NG JACK FONG v. NG CHAN NING

DCCJ 2830/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2830 OF 2005

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Judgment

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1.  This is the Plaintiff’s application by way of his Summons dated 22 November 2005 (“the Summons”) for:

(1) summary judgment against the Defendant for the delivery up of vacant possession of the premises (“the Premises”) known as Flat C, 14^th Floor, Win Field Garden, nos. 34-40, Shan Kwong Road, Hong Kong;

(2) interlocutory judgment with damages to be assessed for the use of the Premises by the Defendant.

Background

2.  The registered owner of the Premises is and was at the relevant times one Madam Ng Li Man Kuen (“the Deceased”), who passed away on 14 November 1995.

3.  The Deceased was the mother of the Defendant.  Since 1967, the Defendant has been living in the Premises with his own family.

4.  The Plaintiff, Mr. Ng Jack Fong (“Ng Senior”), is the father of the Defendant.

5.  On 17 July 1995, Ng Senior and the Deceased respectively executed a will of effectively identical terms under a mutual wills agreement.

6.  As the terms of the Deceased’s will (“the Mother’s Will”) are relevant to and important for the determination of this matter, I set them out in full as follows:

“1. I hereby revoke all former Wills and codicils and testamentary dispositions heretofore made by me and declare this to be my last Will.

 2. Whereas my husband [i.e., the Plaintiff] and I have agreed with one another to execute wills of even date and in similar terms and have further agreed that such respective will shall not hereafter be revoked or altered either during our joint lives or by the survivor after the death of one of us now in reliance upon such agreement.

 3. I appoint my husband Ng Jack Fong (吳績鋒) (Holder of Hong Kong Identity Card No. XXXXXXX(X) of 14^th Floor, 34 Shan Kwong Road, Win Field Garden, Hong Kong to be the sole executor and trustee of this my Will (hereinafter called “my Trustee”) and in case my said husband shall die in my lifetime or shall renounce probate or refuse or be unable to act in the office of executor or trustee then I appoint my son NG CHAN NING (吳燦寧) (Holder of Hong Kong Identity Card No. XXXXXXX(X) of 14^th Floor, 34 Shan Kwong Road, Win Field Garden, Hong Kong to fill any vacancy in the office of executor or trustee hereof that may occur thereby.

 4. I declare that in the subsequent clauses of this my Will the expression “my Trustee” shall (whenever the context so permits) mean and include the trustee or trustees of this my will for the time being hereof whether original additional or substituted.

5. If my said husband shall survive me for the period of one month I devise and bequeath all my real and personal property whatsoever and wheresoever (including any property over which I may have a general power of appointment or disposition by will) to my husband absolutely and without any sort of trust or obligation.

 6. If my said husband shall predecease me or shall not survive me for the period aforesaid I direct that clause 4 hereof shall not take effect and this my will shall be construed and take effect as if the said clause 4 had been wholly omitted therefrom and that the following clauses of my will shall have effect.

 7. I direct that if my husband shall survive me for a period of less than one month then the income of my estate accruing from the date of my death until the date of the death of my husband shall be accumulated and form part of my residuary estate.

 8. I devise and bequeath all my real and personal property whatsoever and wheresoever (including any property over which I may have a general power of appointment or disposition by will) to my trustees upon trust to sell call in and convert the same into money with power to postpone the sale calling in and conversion thereof for so long as they shall in their absolute discretion think fit without being liable for loss and to divide the net proceeds of such sale calling in and conversion and any ready money belonging to me at my death after payment thereout of my debts funeral and testamentary expenses and all estate duty for my said son NG CHAN NING (吳燦寧) absolutely. ”

7.  Pursuant to the mutual wills agreement (as set out in clause 2 of the Mother’s Will), Ng Senior also made a will (“the Father’s Will”) of identical terms as that of the Mother’s Will, save that the references to “my husband” and “my said husband” respectively in clauses 5, 6, 7 and 8 have been substituted by the references to respectively “my wife” and “my said wife” in the Father’s Will.

8.  The Deceased died on 14 November 1995.   On 23 September 1998, Ng Senior as the sole executor as appointed under the Mother’s Will was granted probate of the Deceased’s estate (“the Estate”) by Grant No. HCAG000642/98.

9.  By reason of clause 5 of the Mother’s Will, the Plaintiff thus inherits the Deceased’s properties (including the Premises); while the Defendant will be the sole beneficiary of the Plaintiff’s estate upon the Plaintiff’s death under clause 8 of the Father’s Will.

