joined. 31.Further, in respect of MW Lee, Ng Chan Wah and CC Lee, any interest they had as beneficiary would have ceased either upon their deaths or upon their burials at the family ground. The joining of their estates and the executors of their estates as parties to the trust claim is unnecessary. As far as they are concerned, the trust claim against them must be struck out. 32.In the case of Alexander Leung sued as the personal representative of HF Lee in HF Lee’s capacity as one of the executors of CC Lee, the claim must be struck out. This is because on the death of HF Lee, his office together with its incidents, rights, duties and powers and the estate and interest in the properties vested in him as executor, devolve upon the surviving executors: Eyre v. Countess of Shaftsbury (1725) 2 Peere Wms 105, 121. The estate of HF Lee therefore does not have any rights or duties as executor of CC Lee’s estate. The joinder of the 20th defendant is misconceived. 33.As for the other defendants, the trust claim also faces a number of fundamental problems. In the first place, the pleading does not show how the trust was created or came into existence. There is no plea of any declaration of trust. It is unclear whether the trust is express, implied or created by operation of law. The plaintiff’s written submissions referred to common intention constructive trust, citing the case of Lloyds Bank v. Rossett [1990] 1 All ER 1111, 1116 and 1118. There is, however, no plea of a constructive trust. The case of Lloyds Bank v. Rossett is also irrelevant to the present consideration. It is a case where the Court was concerned with ascertaining the agreement and common intention of the parties, who were husband and wife, when matrimonial assets were acquired. The present case is entirely different. In any case, HY Lee and HT Lee, who acquired the family burial ground, had died and the plaintiff has not pleaded the basis on which their common intention is to be inferred or ascertained. 34.The only possible indication in the Statement of Claim of a creation of trust is in paragraph 13, which pleads that HY Lee, MW Lee and CC Lee “constituted a trust of the rights associated with the family burial ground”. On the second day of his submissions, Mr Coleman SC confirmed that the plaintiff’s case is that HY Lee, MW Lee and CC Lee created the trust in the 1940s. However, on the plaintiff’s pleaded case (paragraphs 5 and 6), when HY Lee and HT Lee acquired the family burial ground in 1935, they did so under a common intention, agreement and understanding as to the use of the family burial ground. Accordingly, on the pleading, a settlement of a trust over the family burial ground would have already been made by HY Lee and HT Lee in 1935. There is no plea, and it is not the plaintiff’s case, that the trust created in 1935 had failed or was revoked. There is thus no room for a second trust to be constituted in the 1940s by HY Lee, MW Lee and CC Lee. 35.The second main problem with the trust claim concerns what is the trust property and how it is vested in the defendants insofar as they are sued as trustees. The Statement of Claim has not given a clear definition or description of the trust property. Although the earlier paragraphs refer to the purchase of the family burial ground by HY Lee and HT Lee, it is common ground that what they acquired in 1935 was only a licence or the right to use the burial ground. Paragraphs 12 and 13 and the subsequent paragraphs in the Statement of Claim refer to “rights associated with the family burial ground”, but the rights are not particularized. On a plain and reasonable reading and having regard to the terms of the agreements and understandings pleaded, the rights would be referring to the rights to use the family burial ground. And on the pleading, this will appear to be the subject matter of the trust relied upon by the plaintiff. However, Mr Coleman SC in his submissions suggested that the subject matter of the trust extends to the right to control who could be buried in the family burial ground. This has not been pleaded and is not something apparent from the pleading. Such a contention is also incompatible with the pleas that the terms and conditions on the use of the family burial ground are matters of common understanding and agreement passing from generation to generation and binding on all members of the family. As a matter of logic, if there were the common understanding and agreement, it is difficult to comprehend how a separate distinct right to control who could use or be buried at the family burial ground and a trust over such right can arise. Further as a matter of law, it is difficult to see this can fit into the concept of trust, which involves the trustees holding the legal title or interest of the trust property with the beneficiaries having a beneficial interest in the trust property. 36.That aside, for a trust to arise, the trustee must have been vested with the trust property. The Statement of Claim does not show how it is that the defendants were given the trust property (irrespective of what it is) to hold on trust for the beneficiary. 