NG CHI (OR TZE) FONG AND OTHERS v. HUI HO PUI FUN AND OTHERS

HEADNOTE

                    Succession - Construction of Will - Unlimited Bequest of Income - Per capita gifts to "children or lawful heirs" - Class closing rules - "Rule of convenience" presumption - "lawful heirs" - Statutory next-of-kin - "or" - "the development of Chinese culture" - Whether a valid charitable purpose - Power of appointment - Objects of power - Conceptual certainty - Whether "descendants of the Hui family/clan" conceptually certain - Whether words "transfer for management" could mean "transfer for ownership" - Testator writing his own dictionary - Mistake in will - Power of court to correct - Testator owning majority of shares in company - Testator purporting to dispose of that company's income by his will - Adoption - Bequest of HK$1 million conditional on surrendering son for adoption - Infringement of public policy -

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                    On a construction summons relating to the home-made will and codicil of a Testator who died in 1981, the court made, inter alia, the following determinations:-

A.                 Clause IV (6) of the will provided that four named children of the Testator's eldest son "and in future the children or lawful heir(s) of" his second and third sons "shall each have 1.5 per cent of the entire income" of certain shares owned by the Testator at his death. The second son had no children at the time of the Testator's death whilst the third son had two.

                    It was common ground that these unlimited bequests of income also carried the gift of the capital. It was further common ground that the gifts were per capita.

                    The question arose whether the class of persons to benefit under this sub-clause, namely, the children or lawful heirs of the Testator's second and third sons, closed on the death of the Testator, or whether it closed on the deaths of the Testator's second and third sons.

                    The court held that the presumption raised by "the rule of convenience" that only children born before the Testator's death were intended to benefit was rebutted by the circumstance of the present will and codicil. Accordingly, the class would remain open until the deaths of the Testator's second and third sons. Hence, each of the four named children of the Testator's eldest son, each of the two children of the Testator's third son living at the Testator's death, and each of any further children of the Testator's third son and any child of the Testator's second son born after the Testator's death was entitled to 1.5 per cent of the shares (subject to any necessary abatement). (Defflis v. Goldschmidt (1816) Mer. 417; in re Bellville-Westminster Bank Ltd. v. Walton (1941) 1 Ch 414 considered.)

                    "Lawful heirs" meant the statutory next-of-kin of the Testator's second and third sons. Because the court construed the word "or" disjunctively in the sub-clause, there was no scope for the words "lawful heirs" to have any significance in relation to the third son who already had children. In the case of the second son, were he to die childless, his statutory next-of-kin at his death would become entitled to 1.5 per cent of the shares (subject to any abatement).

B.                  Clause IV (16) of the will conferred a power on the trustees under the will to appoint income for "the development of Chinese culture".

                    The court upheld this as a valid power for a charitable purpose (Weir v. Crum Brown (1908) A.C. 162; Incorporated Council of Law Reporting for England & Wales v. Attorney-General (1972) 1 Ch 73; In re South Place Ethical Society, Barrallett v. A.G. (1980) 1 W.L.R. 1565; Associated Artists v. I.R.C. (1956) 1 W.L.R. 752, and Inland Revenue Commissioners v. McMullen (1981) A.C. 1 applied).

C.                  The Testator and his three deceased brothers were all surnamed Hui. By various provisions of his will, the Testator made bequests to his own children, and to the children to his three deceased brothers.

                    By Clause IV (17) of his will, the Testator conferred a power of appointment for educational purposes on his trustees in the following terms:-

"Should any of the descendants of the Hui family/clan in furture attend university or post-secondary college, then money should be set aside and paid out from my annual income to assist them."

                    The question arose for determination by the court whether the words "Hui family/clan'' satisfied the requirement of Re Gulbenkian Settlement Trusts (1970) A.C. 508 and McPhail v. Doulton (1971) A.C. 424 that the objects of a power of appointment must be conceptually certain.

                    The court ruled that by "Hui family/clan" the Testator meant the lineal descendants of himself and his three deceased brothers. As the trustees and the court would have no difficulty determining whether someone was or was not within that class, the court upheld this power.

D.                  By Clauses V and VI of the will the Testator made provision for various assets to be transferred "for management" to a company in which he owned shares. The trustees of the will argued that, in context, although the Testator had used the words "for management", he really meant "for ownership". If the trustees were correct in their contention, the effect would be to augment the value of the shares bequeathed by the Testator. Those opposing the trustees argued that the Testator had used the words "for management" in their conventional sense, with the result that the assets in question remained undisposed of and would devolve as on an intestacy.

                    The court held that this was a case where the Testator had, in effect, written his own dictionary, and that by "for management" the will meant ''for ownership".

E.                Clause X of the will provided:-

"As regards Clause V above, any rights given to and enjoyed by females shall terminate upon their death."

                    Clearly, that reference to Clause V was erroneous, since Clause V had nothing to do with rights given to females, and the Testator must have intended to refer either to clause III or clause IV, each of which made absolute bequests to a different lot of female beneficiaries.

                    As the court was not compellingly convinced which of clause III or clause IV the Testator had in mind, the court refused to cut down the absolute bequests to females under either of those two clauses, and declared clause X to be void for uncertainty (In re Follett (deceased), Barclays Bank Ltd. v. Dovell (1955) 2 All E.R. 22 applied).

F.                  By clause XI of the Will the Testator purported to dispose of the income of a company in which he owned the majority of the shares. Since the Testator did not own the company's income he was in no position to give it away, so that clause XI was void: In re Lewis's Will Trusts v. Lewis v. Williams (1984) 3 All E.R. 930 applied.

G.                  clause 4 of the codicil provided that whichever of the Testator's grandsons (P2, D9 or D10) gave his second or subsequent son to the Testator's son, D4, for adoption would receive HK$1 million. The court held this provision void on the ground it offended public policy since it tended to the separation of parent and child.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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JUDGMENT

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1. Hui Yeung Shing ("the Testator") died on the 18th December, 1981 in Hong Kong, having made his will on the 17th March, 1981 and a codicil to it on the 8th December, 1981. Both the will and the codicil have been admitted to probate, and the present proceedings are brought by the trustees for the construction of those two documents.

2. The Testator was a successful businessman who, at different times in his life, owned various hotels in Hong Kong. For probate purposes, his estate was valued at just over HK$127,012,961.78 as at the date of his death. Perhaps a little surprisingly for a businessman of such vast wealth, he did not engage a solicitor to draft his will. Instead, he relied on the services of the 3rd plaintiff, a man whom he had employed as a private secretary for over twenty years.

3. Absence of lawyers in the creation of this will goes a long way towards explaining the presence of such large numbers of them in its interpretation.

4. The 3rd plaintiff wrote out the will and codicil for the Testator in Chinese characters and those documents were duly executed by the Testator. Fortunately, there have been agreed translations of both those documents (the will: Exhibit P1A; the codicil: Exhibit P1B). The full texts of those agreed translations are set out as Appendices to this judgment - the will as Appendix I and the codicil as Appendix II.