10.  Apparently, some time in January 1999, by a deed signed by the Defendant (“the Deed of Renunciation”), the Defendant expressly declared and agreed to renounce all his interest in respect of Ng Senior’s estate under the Father’s Will.  The Deed of Renunciation is stated to be signed in the presence of one Dennis Kwok Wai Hung as a clerk to Messrs. Karbhari & Cham, a firm of solicitors.  The Deed of Renunciation however does not provide for the exact date when it was signed, save that its content page is headed with the words “THIS DEED is made the      day of January One Thousand Nine Hundred and Ninety-nine”.   The Plaintiff says that the deed was made on or about 14 January 1999.

11.  By a document (“the Revocation Document”) dated 14 January 1999, Ng Senior revoked the Father’s Will.  The Revocation Document expressly refers to the Deed of Renunciation.  The signing of the Revocation Document by Ng Senior is stated to be witnessed by one Mr. Kwok Wai Hung (“Kwok”).   By way of an affirmation dated 7 March 2006, Kwok confirms that he is the same Dennis Kwok Wai Hung who allegedly witnessed the Defendant’s signing of the Deed of Renunciation.

12.  Further, in a deed of acknowledgement and Irrevocable Deed of Disclaimer (“the 2000 Deed”) signed by the Defendant on 21 August 2000 at 3:35 pm (as stated on the signature page below the Defendant’s signature), it is stated that the Defendant acknowledges and admits that the Deed of Renunciation has full legal effect and is binding on him, and insofar as necessary, he irrevocably renounces, disclaims or otherwise waives all his rights, powers, interests, benefits and entitlements whatsoever under the Father’s Will absolutely.  The Defendant further acknowledges and admits the revocation of the Father’s Will by Ng Senior under the Revocation Document.  It is also stated in the 2000 Deed that one Ho Ching Pong (“Ho”), a solicitor of Messrs. Edmund W. H. Chow & Co, had purportedly interpreted its contents to the Defendant and witnessed the Defendant’s signing of it.

13.  By a letter dated 6 May 2004 (‘the Notice”), the Plaintiff through his solicitors, Messrs. Deacons (“Deacons”), gave a 7 days’ notice to the Defendant that his licence to stay in the Premises was to be revoked and terminated, and that he should move out of the Premises by the end of the notice period.

14.  Notwithstanding the Notice, the Defendant has not moved out of the Premises as demanded by the Plaintiff.

15.  In September 2004, the Defendant suffered a stroke, which has resulted in his speech disability.

16.  The Plaintiff brought the present action seeking, inter alia, vacant possession of the Premises and damages for the use of the Property by the Defendant from 13 May 2004 up to the date of the delivery up of vacant possession of the Premises.

The various hearings of the Summons

17.  At the first hearing of the Summons on 24 April 2006, after Mr. Ma for the Plaintiff had made part of his submissions, Mr. Ng for the Defendant repeated his observation (which is also stated in his skeleton filed a day before the hearing) that clause 5 of the copy of the Mother’s Will exhibited to the Plaintiff’s supporting affirmation (as exhibit “NJF-2”) was incomplete, and thus it was unclear as to whether the Deceased had by the Mother’s Will bequeathed the Premises to the Plaintiff.  In light of that observation and after explaining that it was his instruction that that copy of the Mother’s will was the best copy that the Plaintiff could get hold of at that time, Mr. Ma asked for an adjournment so as to allow the Plaintiff to try to locate and produce a better copy of the Mother’s Will.  

18.  I granted the adjournment and ordered that costs of the adjournment be in the cause of the Summons.

19.  The adjourned hearing of the Summons was resumed on 11 July 2006, and the Plaintiff through the affidavit of Kwan To Pui, a solicitor of Deacons, exhibited a clearer copy of the Mother’s Will.

20.  However, at this adjourned hearing, the Defendant was no longer legally represented and he appeared in person together with his wife.  The Defendant had significant difficulty in expressing himself properly because of his speech disability.  With the assistance of his wife, he managed to indicate to this Court that he was no longer financially able to afford his lawyers and that he did not have sufficient time to familiarize himself with the papers for the purpose of the hearing.  Given the Defendant’s condition and his indication that he needed more time to go through the papers, I further adjourned the hearing of the Summons to 21 July 2006.

21.  At the hearing on 21 July 2006, with Mr. Ma’s consent, I asked the Defendant’s wife to act as a McKenzie friend to assist him in making submissions.

The Plaintiff’s case

22.  The basis of the Plaintiff’s pleaded claim is a simple one.  Since the Defendant had been residing in the Premises based on a licence granted by the Deceased, the licence necessarily came to an end upon the death of the Deceased.  As I understand it, it is also the Plaintiff’s case that thereafter, the Defendant could only be residing at the Premises under a licence, which is revocable at will by the Plaintiff as executor of the Estate.