37.The third main problem with the trust claim relates to who are the trustees and how are the trustees constituted. Paragraph 12 of the Statement of Claim pleads that by virtue of the matters in the preceding paragraphs, HY Lee, MW Lee and CC Lee constituted themselves trustees and also constituted any persons entitled to exercise the rights associated with the family burial ground trustees. As stated above, on the Statement of Claim, the trustees to the trust created in 1935 would be HY Lee and HT Lee. Upon their deaths, the trusteeship would devolve on their estates and the trustees of their estates. Quite apart from the point that it is not possible to have another trust constituted in the 1940s, there is no proper basis for the plea that HY Lee, MW Lee and CC Lee constituted themselves the trustees of the family burial ground. 38.The plea that HY Lee, MW Lee and CC Lee constituted any persons entitled to exercise the rights associated with the family burial ground is tantamount to saying that the trusteeship is capable of and has been passed down from generation to generation. The pleading also seems to suggest that by reason of the communication to them of the agreements and understandings between HY Lee, MW Lee and CC Lee, members of the Lee family, including the defendants, have become trustees. The plaintiff has, however, not shown how these pleas and contentions can be supported as a matter of law. 39.In addition, there is no plea that any of the defendants has accepted the position of trustee. It is trite law that a trustee must agree to and accept his duties as a trustee and a person cannot be compelled to act as a trustee: Robinson v. Pett (1734) 3 Peere Wms 249, 251. For a person to make himself a trustee there must be an expression of intention to become a trustee: Richards v. Delbridge [LR] 18 Eq 11, 15. There is therefore no legal basis for the pleas in paragraphs 12 and 13 that HY Lee, MW Lee and CC Lee were able to and did bind the future heads of the branches of the family to act as trustees in relation to the family burial ground. 40.Moreover, the plaintiff’s case that TY Lee is a trustee of “the rights associated with the family burial ground” is in direct conflict with the acknowledgement and acceptance under clause 2.1 of Schedule 6 to the Global Settlement Agreement, that TY Lee is the absolute owner of the right to the use of burial plot Nos. 32 and 33. 41.It is argued that clause 2.1 is subject to the proviso that “nothing in the foregoing shall conflict with the undertaking and grant given by TY Lee below”. However, what was granted by TY Lee to the plaintiff is the permission or right to be buried at burial plot No. 32 and TY Lee’s undertaking only relates to his not doing or omitting to do or causing the arrangement in Schedule 6 to fail, including not making objection to the Church Authority. The proviso does not detract from the fact that the plaintiff has accepted that, in relation to the rights to use burial plot Nos. 32 and 33, TY Lee holds the rights as absolute owner. 42.It is also argued that TY Lee and other defendants who hold certificates to the burial plots in the family burial ground cannot have full and absolute beneficial interest because they cannot possibly have complete discretion as to the use of the burial plots and that there must be terms and conditions attached to the burial plots and the relevant certificates. In my view, it does not follow from the contention that the use of the burial plots in the family burial ground is subject to terms and conditions that a trust must be in existence and/or that TY Lee or other member(s) of the family who hold certificates to the burial plots must be trustees. The plaintiff must show a viable cause of action and plead the necessary facts and elements for a trust to arise. A trust cannot arise as a matter of deductions. 43.Fourthly, even assuming that a trust has been properly pleaded, the trust will be invalid and/or unenforceable at law. As pointed out by Mr Liang, the common law rule against perpetuities will apply and render the trust asserted by the plaintiff invalid. As set out in Re Ridley (1879) 11 Ch D 645, 649:
44.The trust asserted by the plaintiff is said to include all members of the Lee family from time to time. It is an open class gift and the members of the class can be increased or decreased outside the perpetuity period (i.e. a life in being and 21 years after). The trust can go on indefinitely as long as the family continues to have descendants and the trust property is made inalienable. Plainly, it offends the rule against perpetuities and cannot be upheld. 