5. Counting each sub-clause separately, the will and codicil comprise a total of thirty-nine clauses and sub-clauses. The present originating summons (as amended) comprises forty-two paragraphs and contains thirty-seven questions for determination by the court. There are twenty-two parties to the suit. There were eleven different lots of legal representation before me. The will and codicil have thus spawned litigation on a grand scale. Oral legal arguments took over ten full court days and there were also extensive written legal submissions.  

6. This judgment will generally adopt the approach of dealing with each clause of the will and codicil in numerical order, with cross-references to other clauses where necessary.

7. The will is introduced by the words :-

"I hereby decide that the estate I shall leave in future shall be distributed as follows:-"

8. On behalf of those arguing against a partial intestacy, the words "the estate" and "shall be distributed" were prayed in aid. I will come back to the significance of those words later.

9. Clause I of the will is as follows :-

10. Hui Kwok Ho ("D3") is the Testator's eldest son by his Kit Fat wife. At the time of the Testator's death, D3 was aged 60. During the Testator's lifetime, he had already set D3 up in a substantial way of business.

11. No problem arises in relation to Clause I. There is no dispute about it. It means that D3 inherited 1,000 Park Hotel Co. Ltd. shares absolutely.

12. Clause II is equally straightforward:

13. Hui Siu Wing ("D4"), the Testator's son by his Tin Fong wife, gets the shares in the Shamrock Hotel Co. Ltd. absolutely. At the time of the Testator's death, D4 was aged 47.

14. Besides having a Kit Fat and a Tin Fong wife, there was a third branch to the Testator's family, namely, the one springing from the Testator's concubine, Hui Chan Suet Ying ("D2"). Clause III relates to D2 and her son and daughter by the Testator. I now set out Clause III:-

"The properties and businesses which I presently own in Taiwan and the United States of America shall all be given to the three persons: Hui Kin-Wah (Kenneth Hui Kin-Wah), Hui Kin-Lai (Helen Hui Kin-Lai) and Hui Chan Suet Ying (Hui Chan Suet-Ying), to inherit."

15. Hui, Kin-Wah ("D5") is the son. He was aged 30 at the time of the Testator's death, whereas Hui Kin-Lai ("D6") was the daughter who was aged 28 at that time.

16. Immediately prior to his death, the Testator had an interest in five separate pieces of real estate in California. Those five properties are fully described at page 57 of the Agreed Bundle. Four of those properties he held with one or more of D2, D5 and D6 as joint tenants. By virtue of the principle of survivorship, his interest in those four properties passes automatically at his death to the surviving joint tenants so that those four properties are in no way caught by the will and codicil. In respect of the fifth piece of Californian real estate, namely 250 Golden Gate Avenue, San Francisco, the Testator was tenant in common with D2 and D6. By virtue of the provisions of Clause III of the will, D2, D5 and D6 inherit the Testator's share in 250 Golden Gate Avenue. That share will be held by D2, D5 and D6 as joint tenants : Re Clarkson [1915] 2 Ch. 216.

17. At this point, it becomes necessary to make reference to Clause X of the will. Clause X purports to cut down the entitlement of females to life interests. One line of submissions made to me contended that Clause X might have the effect of limiting D2 and D6 to life interests under Clause III. I will deal with Clause X fully when my numerical progress takes me to that point, but, in anticipation of my finding on Clause X, I now state that it has no application to Clause III in my view.

18. In addition to the real estate so far described, the Testator had four bank accounts in his sole name in the United States. The money in those four accounts now passes to D2, D5 and D6 as joint tenants by virtue of Clause III of the will. Likewise, the money in two bank accounts in his sole name in Taiwan passes to D2, D5 and D6 as joint tenants. The Testator also had one other bank account in the United States. That was with the Bank of the Orient. His account there was in the joint names of himself and D5. The doctrine of survivorship brings about the result that account passed to D5 alone immediately on the Testator's death.

19. There is no dispute about the extent of the Testator's properties in either the United States or Taiwan. Apart from the issue whether D2 and D6, as females, were confined to life interests because of Clause X, there was no dispute about the disposition of any of the Taiwan or United States properties.

20. D2, D5 and D6 have agreed amongst themselves that a severance should take place of the joint tenancies which they now hold together by virtue of the will. Then they will hold as tenants in common: Re Drapers Conveyance [1969] 1 Ch 486.

21. Clause IV has an introductory paragraph, followed by 18 sub-clauses (A nineteenth sub-clause, which would otherwise have borne number 11, was deleted). I will set out the introductory paragraph for a start, and then proceed to examine each sub-clause in turn. The introductory paragraph reads as follows:-

"As regards the properties,, (namely), Hang Shing Building at Nos. 363-373 Nathan Road Kowloon and No. 122 Austin Road Kowloon (K.I.L. No. 9385) etc. which are operated and managed by Yeung Shing Land Investment Co. Ltd., (Yeung Shing Land Investment Co. Ltd.), the income from the shares which I own shall be distributed as follows :-"

22. Yeung Shing Land Investment Co. Ltd. ("Yeung Shing") was the Testator's flagship. He owned 7,950 of the 8,000 issued shares, and was given virtually unlimited power by the Articles to run the company as he pleased. Of the other 50 shares, 10 were owned by his eldest grandson, Hui Yiu Kwan, ("P2"); 10 by the Testator's son, D5; 10 by the Testator's daughter, D6; 10 by Hui Fung Lin ("D7"), who was the wife of D3, and 10 by Hui Chiu Yee ("D8") who was the wife of D4. Each of P2, D5, D6, D7, and D8 was a director. The Testator's 7,950 shares in Yeung Shing account for $103,032,000.00 worth of the estate of $127,012,961.78 which he left.

23. The principal assets of Yeung Shing at the time of the Testator's death were Hang Shing Building and 122, Austin Road. Yeung Shing owned a half share in Hang Shing Building, the other half being owned by the Hang Seng Bank Ltd. By virtue of written agreements between Yeung Shing and Hang Seng Bank (see Agreed Bundle, p. 82), Hang Seng Bank gets slightly over 50% of the rent from the building, the balance going to Yeung Shing. No. 122 Austin Road was wholly owned by the Testator personally up till the 28th February, 1981 (about 10 days before he made his will), when he assigned it to Yeung Shing for HK$26,964,000.00. The Testator did not require immediate payment from Yeung Shing on its acquisition of 122 Austin Road, and at the time of the Testator's death, he was still owed $21,287,925.98 by Yeung Shing in respect of that property.

24. No. 122 Austin Road was the site of the Ritz Hotels. From about 1930 until his death, the Testator ran the Ritz Hotel as a sole proprietorship. From the time he assigned the building to Yeung Shing on 28th February, 1981, he paid that company rent so that he could continue to run the Ritz Hotel at that address.

25. Thus, at the time of the Testator's death, Yeung Shing was part owner of Hang Shing Building and owner of the whole of 122 Austin Road. Apart from a small amount of cash at the bank, the only other asset owned by Yeung Shing was a holding of 20,000 shares in Park Hotel Ltd.

26. In due course, it will be seen to be of significance that, by this introductory paragraph to Clause IV of the will, the Testator purpoted to give merely the income from the shares rather than the shares themselves. Various words or combination of words were highlighted during the course of argument. In particular, "namely", "etc.", the present tense "are", and "operated and managed" came under scrutiny. I will come back to those words in due course, as and when their significance becomes relevant.