23.  In the premises, on the expiry of the Notice on 12 May 2005, as the Plaintiff had lawfully revoked the licence, the Defendant should deliver vacant possession of the Premises to the Plaintiff.  In failing to do so, the Defendant has been since 13 May 2005 trespassing the Premises.

The Defences

24.  By way of the Defence and Counterclaim, his affirmations and the skeleton submissions filed in opposition to the Summons, the Defendant opposes the claim on the principal basis that he is the beneficial owner of the Premises, as his interest in the Premises was “crystallized” when the Plaintiff revoked the Father’s Will and/or claimed for vacant possession of the Premises.  It is the Defendant’s case that these conducts of the Plaintiff are in breach of the mutual wills agreement between the Deceased and the Plaintiff.  The Defendant further counterclaims for an order that the Plaintiff do assign and/or assent the premises to the Defendant.

25.  By way of his affirmations, the Defendant also says that the Deed of Renunciation and the 2000 Deed are not binding on him, because he signed them under the misrepresentation and/or undue influence of the Plaintiff in the following circumstances:

(1) At the material times, there had been a protracted dispute amongst him, Ng Senior and the Defendant’s younger brother, Ng Chan Sing, Charles (“Charles Ng”) on the running and management of the family’s business.

(2) Ng Senior eventually sided with Charles Ng, and the Defendant was effectively ousted from any further participation in the family’s business.

(3) In order to protect his interest and to compensate his loss by being oust from the family’s business, the Deceased told the Defendant that she would give and devise the Premises to him after her death.  She further told the Defendant that he could own the Premises forever.   It is the Defendant’s case that the Plaintiff agreed to this intention of the Deceased.

(4) After the death of the Deceased, at the heat of arguments arising from these disputes, and upon the father’s indication that he should not get any of the Plaintiff’s own assets, the Defendant agreed not to claim any interest in the Plaintiff’s personal assets.  As such and purportedly for that purpose, the Plaintiff had given the Defendant documents to sign at the office of the family’s company.  Upon the Plaintiff’s representations that these documents were to relinquish the Defendant’s claim on the Plaintiff’s personal assets (which was understood by the Defendant not to include the Premises, which belonged to the Deceased), the Defendant signed those documents.

(5) It was only when he was provided with copies of the Deed of Renunciation and the 2000 Deed in these proceedings did the Defendant come to know that these were the documents that he had signed.  He was only given the signature page (but not the entire document) when he signed what has now purportedly become the 2000 Deed.  It is also the Defendant’s case that he did not sign those documents at solicitors’ office, and that there was no other person or solicitor witnessing his signature or explaining the documents to him.

The Issues

26.  Given the defences as set out above, for the purpose of the Summons, the central questions that I need to determine are as follows:

(1) Whether it is at least arguable that the Defendant has a right to remain in the Premises as he is the beneficial owner of the premises by reason of the mutual wills agreement;

(2) Whether it is at least arguable that, by reason of the Plaintiff’s revocation of the Father’s Will or claim for vacant possession of the Father’s Will, there should be a trust imposed on the Premises for the benefit of the Defendant, which entitles him a right to remain in possession of the Premises. 

Whether the Defendant has a right to remain in the Premises under the mutual will

27.  The doctrine of mutual wills, as summarized by Morritt J In re Dale [1994] Ch 31 at 37D, is:

“…to the effect that where two individuals have agreed as to the disposal of their property and have executed mutual wills in pursuance of the agreement, on the death of the first … the property of the survivor …, the subject matter of the agreement, is held on an implied trust for the beneficiary named in the wills …”

28.  As such, the survivor will usually enjoy as absolute owner the benefit of the properties so transferred to him under the mutual wills arrangement as provided in the terms of the wills, that is, he would bequeath the same to the beneficiary named in the wills as agreed between the survivor and the deceased.  Although the survivor is entitled to enjoy during his lifetime in absolute terms of the properties so passed to him, if he does anything inconsistent with the mutual wills agreement, equity will intervene and impose a constructive trust on his properties for the benefit of the originally named beneficiary in the mutual wills.  As observed by Dixon J in Birmingham v. Renfrew (1937) 57 CLR 666:

At 682-683:

“I think the legal result was a contract between husband and wife.  The contract bound him, I think, during her lifetime not to revoke his will without notice to her.  If she died without altering her will, then he was bound after her death not to revoke his will at all.  She on her part afforded the consideration for his promise by making her will.  His obligation not to revoke his will during her life without notice to her is to be implied.  For I think the express promise should be understood as meaning that if she died leaving her will unrevoked then he would not revoke his.  But the agreement really assumes that neither party will alter his or her will without knowledge of the other.  It has long been established that a contract between persons to make corresponding wills gives rise to equitable obligations when one acts on the faith of such an agreement and dies leaving his will unrevoked so that the other takes property under its dispositions.  It operates to impose upon the survivor an obligation regarded as specifically enforceable.  It is true that he cannot be compelled to make and leave unrevoked a testamentary document and if he dies leaving a last will containing provisions inconsistent with his agreement it is nevertheless valid as a testamentary act.  But the doctrines of equity attach the obligation to the property.  The effect is, I think, that the survivor becomes a constructive trustee and the terms of the trust are those of the will which he undertook would be his last will. ” (emphasis added)

At 689:

“There is a third element which appears to me to be inherent in the nature of such a contract or agreement, although I do not think it has been expressly considered.  The purpose of an arrangement for corresponding wills must often be, as in this case, to enable the survivor during his life to deal as absolute owner with the property passing under the will of the party first dying.  That is to say, the object of transaction is to put the survivor in a position to enjoy for his own benefit the full ownership so that, for instance, he may convert it and expend the proceeds if he choose.  But when he dies he is to bequeath what is left in the manner agreed upon.  It is only by the special doctrines of equity that such a floating obligation, suspended, so to speak, during the lifetime of the survivor can descend upon the assets at his death and crystallise into a trust.   No doubt gifts and settlements, inter vivos, if calculated to defeat the intention of the compact, could not be made by the survivor and his right of disposition, inter vivos, is, therefore, not unqualified.  But, substantially, the purpose of the arrangement will often be to allow full enjoyment for the survivor’s own benefit and advantage upon condition that at his death the residue shall pass as arranged. ” (emphasis added)

29.  Thus, the fundamental element in the doctrine is that the survivor is bound by the mutual agreement that he would deal with the properties in the manner as set out in his will as agreed between him and the deceased.   Equity would impose a constructive trust upon such properties, where the survivor, after obtaining the benefit of the properties under the mutual wills agreement, acts inconsistently with the agreement by for example seeking to unilaterally revoke his will or to dispose of the properties in a manner calculated to defeat the intention of the compact.    The terms of the trust so imposed are those of the survivor’s will made under the mutual wills agreement.  See:  Re Cleaver [1981] 1 WLR 939 at 947D-E, whereNourse J (as he then was) observed as follow: 

“The principle … is that a court of equity will not permit a person to whom property is transferred by way of gift, but on the faith of an agreement or clear understanding that it is to be dealt with in a particular way for the benefit of a third person, to deal with that property inconsistently with that agreement or understanding.  If he attempts to do so after having received the benefit of the gift equity will intervene by imposing a constructive trust on the property which is the subject matter of the agreement or understanding…”

30.  In light of the above principles of the doctrine of mutual wills, Mr. Ma for the Plaintiff submits that, taking the Defendant’s case to the highest, the Defendant’s interest, if any, in the Premises under the mutual wills agreement is residuary, which would only crystallize upon the death of the Plaintiff.  The Plaintiff during his lifetime is entitled to the absolute enjoyment of the Premises, subject to the caveat that the Plaintiff cannot dispose of the Premises in a manner calculated to defeat the intention under the mutual wills agreement.

31.  As such, Mr. Ma further submits that the Defendant has no defence to the present claim for vacant possession, since as a matter of law his residuary interest in the Premises does not entitle him a right to remain in it against the Plaintiff.

32.  I agree with these submissions.  Given the principles of the doctrine of mutual wills as set out above, the Plaintiff is entitled to the full benefit and use of the Premises subject to a fiduciary duty which would crystallize on his death and disables him only from voluntary dispositions inter vivos.   As said by Dixon J in Birmingham v. Renfree, supra, at p. 690:

“In In re Oldham [1925] Ch. 75 Astbury J. pointed out, in dealing with the question whether an agreement should be inferred, that in Dufour v. Pereira, 1 Dick. 419 the compact was that the survivor should take a life estate only in the combined property.  It was, therefore, easy to fix the corpus with a trust as from the death of the survivor.  But I do not see any difficulty in modern equity in attaching to the assets a constructive trust which allowed the survivor to enjoy the property subject to a fiduciary duty which, so to speak, crystallised on his death and disabled him only from voluntary dispositions inter viovs. ” (emphasis added)

33.  In the premises, I am of the view that the Defendant has failed to show a triable issue that under the mutual wills agreement, he has a right to remain in the Premises during the lifetime of the Plaintiff. 