45.Mr Fung SC also argued that the trust asserted by the plaintiff is void for uncertainty of object. The pleaded terms of the understandings and agreements between HY Lee, MW Lee and CC Lee are that only the senior son of his generation of each branch of the family would be buried in the family burial ground. On the plaintiff’s case, the trust is for the benefit of the senior son of each branch of the family. According to the plaintiff, “senior son” does not necessarily connote the eldest son and “might mean the generational business leader”. It is submitted that the meaning of the terms “senior son” and “generational business leader” are uncertain and vague. I agree. On the plaintiff’s pleaded case, the meaning of “senior son” may shift and it is unclear when this will be referring to the eldest son and when it will mean “generational business leader”. The concept of “generational business leader” is a matter of value judgment that will differ from person to person and may also change over time. The pleading gives no indication as to how the generational business leader to be ascertained and importantly to be judged by whom and at what point of time. 46.Further, to the extent that the subject matter of the trust is the rights associated with the family burial ground and that this relates to the rights to use the family burial ground, it will be a trust respecting interest in land. Under section 5(1)(b) of Conveyancing and Property Ordinance, Cap. 219, a declaration of trust respecting land or any interest in land shall be manifested and proved in writing signed by the settlor. There is no plea that the trust relied on by the plaintiff was created or contained in writing. It is true that under the requirement does not apply to a constructive trust and a resulting trust: section 5(2) of the Ordinance. But the Statement of Claim has not pleaded that the trust in question is a constructive or resulting trust. As the pleading now stands, the trust is unenforceable in law for not being in writing. And as stated in other parts of this Decision, the plaintiff has not shown a proper basis for a claim in constructive trust or resulting trust. 47.The plaintiff argues that if indeed the trust is void, unenforceable and/or fails for uncertainty, then the trust property becomes held upon resulting trust for the original settlors. Two points are to be made on this argument. First, the plaintiff’s written submissions (paragraph 75) suggest that the resulting trust will be in favour of the estates of HY Lee and HT Lee. This must be on the basis that the trust was settled by HY Lee and HT Lee in 1935 when they acquired the family burial ground. This is directly at odds with his case that the trust was constituted in the 1940s by HY Lee, HT Lee and CC Lee. Second, HY Lee had only one son, MW Lee. Under clause 2.1 of Schedule 5 to the Global Settlement Agreement, the plaintiff has given up all rights and interests in the estate of MW Lee. Even if there were to be a resulting trust in favour of the settlors, the plaintiff will have no entitlement to maintain a claim on it. 48.Fifthly, there are difficulties in making out a case of breach against the defendants. On paragraph 26 of the Statement of Claim, the parties said to be in breach of the trust are TY Lee and the brothers or remaining sons of CC Lee who exercises control of the rights associated with the family burial ground. Plainly, the plaintiff has not been able to say and has no positive case as to which of CC Lee’s brothers and remaining sons is in breach. The plea of breach is general and vague. 49.Apart from this, the major plank in the plaintiff’ s case is that the defendants are bound by certain common understanding and agreement because the agreements and understandings between HY Lee, MW Lee and CC Lee had been communicated to them and they are aware of them. In his affidavits opposing these applications, however, the plaintiff stated that Lee Chai Kwong (the 11th defendant), a brother of CC Lee, would not have knowledge of the understanding and agreement because he did not have any significant role in the family. He even went into great length to demonstrate that Lee Chai Kwong had no or only a minor role in the family. In so doing, the plaintiff confirms Lee Chai Kwong’s case that he had no knowledge of the understanding or agreement pleaded. In these circumstances, it is difficult to see how the plaintiff can make out a case that Lee Chai Kwong is a trustee and that he has acted in breach of trust. 50.In the case of Lee Hon Cheung (the 21st defendant), one of CC Lee’s remaining sons, the plaintiff also admitted that he is unlikely to have any direct knowledge of the common understanding and agreement because he was not born when the relevant discussions and agreements were made. Again, this lends support to Lee Hon Cheung’s case that he has no knowledge of the understanding or agreement pleaded. It also follows that there is no basis for saying that Lee Hon Cheung is in breach of trust. 51.There is also a problem relating to the plaintiff’s entitlement to sue as a beneficiary. The trust pleaded by the plaintiff is in respect of the rights associated with the family burial ground. As a result of the Global Settlement Agreement, the plaintiff has obtained the permission and right to use burial plot No. 32. As such, any interest the plaintiff can have in the trust as pleaded would have been administered. From another perspective, even there is a breach of trust; the plaintiff will have suffered no loss as a beneficiary. There must be a serious doubt whether the plaintiff has any entitlement to bring a claim to enforce the trust. 