27. Sub-clause 1 can now be set out :-

28. Everyone was in agreement on the affect of this sub-clause. As it amounts to an unlimited bequest to D5 of 25% of the Testator's income from the shares in Yeung Shing (see Re Lawes Wittewronge, Maurice v. Bennett, [1915] H.K.L.R. 219; Williams on Wills (5th Ed.) 504, 505; and Theobald on Wills (14th Ed.) 502), the gift also carries the corpus. Hence, D5 became entitled to 25% of the Testator's 7,950 shares in Yeung Shing. At the time of the Testator's death, D5 was aged 30. The elaborate provisions seeking to restrict D5's having full access to the bequest before the age of 45 years are of no effect. Once past the age of 21, a beneficiary takes a gift free from the type of restraints attempted by sub-clause 1: Wharton v. Masterman [1895] A.C. 186; Theobald, op. cit 630, 631, and Williams, op. cit 203, 204.

29. Attention can now be turned to sub-clause 2 which is as follows:-

"Hui Kin-Lai shall have 10 per cent (10%) of the entire income."

30. It will be recalled that Hui Kin-Lai ("D6") was the Testator's daughter by his concubine, D2. One of the most hotly contested issues in the present case was whether female beneficiaries under the sub-clauses of Clause IV take mere life interests, or whether they take absolute interests, the same as males. The problem arises because of Clause X, to which reference has already been made in the context of Clause III. Anticipating my finding on Clause X, I rule that females under Clause IV (apart from the isolated instance of sub-clause 7) take absolute interests.

31. It follows, therefore, that D6 is entitled to 10% of the Testator's 7,950 shares in Yeung Shing Land Investment Co. Ltd.

32. No problem is caused by sub-clause 3. That sub-clause reads:-

"Hui Yiu-Kwan (Dennis Hui Yiu-Kwan) shall have 10 per cent (10%) of the entire income."

33. Beside being one of the trustees of the will, P2 is the eldest son of the Testator's eldest son (D3) by his Kit Fat wife. Thus, P2 is the eldest grandson. He gets 10% of the Testator's 7,950 shares in Yeung Shing.

34. Sub-clause 4 contains a bequest to females. It relates to Hui Ho Pui-Fun ("D1"), the Testator's Tin Fong wife, and Hui Chan Suet Ying ("D2''), the Testator's concubine. I now set out sub-clause 4:-

"Hui Ho Pui-Fun (Hui Ho Poi-Fun) shall have 5 per cent (5%) of the entire income. Hui Chan Suet-Ying shall have 4 per cent (4%) of the entire income.''

35. Under that sub-clause, D1 is entitled to 5% and D2 to 4% of the Testator's 7,950 shares absolutely.

36. The next sub-clause also is concerned with females. It makes bequests to two daughters-in-law. Hui Fung Lin-Yee ("D7") is the wife of the Testator's eldest son, D3, while Hui Chiu Yee-Fan ("D8") is the wife of D4, the son by the Tin Fong wife. Each of those two daughters-in-law gets 1.2% of the Testator's 7,950 shares in Yeung Shing. Sub-clause 5, by virtue of which they take, is as follows:-

"The two persons, Hui Fung Lin-Yee (Hui Fung Lin-Yee), and Hui Chiu Yee-Fan (Hui Chiu Yee-Fan) shall each have 1.2 per cent (1.20%) of the entire income."

37. Sub-clause 6 was generally referred to as "the grandchildren clause" during the proceedings before me. That was an apt title. I will set out the clause:-

"Hui Yiu-Kwong (Hui Yiu-Kwong), Hui Yiu-Wan (Ernst Hui Yiu Wah), Hui Kit-Mui (Amy Hui Kit-Mui) and Hui Mei-Mui (Mimie Hui Mei Mui), and in future the children or lawful heir(s) of Hui Siu-Wing and Hui Kin-Wah shall each have 1.5 per cent (1.50%) of the entire income."

38. Hui Yiu-Kwong ("D9") and Hui Yiu-Wah ("D10") are the sons of D3, whilst Hui Kit-Mui (''D11") and Hui Mei-Mui ("D12") are his daughters. Hui Siu-Wing and Hui Kin-Wah, being D4 and D5 respectively, are, of course, the Testator's other sons.

39. At the time of the Testator's death, which was about 9 months after making the will, D3, who was then aged 60, had the four children specified in sub-clause 6 plus his eldest son, P2. Although omitted from this "grandchildren clause", P2 had no cause for complaint: as eldest grandson, he did far better than any of his brothers and sisters by getting 10% of the shares in Yeung Shing under sub-clause 3.

40. D4, who was aged 47 when the Testator died, has never had any children, but D5, who was 30 years old at the death, had two daughters. The elder daughter, Hui Sum Yu ("D18") was seven when the Testator died whereas her sister, Hui Sum Mun, was six then. To allay any anxiety on behalf of D18 and her sister, I mention straightaway that each of them qualifies for 1.5% of the 7,950 shares in Yeung Shing by virtue of this sub-clause 6. By any test, they are children of D5, alive at the Testator's death, and no one has suggested that they fall outside the bounty of sub-clause 6. As Mr. Edward Chan pointed out on their behalf, the reference to some point of time "in future" in sub-clause 6 would not suffice to exclude existing children. See Doe v. Hallett [1813] M & S 124.

41. The principal cause of difficulty in relation to sub-clause 6 centres on the words "in future". Those words give rise to the problem whether the class of persons to benefit under sub-clause 6 closed on the death of the Testator or whether it closes on the deaths of D4 and D5. Sub-clause 6 is clearly a gift of a legacy to each member of a class: each gets 1.5% of the Testator's shares in Yeung Shing. Each beneficiary is meant to take per capita in my view. I consider that "or" can only be  read disjunctively. The crucial question is whether the children (if any), of D4 and D5 born after the Testator's death have an entitlement under this sub-clause.

42. One way of construing "in future" is to say those words were meant to confine the operation of this sub-clause to the period between the making of the will and the Testator's death. What is known as "the rule of convenience" raises a presumption in favour of construing the will in that way. (On "the rule of convenience" generally, see Hawkins & Ryder on the Construction of Wills at pp. 127-128; Theobald, op. cit. pp. 386, 387 & 390; Williams, op. cit. pp. 539, 542). If unborn children of D4 and D5 were allowed to benefit under sub-clause 6, the result, in theory at least, could be that distribution of the estate would have to be postponed until after the deaths of D4 and D5 in case they had so many children that there had to be an abatement.

43. All the vested interests for a share of corpus under all the sub-clauses of Clause IV account for 77.15% of the Testator's shares in Yeung Shing. (For the calculation of that percentage, see Mr. Andrew Li's written submission at page 16). The need for an abatement would not arise unless D4 and D5 produced a combined total of more than fifteen additional children. So far, their combined total is two. D4 has now reached the age of 53 without producing any, whilst D5 has begotten two in his 36 years. The odds against more than fifteen new children coming forward for a 1½% legacy each must be astronomic. The trustees have already indicated they are prepared to consider paying the existing beneficiaries their legacies against indemnities.