Whether there be a trust imposed on the Premises for the benefit of the Defendant

34.  Given the Defendant’s elaborate allegations in his affirmations as to the family dispute between the parties and the circumstances under which he signed the documents as set out in paragraph 25 above, I am prepared to accept for the present purpose that there is an arguable case that the Deed of Renunciation and the 2000 Deed were signed under misrepresentation and/or undue influence.   This is further underlined by the following:

(1) There is no explanation as to why, after signing the Deed of Renunciation, the Plaintiff required the Defendant to further execute the 2000 Deed, which effectively confirms the Deed of Renunciation.  

(2) Kwok at paragraphs 6 and 7 of this first affirmation made in support of the Summons seeks to confirm that the Deed of Renunciation and the Revocation Document were signed respectively by the Defendant and the Plaintiff at the same occasion in front of him on 14 January 1999 at the solicitors’ office.  If this was the case, it is questionable as to why in relation to the Deed of Renunciation, Kwok’s name appeared as “KWOK WAI HUNG, DENNIS” and stated to be a clerk to Messrs. Karbhari & Cham, while on the Revocation Document, Kwok’s name was typed thereon as “KWOK WAI HUNG” only, and that there is no reference to his position as a clerk to the solicitors’ firm. 

35.  In light of these matters, I believe the circumstances under which the Deed of Renunciation and the 2000 Deed were signed by the Defendant call for further investigation by way of a trial, and the Defendant should be given a chance to cross-examine the Plaintiff, Kwok and Ho.

36.  If the Deed of Renunciation and the 2000 Deed are arguably not binding on the Defendant, it would also be arguable that the Plaintiff’s revocation of the Father’s Will would amount to an act inconsistent with the mutual wills arrangement.  As such, it is similarly arguable that the Plaintiff has been since 14 January 1999 been holding the Premises on constructive trust for the benefit of the Defendant in the terms as set out in the Father’s Will.  

37.  However, even though I have come to the view that there is a triable issue that a constructive trust may be imposed on the Premises subject to the terms of the Father’s Will, given the reasons set out in paragraphs 27 to 33 above, I still cannot see any legitimate or legal basis to support the Defendant’s contention that he thus has a right to remain in possession of the Premises despite the Plaintiff’s demands.  This is so because, as I explained earlier, under the authorities, albeit the Premises is subject to the trust as imposed in the terms of the Father’s Will (i.e., upon his death, the Premises or any proceeds thereof would be devised and bequeathed to the Defendant), the Plaintiff is still entitled to the full use of the Premises during his lifetime. 

38.  For the same reasons, the fact that the Plaintiff has claimed for vacant possession of the Premises cannot be regarded as an act inconsistent with the mutual wills agreement.  It must be noted that under clause 5 of the Mother’s Will, the Premises is bequeathed to the Plaintiff “absolutely and without any sort of trust or obligation”.

39.  At the hearing on 21 July 2006, the Defendant produced additional documents in relation to a claim made by the DBS Bank (Hong Kong) Ltd against, inter alia, the Defendant under an Originating Summons dated 10 July 2006 under HCMP 1372 of 2006.  By way of that proceedings, the Bank claims for vacant possession of the Premises pursuant to a mortgage dated 18 July 1988 executed by the Deceased, charging the Premises to the bank to secure the borrowing of Mi Fung Beads Co Ltd, which is one of the family business’ companies. 

40.  I do not find these documents of any assistance to the Defendant.  If any, the existence of the mortgage, which was executed before the mutual wills, rather shows that it could not have been the Deceased’s intention that the Defendant has an absolute right to any interest in or to remain in the Premises.

41.  In the premises, although I am of the view that by reason of the Plaintiff’s revocation of the Father’s Will, there is a triable issue as to whether the Plaintiff is holding the Premises on constructive trust for the Defendant not to dispose of it in any way inconsistent with the mutual wills agreement inter vivos, I have come to the conclusion that there is no defence to the present claim by the Plaintiff for vacant possession of the Premises.

Conclusion

42.  For the reasons set out above, I give judgment in favour of the Plaintiff that the Defendant do deliver up the Premises to the Plaintiff.  I further order that there be an assessment of damages for the Defendant’s use of the Premises for the period between 13 May 2004 and the time when the Defendant deliver up vacant possession of the Premises to the Plaintiff.

43.  I also make an order nisi that costs of this application under the Summons be to the Plaintiff, to be taxed if not agreed, with certificate for counsel.