KIMBALL WONG v. CYNTHIA FOK SHIN YEE AND ANOTHER

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JUDGMENT

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Roberts, C.J.

Chronological Background

Substance of the dispute

1. The affidavit of FOK Tso Moon, the executor, dated 14th October, 1978 in support of the Originating Summons, sought the direction of the court as to whether he had a general power of appointment in respect of the residuary estate of the testator.

2. The important paragraph of the will, on which guidance was sought, reads as follows -

"If there shall be a residue of the (said) surplus (after making provisions as aforesaid), the executors shall have full power to divide (such) residue among such persons as they may deem fit, and no other persons shall have any right to interfere with, and make inquiries into, the matter, ......".

 

3. Zimmern, J's. conclusions in his judgment delivered on 12th December, 1979 may be summarized as follows -

Distributions

4. Having obtained this ruling as to the construction of the will, the executor distributed about $7 Million of the residuary estate among the persons named in the will.

5. We are satisfied, though the affidavit of the defendants' solicitors does not in terms admit it, that each of the defendants received, as his share of the residuary estate, about $706,000 (taking a round figure) during 1981.

6. These distributions of residue were made by the executor on the basis of a scheme which was drawn up by him and communicated by his solicitors to the defendants by letter dated 30th October, 1980. The scheme proposed that the residue should be divided into 105 shares. These would be distributed among the beneficiaries and each of the defendants would receive ten shares. The letter sought the views of the addressees on the proposed scheme, making it clear, however, that the executor reserved the full power of appointment as conferred upon him by the deceased's will, and his general power as executor, and that the letter should not be construed in any way prejudicial to those powers nor be treated as a binding promise on his part.

7. On 19th November, 1980, the solicitors acting for the first defendant replied to the executor's solicitors, seeking a complete inventory of the deceased's properties, and a financial report on the administration of the estate, stating that the failure of the first defendant to comment on the scheme as a whole was not to constitute her acceptance of the proposal nor a waiver of her right to challenge the executor's exercise of his power of appointment.

8. Throughout 1981 and the earlier part of 1982, correspondence continued between solicitors for the executor and for the defendants, the latter seeking more information as to the administration of the estate and not receiving replies which satisfied them.

9. On 26th February, 1982, solicitors for the first defendant expressed dissatisfaction with the explanation given on behalf of the executor as to the distribution of the residuary estate and informed him that they had been instructed to instituted proceedings against him.

10. On 14th April, 1982, the executor signed a deed, in purported exercise of his special power of appointment, in which he, as the sole executor of the will, appointed himself as the sole donee and beneficiary of the residuary estate so far unadministered.

11. The defendants' solicitors were informed of the appointment by the executor of himself as sole beneficiary of the undistributed residue by a letter dated 23rd April, 1982. In the same letter, the executor offered to transfer to the defendants as gifts inter vivos, substantial numbers of shares owned by the testator in a Malaysian company.

12. On 1st December 1982, the defendants' solicitors accepted the offer of shares, but without prejudice to their clients' contention that the appointment made by the executor to himself was wholly ineffective.

13. The executor's solicitors informed the solicitors for the defendants on 2nd December, 1982, that the executor was prepared to give the shares to the defendants as a gift inter vivos, but not subject to any qualification such as the defendants had suggested. No distribution these shares was subsequently made to the defendants.

Present action

14. By the present application, the executor seeks to strike out the appeal of the two defendants. In the alternative, he asks directions be given as to service of the notice of appeal and seeks leave to amend the original Originating Summons, so that what are seen as additional issues of interpretation of some importance may be settled on the hearing of the main appeal.

Estoppel by conduct

15. The principal ground on which the executor relied in support of his motion to strike out the appeal was that the defendants were estopped by their conduct from challenging the judge's interpretation of the will.

16. The executor's argument can be summarized as follows -

17. In support of his proposition counsel for the executor drew our attention to Re Lart⁽¹⁾ and Abuakwa v. Adanse⁽²⁾.

18. In Re Lart^(l), a judge decided in 1883 that a fund under a will should be distributed in a certain manner, under which ruling Mr. & Mrs. Wilkinson benefited. On the death of Mrs. Wilkinson in 1894, her husband sought to reopen the question of the construction of the will. Chitty, J. held that by his conduct after and under the judgment, he was estopped from challenging the earlier interpretation.

19. In Abuakwa. v. Adanse⁽²⁾, M had sued B in 1940 for declaration of title to land in Ghana. Abuakwa and Adanse knew of the proceedings but were not parties to them. In 1954 Abuakwa and M claimed title to the land, as against Adanse and B.

20. The Privy Council decided that Abuakwa was estopped from raising the question of title to land in the 1954 proceedings by reason of` his inactivity in the 1940 proceedings, when it had been open to him to intervene.

21. In both these cases, therefore, there was a gap of several years between the earlier judgment and the fresh proceedings by which the challenger sought to upset it.

22. In this instance, by contrast, the defendants, who undoubtedly did benefit under Zimmern, J's judgment, seek to challenge his conclusions by way of appeal. However, it was argued that there is no difference in principle between instituting separate proceedings and exercising a right of appeal.

23. In Lissenden v. C.A.V. Bosch Ltd. ⁽³⁾, however, the House of Lords decided that the acceptance by a workman of sums payable to him under an award in the County Court did not preclude him from appealing against the amount of the award. The House overruled Johnson v. Newton Fire Extinguisher Co. Ltd.⁽⁴⁾, a decision of the Court of Appeal to the contrary effect.

24. While Lord Maugham, at p.420 of Lissenden⁽³⁾, says that there may well be cases in which "an intending appellant is by his conduct estopped from appealing"; he does not give examples of the conduct which might remove the right of appeal.

25. Due to the failure of the executor to take appropriate steps to perfect the order of Zimmern, J, the defendants were within time when seeking leave to appeal. They were obliged to seek such leave not by reason of any lapse of time, but because they were seeking to be joined as parties in a matter in which they had not previously been involved. Had they been parties to the Originating Summons, they would have had a right of appeal.

26. In our judgment, therefore, the circumstances of this appeal are covered by Lissenden⁽³⁾. It is an exercise of appellate rights in the same action, not an attempt to vary a previous decision by separate proceedings. So no question of estoppel by conduct arises here.

Estoppel by convention

27. As an alternative, counsel for the executor advanced the proposition that there had been an estoppel by convention.

28. He founded this argument on the Texas Bank Case⁽⁵⁾ in which it was decided that, if parties in the course of dealing have acted upon an agreed assumption of a state of facts, each party is estopped from questioning the truth of those facts.

29. This authority does not seem to us to be applicable to the instant case, in which the parties shared a mutual belief that the distribution of part of the residue to the defendants was made in accordance with the interpretation given by Zimmern, J. to the will. There was never any agreed assumption that the defendants were entitled in law to any share of the residue, it being made clear to them in the executor's letter of 30th October, 1981, that the proposed distribution was an exercise of discretion and was not intended to derogate from it.

Conclusion

30. For the above reasons, the application must fail.

31. The second defendant did not appear at the hearing and was not represented.

32. The first defendant shall have the costs of the application in any event.

33. Counsel for the first defendant did not oppose paragraph 2 of the plaintiff's motion. Accordingly, we order that -

34. The first defendant shall set down the appeal for hearing not later than 21st July, 1985.

(1)    [1896]2 Ch. 788

(2)    [1957] 2 A.E.R. 559 (P.C.)

(3)    [1940] A.C. 412

(4)    [1913] 2 K.B. 111

(5)    [1982] Q.B. 84