52.In short, the trust claim is unsustainable on pleading and bad in law. It should be struck out. The contract claim 53.I next deal with the claim in breach of contract. At the outset, it is obvious that no cause of action in breach of contract can be laid against the estates of MW Lee, Ng Chan Wah and CC Lee. Any breach of contract would not have accrued during the lifetime of MW Lee, Ng Chan Wah or CC Lee, given that the death of HF Lee and the laying of the Plague occurred after their deaths. The contract claim against the executors of their estates (the 8th to 10th defendants) must be struck out. 54.Similarly, no cause of action for breach of contract can be brought against Alexander Leung as the personal representative of HF Lee. The contract asserted by the plaintiff is a contract among members of the Lee family. Alexander Leung is not such a member. The alleged breach did not occur during the lifetime of HF Lee. His estate cannot be liable for the alleged breach arising from the burial of his dead body. The contract claim against the 20th defendant should therefore be struck out. 55.In respect of the other defendants, the contract claim also suffers from several fundamental problems. The first is that the pleading has failed to plead the essential elements for the creation of a contract and contractual relationship. The Statement of Claim has pleaded certain agreements and understandings between HY Lee, MW Lee and CC Lee: paragraph 9; and that these agreements and understandings were communicated to subsequent members of the family: paragraph 10. It then goes on in paragraph 12 to aver that the agreements and understandings amounted to a contractual scheme by which all subsequent members of the family had to be bound. There is no elaboration of what is meant by the “contractual scheme”. It is not clear what exactly is the contract relied upon by the plaintiff; whether it is referring to the agreement and understanding, hence a contract, between HY Lee, MW Lee and CC Lee in the 1940s, or whether it is a fresh contract between subsequent members of the Lee family. 56.Significantly, the Statement of Claim has given no particulars as to the circumstances under which the defendants became parties to the contract or contractual scheme. There are also no particulars as to when and in what manner the defendants had accepted the terms of the contract or contractual scheme and become bound by them. Paragraph 15 of the Statement of Claim refers to “implicit accord … without demur”, but there is no elaboration on the basis of the averment. It is trite that the legal requirements for the creation of a contract are many, including offer and acceptance, the presence of an intention to be legally bound and consideration. Mere communication of the agreements and understandings between HY Lee, MW Lee and CC Lee cannot in law make the defendants parties to a contract and/or be contractually bound by them. At the most, the pleading only suggests a contract between HY Lee, MW Lee and CC Lee. 57.The reference to unwritten constitution and the attempt to draw analogy with the constitution of an unincorporated association in paragraph 14(2) of the Statement of Claim is simply misplaced. On the face of it, the pleading seems to say that members of the Lee family will upon birth automatically become parties to the contract asserted by the plaintiff and be bound by it. This cannot be right as a matter of contract law. 58.The pleading is also unclear as to what is the consideration for the contract sued upon. Paragraph 14(1) pleads that subsequent members of the family had to be bound if they wished to be and remain members of the family and to take all the benefits associated with such membership, including reciprocal observance of the arrangements. The desire to receive benefits is being pleaded not as a matter of consideration, but as a matter of reason why subsequent members have to be bound. 59.Mr Liang also submits that even if a contract has been properly pleaded, it will be void for uncertainty. It is said that the terms as pleaded and in particular the terms “senior sons” and “generational business leader” are vague and uncertain. As analyzed above in the context of the trust claim, there is considerable force in the submission that these terms are conceptual uncertainties that invalidate a contract: Anangel Atlas Compania Naviera SA v. Ishikawajima-Harima Heavy Industries Co Ltd [1990] 2 Lloyd’s Rep 526, 545. 60.Another major problem in the contract claim is the plaintiff’s own admissions that Lee Chai Kwong, Lee Hon Cheung and probably some other defendants (whether by reason of their insignificant role in the family or their young age) would not have knowledge or direct knowledge of the agreements and understandings upon which the contract or contractual scheme is based. The admitted lack of knowledge on the part of these defendants is critical to the contract claim. Given that the claim is constructed upon the communication of the agreement and understanding from generation to generation and an implicit accord, the lack of knowledge will mean it has no leg to stand on. 61.Finally, the contract claim also suffers from the same defect of failing to show a breach on the part of the defendants. Paragraph 27 of the Statement of Claim pleads that members of the family who caused or acquiesced in the burial of HF Lee are in breach of contract. There is no plea that any or which of the defendants was privy to, involved in or had knowledge of the burial of HF Lee. There is also no evidence to shed light on this. Indeed it appears from the submissions that the plaintiff is not able to say who was involved or had caused the burial of HF Lee and the laying of the Plague at the family burial ground. The plaintiff seems to say that some of the defendants must have been involved, but that is hardly sufficient to maintain the claim. It is also an abuse to bring a claim against a defendant against whom the plaintiff does not have a basis for saying he has committed the act(s) of breach. 