44. Although the rule of convenience has generally much to commend it from a practical, common sense view point, it must yield if the will shows a sufficient contrary intention: Defflis v. Goldschmidt (1816) Mer. 417; In re Bellville-Westminster Bank Ltd. v. Walton [1941] 1 Ch. 414. I am satisfied in the present instance that the will does, in fact, show such a contrary intention.

45. It is possible that by "in future" the Testator intended to limit his bounty to the children of D4 and D5 born before the Testator's death. On that basis, the Testator's failure to mention D5's two daughters, who were already in being at the time of the will, could be explained on the basis that the Testator was leaving open the possibility that D5 might have more children between the time of the will and his father's death. A far more likely explanation, however, in my view, is that the Testator intended to leave the class open after his death.

46. At this point, the "armchair" principle can be prayed in aid: see Theobald (op. cit) pp. 202-213; Williams (op. cit) 477. A perusal of the will, as a whole, shows how generous he was to all branches of his family. His children did best, then his grandchildren. All of them got bequests. Great grandchildren and more remote relatives were intended to benefit under the powers which can be found in sub-clauses 12 and 17 of Clause IV and in Clause XI. Is it really conceivable that, when he sat in his armchair contemplating his family as he made his will, the Testator intended that, say, a future son of D5 or D4 should not get the same bequest as the other grandchildren who happened to be born at the time of the Testator's death? I do not think so. This conclusion is fortified by the circumstance that the Testator did not intend to bequeath his capital, only the income from it. It is because of the operation of rules of law of which the Testator was apparently unaware that gifts of capital have occurred. The operation of those rules of law has already been described in relation to sub-clause 1.

47. Light is shed on how the Testator thought his bequests would operate when one peruses sub-clause 7. I will deal with that sub-clause more fully when its turn arrives, but suffice it to say now that it granted his sister-in-law, Hui Cheng Ting-Tai ("D13"), a life interest in the income on ½% of his shares in Yeung Shing. Sub-clause 7 goes on to provide, "her children will have no right to inherit ". The implication arising from that is that the children of the beneficiaries receiving bequests by virtue of the other sub-clauses of Clause IV, do have the right to pass on the income to their children. Thus, what the Testator appears to have had in mind was that the beneficiaries, apart from D13, would have the right to pass on the income to their children, but I do not think he intended them to be able to dispose of the capital, although the law has wrought a different result.

48. The Testator wanted to tie up his money far into the future. It would be inconsistent for a man with that type of intention to want to arrange for immediate distribution of all his assets on his death. Someone who intended to tie up all his capital indefinitely into the future would be unlikely to want to contemplate his grandchildren born after his death being excluded from his bounty.

49. A somewhat technical argument based on the word "heirs" in sub-clause 6 was also advanced in support of the proposition that the class of grandchildren did not close on the Testator's death. The line of reasoning was that as no one's heir can be known till after his death (Theobald, op. cit. pp. 408-9), the Testator was looking ahead to a time after the deaths of D4 and D5 when he made the provision in sub-clause 6. According to this line of argument, the Testator had in mind the heirs of D4 and D5, who will not come into existence till after the Testator's death, and likewise, the clause contemplated children coming into existence after the Testator's death. I frankly do not think that a layman like the Testator would have attached that sort of significance to the word "heirs", but, on the other hand, the Testator's actual intention is not what counts: what counts is his expressed intention.

50. The notion that the Testator intended children born after his death to come within the ambit of sub-clause 6 gains some support from Clause 4 of the codicil which showed that the Testator contemplated that D4 might adopt a son after the Testator's death. Clearly, from Clause 4 of the codicil, the Testator wanted D4 to have a son. I would regard it as surprising if the Testator had intended that child to receive less benefit than the children born to D4 and D5 during the Testator's lifetime.

51. So far, I have concentrated on the position of the children of D4 and D5 under sub-clause 6. I now turn my attention more fully to the significance of the words "lawful heirs". To put a meaning on "lawful heirs" is only important in relation to D4 who has no children. As I have already indicated, I consider that "or" should be read disjunctively, so there is no scope for D5's "lawful heirs" to benefit from sub-clause 6 because D5 had children at the time of the Testator's death.

52. It was urged on behalf of D4's wife, D8, that she came within the description "lawful heirs" of D4 at the time of the Testator's death and, by virtue of that, she had acquired a vested right to 1½% of the Testator's 7950 shares under sub-clause 6. I consider it most unlikely that the Testator meant by "lawful heirs" of D4, the heir designate of D4 at the time of the Testator's death.

53. "Lawful. heirs" can, in an appropriate context, mean the statutory next of kin (Re Gamboa's Trusts (1858) 4K & J 757; Re Kilvert [1957] Ch 388, 393; Williams, op. cit., 598, 599), and D8 would have come within that description in relation to D4 at the time of the Testator's death. However, there is absolutely nothing in the will to indicate that, by "lawful heirs", the Testator had in mind D4's heir designate for the purposes of sub-clause 6, and, in fact, the will, as a whole, indicates quite the contrary.

54. Provision had already been made for D8 by sub-clause 5 under which she got 1.2% of the Testator's Yeung Shing shares. It is unlikely, to say the least, that the Testator intended her to get another 1.5% by virtue of the operation of a sub-clause in his will obviously intended to make provision for grandchildren.

55. Whatever might have been the Testator's intention, I am satisfied that D8 will be entitled to 1½% of the Testator's shares by virtue of sub-clause 6 in the event of her surviving D4, assuming that D4's and D8's marriage remains childless. "Lawful heirs" has the prima facie meaning of statutory next of kin, and if she survives her husband, and they have no children, I see no reason why she should not benefit under sub-clause 6. If she does not survive D4, then whoever qualifies as D4's statutory next of kin will get that 1½%.

56. Clause X has no more effect on sub-clause 6 than on any of the other sub-clauses in Clause IV, so that females take their interests absolutely.

57. The conclusion I reach on sub-clause 6, therefore, is that any sons or daughters of D4 or D5 born either before or after the Testator's death are each absolutely entitled to 1½% of the Testator's shares in Yeung Shing.

58. I have already touched upon Sub-clause 7 of Clause IV. It grants a life interest in 1/2% of the income from the Testator's shares in Yeung Shing to D13, the Testator's sister-in-law, who is now 100 years old. On her death, this 1/2% of the income from the Testator's shares in Yeung Shing will form part of the fund available to be applied for the purposes of the powers conferred by the will. For the sake of completeness, I now set out sub-clause 7:-

"Hui Cheng Ting-Tai (i.e. Cheng So) (Sister-in-law Cheng) shall have 0.5 per cent (0.50%) of the entire income for her maintenance until her death when (this) will terminate. Her children will have no right to inherit."

59. Next comes a granddaughters-in-law provision. D14, D15 and D16, who are the wives of his grandsons get 3/4% of the Testator's shares in Yeung Shing each. Sub clause 8, which brings this about, is as follows:-

"The wives of Hui Yiu-Kwan, Hui Yiu-Kwong and Hui Yiu-Wah shall have 0.75 per cent (0.75%) of the entire income."

60. Each of those granddaughters-in-law takes her 3/4% absolutely.

61. Sub-clause 9 is as follows:-

"Hui Lop Chung (Hui Lop-Chung) shall have 1 per cent (1%) of the entire income."