62.For these reasons, the claim in breach of contract is unsustainable and ought to be struck out. The Global Settlement claim 63.I move lastly to the claim in breach of the Global Settlement Agreement. At the outset, given that there is no dispute that HF Lee and Lee Hon Cheung are not parties to the Global Settlement Agreement, they should not have been sued on the claim in the first place. The claim against the 20th and 21st defendants must be struck out. 64.The plaintiff’s claim on the Global Settlement Agreement is based on an implied term that the parties to it: (i) would not deal with the burial plots inconsistently with the agreements and understandings; (ii) would not deal with the burial plots in such a way as to damage the value of the plaintiff’s burial right in respect of burial plot No.32; and (iii) would act to ensure the other members of the family observe (i) and (ii) above. It is pleaded that the term was implied in order to give business efficacy to the Global Settlement Agreement. However, given that the plaintiff has permission to use burial plot No.32, it cannot be that the implied term is necessary to give business efficacy to the agreement in the sense that without it, the Global Settlement Agreement or Schedule 6 to it would become ineffective. 65.In addition, there is no mention in Schedule 6 or other part of the Global Settlement Agreement, of the agreements or understandings. On the contrary, the plaintiff acknowledges that TY Lee is the absolute owner of the rights to use burial plot Nos. 32 and 33 and that he himself has no entitlement to claim to be the symbolic head of MW Lee branch of the family. Schedule 6 further draws a distinction between the HY Lee side of the family burial ground and the HT Lee side of it, which demonstrates an intention of the parties to the agreement to keep separate the affairs of the two sides of the burial ground. In these circumstances, the implied term asserted by the plaintiff is directly contradictory to the express terms in the Global Settlement Agreement. 66.Moreover, as the plaintiff has unequivocally acknowledged TY Lee’s absolute ownership and rights over the use of burial plot Nos. 32 and 33 in the Global Settlement Agreement, which was executed as a deed, the doctrine of estoppel by deed applies: Snell’s Equity (31st edition) para.10-01. As the pleaded implied term is contrary to the express terms in the Global Settlement Agreement, the plaintiff is estopped from asserting it. 67.As with the trust and contract claim, the Global Settlement claim also faces the problem of not able to show which of the defendants is/are in breach. The assertion that the burial of HF Lee or the laying of the Plague at the family burial ground will devalue the plaintiff’s right to be buried at burial plot No. 32 is also hard to follow. The plaintiff has put a value of HK$138 million to his right to be buried at burial plot No.32 and has placed great emphasis on this. There is however nothing in the Global Settlement Agreement and evidential basis to substantiate this assertion. 68.The plea of implied term and the claim in breach of the Global Settlement Agreement are therefore bad and should be struck out. Conclusion 69.For the reasons set out above, I order that the Statement of Claim be struck out and the action as against the 1st to 3rd and the 5th to 21st defendants be dismissed. 70.I also make an order nisi that the plaintiff pays the 1st to 3rd and the 5th to 21st defendants the costs of the action, including the costs of the striking out application, to be taxed on indemnity basis if not agreed, together with a certificate for two counsel. I have tentatively awarded the costs on a higher scale as I consider that, for reasons set out above, the joinder of the majority of the defendants is neither proper nor necessary and the claims are blatantly frivolous and vexatious, amounting to abuses of process.
Mr Russell Coleman SC and Mr Jeremy S K Chan instructed by Messrs Stephenson Harwood (formerly Stephen Harwood & Lo) for the plaintiff. Mr Patrick Fung SC, Mr William M F Wong and Mr Alan K T Kwong instructed by Messrs Liu, Choi & Chan for the 1st to 3rd, 5th to 9th defendants, the 1st and 2nd named 10th defendant and the 11th to 19th defendants. Mr Alfred Liang instructed by Messrs Pang & Associates for the 3rd named 10th defendant and the 20th and 21st defendants. |
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