62. Hui Lop Chung ("D17") was described as the Testator's "adopted son" for the purpose of the proceedings before me. Clarification of his exact status within the family is a topic which has been deferred to a future occasion, if necessary.

63. By this sub-clause 9, he gets 1% of the Testator's shares in Yeung Shing.

64. Provision was made by the Testator in his will for his nephews and grandnephew. Six of them get ½% each of the Testator's shares in Yeung Shing. Hui Sing-See ("D20") presented the other five nephews and grandnephew.

65. Sub-clause 10, under which they take, is as follows:-

                  "The 6 persons:-

Hui Tze-Chun, Hui Lap Chun, Hui Lap-Kin, Hui Lap See, Hui Kwok-Kwong and Hui Sing See shall each have 0.5 per cent (0.5%) of the entire income."

66. The Testator deleted sub-clause 11.

67. Sub-clause 12 purports to make provision for the education of the Testator's great grandchildren. As can be discerned from the family tree (Appendix III post), the Testator already had nine great grandchildren at the time of his death. Mr. K M Chong represented those nine great grandchildren as well as great grandchildren yet to be born. I now set out sub-clause 12:-

"As regards the children of all my grandsons, their education expenses up to graduation from university may be drawn from my income. As regards the children of my granddaughters, if such granddaughters and their respective husbands or such granddaughters themselves are personally responsible for the upbringing and maintenance of their children, then the above (provisions) shall also apply."

68. Attacks were made against the validity of sub-clause 12 on the ground that it was void for uncertainty of subject matter. The contention was that one could not be sure what was meant by "my income". The court's attention was drawn to the contrast between the use of the words "the entire income" in sub-clauses 1 to 10, "my annual income" in sub-clauses 14, 15, 16 and 17 and "surplus income" in Clause XI. I do not think that the differing terminology has any significance for the purposes of sub-clause 12.

69. From the introductory clause to Clause IV of the will, it is clear that, by Clause IV, the Testator intended to dispose of his income from his shares in Yeung Shing. He then proceeded to make specific bequests of 77.15% of his shares. I regard it as clear beyond a peradventure that when he referred to "my income" in sub-clause 12, what he had in mind was the 22.85% of his income which remained undisposed of. That undisposed of percentage might fluctuate, depending on such eventualities as new lives in being under sub-clause 6 claiming 1½%each, or the falling in of the life interest of the Testator's sister-in-law, D13, under sub-clause 7. That "my income" could mean anything else in the context of the present will is virtually unarguable, in my view.

70. I consider that sub-clause 12 confers a valid power of appointment on the trustees in favour of the great grandchildren of the Testator born either before or after his death. This class of great grandchildren will not close until the end of the perpetuity period, for which purpose the relevant lives in being are the Testator's grandchildren and their children living at the death of the Testator plus 21 years.

71. The trustees do have a duty to consider from time to time whether or not to exercise the power conferred on them by this sub-clause 12, but, otherwise, the exercise is within their sole discretion. This power, in my view, falls under the fourth category in the system of classification of trusts and powers described in Underhills Law Relating To Trusts And Trustees (13th Edition) at page 14, namely, the will by its terms confers on the trustees, "..... a special power of appointment with an obligation to consider exercising the power, but no obligation actually to exercise the power, so that if such power be not exercised the property will either pass to those specified expressly or impliedly as taking in default of appointment or result to the settlor's estate;".

72. Sub-clause 12 was not the only educational power which the Testator conferred on the trustees. Sub-clause 17, of which more will be said in due course, likewise conferred a power for the purposes of education. The power conferred by sub-clause 17 should, in my opinion, be treated as parallel with that created by sub-clause 12.

73. Another power which I upheld is to be found in sub-clause 16. In considering whether or not to exercise the powers conferred on them, the trustees should, in my view, treat the parallel sub-clauses 12 and 17 as having priority over sub-clause 16 which relates only to surplus income.

74. Looking a long way down the road to the time when the perpetuity period expires for the purposes of sub-clause 12, a partial intestacy will arise from which the statutory next-of kin at the Testator's death will get the benefit.

75. Sub-clause 13 requires no comment. It merely appoints P2, the oldest grandson, P3 who drafted the will, and Ng Chi-Fong (P1) to be the trustees of the estate. The actual text of sub-clause 13 is as follows:-

"(I)    hereby appoint the three persons Ng Chi-Fong (Ng Chi-Fong) (Address: 2 Briar Avenue 1st Floor, Hong Kong), Hui Yiu-Kwan (Dennis Hui Yiu-Kwan) (Address: 1 Osmanthus Road, Yau Yet Tuen, Kowloon) and Hou Yuen-Kin (Hou Yuen-Kin) (Address: Flat B 17th floor, Kiu Hing Mansion, 14 King's Road, Hong Kong) to be the guardians of my estate and Yeung Shing Land Investment Co. Ltd. Each of them shall be paid travelling expenses at the rate of One hundred dollars ($100.00) per month. However such travelling expenses shall be revised according to the prevailing index of standard of living."

76. Sub-clauses 14 and 15 can be dealt with together. It is common ground that both of them create valid charitable trusts which are self-explanatory. The trustees and the Attorney-General will, in due course, submit schemes to the court for its approval, in order to give effect to this pair of charitable gifts. The text of the two sub-clauses is as follows:-

77. The validity of sub-clause 16 was hotly contested. That sub-clause is as follows:-

"If there is any surplus in my annual income, then having regard to the size of such surplus, (a) sum(s) may be set aside and donated towards the development of Chinese culture or establishing (a) school(s) of memorial value, provided that each donation shall not exceed the sum of Hong Kong dollars one million (HK$1,000,000.00).

78. The area of controversy was within a narrow compass, namely, whether "the development of Chinese culture" was too vague and uncertain to qualify as a charitable purpose recognised by the law.

79. No one disputed that establishing schools of memorial value was charitable. However, it was common ground that the word "or" had to be construed disjunctively, and that unless all the purposes embraced by sub-clause 16 were exclusively charitable, the whole sub-clause was bound to fail: Chichester Diocesan Fund and Border Finance v. Simpson & Others [1944] A.C. 341.

80. Assuming for the moment that "the development of Chinese culture" is charitable, then the sub-clause should, in my opinion, be construed as a power conferred on the trustees to make donations for the objects specified in the sub-clause in an amount not exceeding in aggregate $1,000,000.00 per year. The source of the funds is the surplus annual income from the Testator's shareholding in Yeung Shing after making provision for the amounts required by sub-clauses 12 and 17 for education. The duration of the power conferred by sub-clause 16 will be the same as that of the power in sub-clauses 12 and 17. As sub-clause 16 is limited to surplus income not required by sub-clauses 12 and 17, it presupposes the continuing existence of sub-clauses 12 and 17. When sub-clauses 12 and 17 have run their course (i.e. at the end of the relevant perpetuity period), the funds supporting sub-clauses 12, 16 and 17 will fall into residue to be available for distribution to the Testator's statutory next-of kin as at the date of his death.

81. Charities frequently are perpetual, but that is not an essential characteristic of their existence. There is no reason why there cannot be a gift to a charitable purpose for a limited period of time. Inevitably, a power to appoint for charitable purposes will have a feature shared by all powers, namely, that the power must be exercised within the perpetuity period. The Attorney General and the trustees do not dispute that.

82. Now to the crucial question: Does "the development of Chinese culture" come within the definition of "charity" at law?

83. If the gift had been simply "for the development of culture", I think the court might have been spared many of the arguments that were raised by those opposing the gift. The addition of the word "Chinese" inspired queries such as whether it was meant to extend to activities like mahjong or lantern festivals. Instead of strengthening the concept of "culture", the word "Chinese" was seized upon in an attempt to weaken it. I do not think that this was a legitimate mode of attack for reasons which I will develop. I have no doubt at all that "the development of culture" generally is a charitable purpose within both the educational (i.e. the second) and the general public benefit (i.e. the fourth) heads of charity under the preamble to the Statute 43 Elizabeth I.C4. See Commissioners For Special Purposes of Income Tax v. Pemsel [1891] A.C. 531 at 583. A fortiori, I have no doubt that, in a Chinese community like Hong Kong, "the development of Chinese culture" is charitable.

84. If a definition of "culture" is necessary, I do not think one needs to look further than the Shorter Oxford Dictionary where ''culture'' is defined as follows:-

"Improvement or refinement by education and training 1510. 5. absol. The training and refinement of mind, tastes and manners: the condition of being thus trained and refined: the intellectual side of civilization 1805."

85. Of "culture", one can say the same as Lord Robertson said of "science" in Weir v. Crum-Brown [1908] A.C. 162, 169, namely, that it "embraces a wide but perfectly ascertainable range of subjects".

86. "Development" does not cause any uncertainty either. Development of the law was considered a perfectly good charitable purpose in Incorporated Council of Law Reporting for England and Wales v. Attorney General [1972] 1 Chancery 1973, 73, 87 E-F. "Development" and "advancement" are virtually identical in meaning, in my opinion, and no one familiar with this branch of the law can fail to be aware of the myriad gifts for the advancement of education and other intellectual activities which have been held to be charitable.

87. "Charity" in this branch of the law does not have its popular meaning, but, instead, is a term of art with a technical meaning which moves with the times: In re South Place Ethical Society, Barralet v. Attorney-General, [1980] 1 WLR 1565, 1570E. See also Pettit's Equity (5th Edition) at pages 46 and 201. As explained by Sachs L.J. in Incorporated Council of Law Reporting for England and Wales v. Attorney-General at 90C, citing Lord Ashbourne in In re Cranston [1898] 1 I. R., 431, 442, the word is "wide, elastic", and, again, per Sachs L.J., at page 94 "has an admirable breadth and flexibility which enables it to be reasonably applied from generation to generation to meet changing circumstances".

88. Mating up the Shorter Oxford Dictionary definition of "culture" with the Testator's words, I have no hesitation in finding that the development of the intellectual side of Chinese civilization falls within the educational head of charity. However, it also comes under the fourth head of purposes beneficial to the community and of general public utility, as I hope now to demonstrate.

89. Russell L.J. in Incorporated Council of Law Reporting for England and Wales v. Attorney-General at page 87 explained how the object of the Statute of Elizabeth I was the oversight and reform of abuses in the administration of properties devoted by donors to purposes which were regarded as worthy of such protection as being charitable. He went on to explain at page 88 G & H how the somewhat random examples in the preamble to the Statute of Elizabeth I are examples of matters which, if not looked after by private enterprise, must be a proper function and responsibility of government. That afforded strong ground for a statutory expression by Parliament of anxiety to prevent misappropriation of funds voluntarily dedicated to such matters.

90. In modern day Hong Kong, one finds the government stepping in to give financial or other material support to culture, because of a lack of public benefactors. For example, the government funds the Urban Council which sponsors a wide range of cultural activities, both Chinese and other, and the government has given land for the building of The Hong Kong Arts Centre, as well as the Hong Kong Academy For Performing Arts. Such matters are the proper function and. responsibility of modern government. Is it reasonable that when a private patron comes along offering money for such purposes, that the law should hold that the gift fails for uncertainty because it is outside the equity of the Statute of Elizabeth I? I do not think so.

91. I do not find it necessary for me to go as far as Russell L.J. and the other two judges in Incorporated Council of Law Reporting for England and Wales v. Attorney-General in holding that if a purpose is shown to be beneficial or of utility to the public then it is prima facie charitable in law. I am prepared to adopt the same approach as Dillon J. in In re South Place Ethical Society Barralet v. Attorney-Generai that William's Trustees v. Inland Revenue Commissioners [1947] A. C. 447 (which in turn follows Attorney-General v. National Provincial and Union Bank of England [1924] A.C. 262, 265) does not permit turning the question upside down to start by considering whether something was for the benefit of the community." As Lord Simmonds stated in the William's case, citing Lord Cave L.C. in Attorney-General v. National Provincial and Union Bank of England [1924] A.C. 262, 263, in reference to Lord Macnaghten's judgment in Income Tax Special Purposes Commissioners v. Pemsel [1891] A.C. 531 -

"Lord Macnaghten did not mean that all trusts for purposes beneficial to the community are charitable, but that there were certain beneficial trusts which fell within that category; and accordingly to argue that because a trust is for a purpose beneficial to the community, it is therefore a charitable trust is to turn round his sentence and to give it a different meaning. So here it is not enough to say that the trust in question is for public purposes beneficial to the community or for the public welfare; you must also show it to be a charitable trust."

92. Like Dillon J., I am going to adopt the approach of analogy with decided cases. Relying on Tudor on Charities, Dillon J. (at page 1574A and B) pointed out that the fourth category can include trusts for certain purposes tending to promote the mental or moral improvement of the community. He continued (1574B and C), "Again, as Wilberforce J. pointed out In re Hopkins Will Trusts [1965] Ch. 669, 680-681, "beneficial" in the fourth category is not limited to the production of material benefit but includes at least benefit in the intellectual or artistic field". He also pointed to In re Scowcroft [1898] 2 Ch. 638 as a case where ''mental improvement" was regarded as a good charitable purpose.

93. In Associated Artists v. I.R.C., [1956] 1 W.L.R. 752, the court was prepared to hold that the presentation of "cultural" dramatic plays was charitable, but ruled that "artistic" dramatic plays fell outside.

94. The law reports and textbooks are full of single instances of what has been. held to be and what has been held not to be charitable. (See for example, Tudor on Charities (7th Edition), pages 36-39 and Pettit's Equity (5th Edition), 215 and 216). Other than as a general guide, little advantage is to be gained by going over such material. As Dillon J. rightly points out in In re South Place Ethical Society at page 1569G, "It is well known that the development of the English law as to what is or is not a charity has been empirical". All that really matters are the words in the instant case: "the development of Chinese culture". Whether those words come within the mischief of the Statute of Elizabeth I is, to use the expression of Sachs, L.J. in the Incorporated Council of Law Reporting case at page 95, "eminently a matter of first impression". One counsel before me, in a different context, in the case, spoke rather disparagingly of this type of approach as "The Elephant Test", meaning that one might be able to recognise an elephant when one sees it without being able to define it. Actually, this so-called "Elephant Test", is of great antiquity and respectability in the law. All the time, courts are having to decide matters on the basis of impression. On the basis of impression, I am satisfied that "the development of Chinese culture" is within the fourth category.

95. Before leaving the Incorporated Council of Law Reporting case, I think it as well to mention that Russell L.J.'s approach (which I have not followed) to the fourth category was shared by the other two Lord Justices of Appeal sitting with him. The headnote to that decision describes him as dissenting, but that is only on the issue of whether the objects before the court in that case qualified as charitable under the educational head. Russell L.J., adopting a more conservative approach than his brethren, was not prepared to hold that the objects came within the advancement of education. Before me, the Incorporated Council of Law Reporting case was presented on the basis that Russell L.J. was propounding an eccentric, minority view in contending that if a purpose is shown to be beneficial or of utility to the public, it is prima facie charitable in law. Both the other judges agreed with him on that.

96. Public benefit is one of the essential ingredients which must be present if objects are to be declared charitable. The other essential ingredient is coming within the equity of the Statute of Elizabeth I. I have already demonstrated how, in my view, "the development of Chinese culture" is within the equity of the Statute, i.e. within its spirit and intendment. That the objects are for the benefit of the public is abundantly clear, in my view. There is nothing in the Testator's word to limit his gift to any particular section of the community, and, obviously, the public at large was intended to benefit.

97. Provided the Testator has manifested a sufficient charitable intent by the words he has used in describing the objects he wishes to be advanced, his intention will not be defeated because he has not worked out the details of a scheme to put his intention into effect. The trustees and the Attorney-General, under the supervision of the court, will work out a practical scheme. Will the supposed problems dreamt up by those opposing the validity of sub-clause 16 present any problem to the court in its supervisory role? Will the court find it floundering because it cannot make up its mind whether mahjong, lantern festivals, Chinese cooking, a new Chinese alphabet etc. come within the ambit of "the development of Chinese culture''? By trying to emphasize borderline situations, those opposed to sub-clause 16 were engaging in an exercise reminiscent of the "slippery slope" argument refuted by Lord Hailsham in Inland Revenue Commissioners v. McMullen [1981] A.C. 1, 19 -

"        I also wish to be on my guard agaisnt the 'slippery slope' argument of which I see a reflection in Stamp L.J.'s reference to 'hunting, shooting and fishing.' It seems to me that that is an argument with which Vaisey J. dealt effectively in In re Dupree's Deed Trusts [1945] Ch. 16 in which he validated the chess prize. He said, at p. 20:

 

98. Another long-exploded fallacy was relied on by those opposing the will. "What about if some of the money gets diverted to an indivdual artist?", the court was asked. That type of argument received its quietus in Pettit's Equity (5th Edition) at pp. 203 and 204:-

"As explained by Slade J. in McGovern v. A-G a distinction of critical importance has to be drawn between (a) the designated purposes of the trust, (b) the designated means of carrying out those purposes and (c) the consequences of carrying them out. Trust purposes of an otherwise charitable nature do not lose their charitable status merely because, as an incidental consequence of the trustees' activities, there may enure to private individuals benefits of a non-charitable nature."

The citation for McGovern v. A.G. is [1981] 3 All E.R. 493.

99. A "benignant approach ..... undoubtedly comes to the assistance of settlors in danger of attack for uncertainty" : IRC v. McMullen per Lord Hailsham at page 18. Moreover, "there must be a certain bias in the mind of the court in favour of doing what the testator or testatrix obviously wanted to be done": In re Bradbury, Deceased-Needham v. Reekie [1951] 1 T.L.R. 130, 131.

100. In fact, I do not think there is any ambiguity whatsoever in the words "the development of Chinese culture": the Testator's meaning, which is plain, intelligible and in no way lacking in certainty, gives rise to a charitable trust.

101. In relation to the criticisms made of sub-clause 16, I echo what Lord Loreburn L.C. said in Weir v. Crum-Brown at page 167, "Now there is no better rule than that a benignant construction will be placed upon charitable bequests. It is difficult to imagine a construction less benignant than that suggested by criticisms such as those which I have allueded".

102. I do not envisage that the court will have the slightest difficulty in controlling whatever scheme it approves so as to ensure that the Testator's funds do not get misapplied. In the same way that those administering the Hong Kong Arts Centre or the Hong Kong Academy for performing Arts would, no doubt, know what to say to anyone who came forward with a proposal that it include mahjong in its programme, I do not foresee that the trustees administering funds for the "development of Chinese culture'", or, if necessary, the court, will have any difficulty in distinguishing what is and what is not within the objects.

103. Sub-clause 17, confers a power of appointment for educational purposes parallel with that to be found in sub-clause 12. Both sub-clauses 12 and 17 operate in relation to the undisposed income from the Testator's shares in Yeung Shing. The text of sub-clause 17 is as follows :-

"Should any of the descendants of the Hui family/ clan in future attend university or post-secondary college, then money should be set aside and paid out from my annual income to assist them."

104. The crucial issue concerning sub-clause 17 is whether the words "Hui family/clan" are conceptually uncertain. Unless the objects of a power of appointment are certain, the gift will fail : Re Gulbenkian's Settlement Trusts [1970] A.C. 508; McPhail v. Doulton [1971] ,A.C. 424. One has to be able say with certainty whether any given individual is or is not a member of the class.

105. Re Gulbenkian's Settlement Trusts is also authority for the proposition that where the language of the relevant document is ambiguous, it is the duty of the court to ascertain the settlor's expressed intentions if that can be done without doing complete violence to its language.

106. Brown v. Gould [1972] Ch. 53 is also to the effect that a court will strain against holding a trust or any other provision void for uncertainty.

107. I think there is everything to commend the trustees' argument that, by "Hui family/clan", the Testator had in mind the descendants of himself and his three brothers. Looking at the family tree (Appendix III post) while at the same time considering the bequests he made, one sees that he has extended his bounty as far as his brothers' children or grandchildren. The nephews and grandnephews, it will be recalled, got 1½% each of the Testator's shares in Yeung Shing. Interpreting "Hui family/clan" so as to refer to the descendants of the Testator and his three brothers eliminates all uncertainty. The trustees and the court will have no difficulty determining whether someone is or is not within the class. "Descendants" presents no problem. It means lineal descendants. That was common ground.

108. Rhetorically, Mr. Andrew Lee asked: "Why limit the ancestor to the Testator's father? Why not choose the Testator's grandfather?" The answer to that is that the Testator, sitting in his armchair as he made his will, appears to have had only the descendants of himself and his brothers in contemplation.

109. Mr. Lai, for the nephews and grandnephew, sought to draw my attention to the subtleties of meaning which could be detected by resorting to the original Chinese characters in the text of will. I refused to heed this siren call. There is an agreed English translation of the will, and for better or worse, all parties are bound by it. To have recourse to the original Chinese characters would drive a coach and horses through Hong Kong's long established principles to the effect that the translation alone is to be looked at. (For the relevant Practice Direction, see (1905-08) H.K.L.R. 70). There is no scope for any half-way house. If Mr. Lai did not like the translation, it was up to him to challenge it in the conventional way by calling an expert to put forward an alternative translation as a matter of evidence. So long as English remains the language of the court in Hong Kong, vital policy considerations dictate that there should be no undermining of the present rules about translations. Otherwise, unnecessary uncertainties will creep into the administration of the law, and cases will be prolonged while counsel advance their preferred meaning for the Chinese text.

110. The perpetuity period for the exercise of the power conferred by sub-clause 17 is for the lives of the descendants of the "Hui family/ clan", as I have defined it, living at the death of the Testator, plus 21 years. Already I have indicated this power is parallel to that to be found in sub-clause 12. It follows that the observations I made in relation to sub-clause 12 about the position on the partial intestacy arising at the expiration of the perpetuity period applies equally to sub-clause 17.

111. The same as with the power in sub-clause 12, the trustees have a duty to consider from time to time whether or not to exercise the power conferred on them by sub-clause 17, but otherwise its exercise is within their sole discretion.

112. Sub-clause 18 and 19 can be dealt with together. There is little I can usefully say about either of them. Mr. Martin Lee Q.C., and Mr. Thomas Lai each made brave attempts to try to get some sense out of them but, in my view, to no avail. Many times though I have read both these sub-clauses, the sense of them still eludes me, and since I find them unintelligible, there is no course for me other than to declare them void. The two offending sub-clauses are as follows:-

113. Each of the-sub-clauses of Clause IV has now been considered.

114. A word at this point is appropriate on the topic of partial intestacy in relation to the provisions of Clause IV. I have already touched upon this topic while commenting on sub-clauses 12, 16 and 17. Once the perpetuity periods relevant to the powers to be found in sub-clause 12, 16 and 17 have expired, the capital giving rise to the income applicable under those sub-clauses will fall into residue and will be available for distribution to those qualifying as the Testator's statutory next-of kin under the Intestates' Estates Ordinance, Cap. 73 at the time of the Testator's death.

115. It was conceded on behalf of the trustees that the balance of income arising in any particular year which remained unappointed would go to the statutory next-of kin at the end of that year.

116. Clauses V and VI have been keenly fought over. They are parallel provisions. Clause V is only of any real importance on account of light it might shed on Clause VI. Clause VI is where the high stakes are. Firstly, I will set out Clause V:-

"The business of the Ritz Hotel operated by me should be transferred to Yeung Shing Land Investment Co. Ltd. for management."

117. The Ritz Hotel was a sole proprietorship run by the Testator. The business was losing money at about the rate of $100,000/= a year at the time of his death. Despite such losses, the Commissioner of Estate Duty placed a value of $111,866/= on that business for estate duty purposes. The Ritz Hotel sole proprietorship is now no more. After allowing that business to continue to operate at a loss for a year or two more after the Testator's death, the trustees ceased operations, paying off the old staff and closing down the business. The lease from Yeung Shing was terminated. As a matter interest, I will mention that the phoenix has risen from the ashes in the form of a new hotel business run from the sane site by the Ritz Hotel Co. Ltd. which commenced business on 1st August, 1984 with an operation which is now trading profitably.

118. I do not think that any of the parties to the present proceedings would have devoted any time to arguing about Clause V were it not for the possible significance of Clause V on the interpretation of Clause" VI. As one counsel realistically put it, the arguments about Clause V were somewhat academic as they referred to a loss-making business.

119. No one disputes that Clause VI relates to property of substantial value owned by the Testator. To what property it extended in particular, and the effect of the clause generally, were matters of controversy. I will begin by setting out Clause VI in full:-

"The business(es) and shareholdings operated by me and property rights owned by me in various places in Hong Kong, other than those specified for distribution in the foregoing, shall be transferred to Yeung Shing Land Investment Co. Ltd. for management."

120. Those arguing in favour of a partial intestacy contended that Clause VI could not be construed so as to include the debt of $21,287,925.98 owing to the Testator by Yeung Shing in respect of the balance of unpaid purchase money on the assignment of the Ritz Hotel site at 22 Austin Road.

121. The debt owed to the Testator by Yeung Shing is one of a long list of choses in action left by the Testator at his death. The list comprises all the items to be found on the Estate Duty Valuation at page 252 of the Agreed Bundle, except for the tangibles, namely, each $500.00, household goods and personal effects $2,000.00, and $70 in respect of the key for deposit box No. 31068 with Hang Seng Bank Ltd. That list from the Estate Duty Valuation is set out as Appendix IV to this judgment.

122. That Estate Duty Valuation included the Testator's 100,000 shares in Park Hotel Ltd., his 800 shares in Shamrock Hotel Ltd., and his 7,950 shares in Yeung Shing. The three lots of shares I have just described formed the subject matter of Clauses I, II and IV, respectively, of the will. I am satisfied those three lots of shares are what the Testator meant when, in Clause VI, he referred to property rights "........ other than those specified for distribution in the foregoing........"

123. Apart from the shares in Park Hotel Ltd., Shamrock Hotel Ltd. and Yeung Shing, to which I have just referred and apart from the tangibles to which I have also referred, I am satisfied that Clause VI embraces all of the remaining items in the Estate Duty Valuation list at Appendix IV post, including the debt of $21,287,925.98 from Yeung Shing. That debt owed to the Testator by Yeung Shing fits squarely within the words "property rights owned by me in various places in Hong Kong". I see no difficulty in the concept of that debt being "transferred to Yeung Shing Land Investment Co. Ltd. for management". As will shortly be seen, the view I take is that the Testator used the word "management" is an unconventional sense.

124. Those in favour of a partial intestacy argued, in effect, that the Testator could not have intended the $21,287,925.98 debt from Yeung Shing to come within Clause VI, because it seemed unnatural to talk in terms of transferring such a debt for management (in a conventional sense),by the debtor itself. That argument was stood on its head, in effect, by those arguing against a partial intestacy. They were able to argue that, in such circumstances, the Testator must have meant something out of the usual by "management".

125. The first limb in the argument of those advocating partial intestacy was that the $21,287,925.98 debt fell outside the ambit of Clause VI.. I have ruled against them on that. The next limb is that if the $21,287,925.98 debt, together with all the other items on the Estate Duty Commissioner's Valuation list (except the shares in Park Hotel Ltd., Shamrock Hotel Ltd. and Yeung Shing) are transferred to Yeung Shing by the will, it is for management only, the word "management" being used in its conventional sense and not as a word of bequest (On the topic of words of bequest, see In re Edwards [1906] 1 Ch 571,574 and In re Benn [1885] 29 Ch D 839,847). Thus, no additional assets would be injected into Yeung Shing; it would merely "manage" them (again using "manage" conventionally). There is also the point that the Testator was aware of conventional words of bequest, as evidenced, for example, by his use of "inherit" in Clauses I, II and III.

126. That the Testator knew how to use the word "manage" in its conventional sense is made abundantly clear by Clause VIII, which I now set out:-

"Yeung Shing Land Investment Co. Ltd. which is left by me shall be jointly managed by the said three guardians in conjunction with (a) lawyer(s)."

127. Obvicusly there, the three guardians and the lawyer the Testator had in mind were to be mere managers, and there is not the slightest suggestion of any meaning of ownership in the context of Clause VIII. Can the same be said for Clauses V and VI?

128. The trustees argued that, by his will, the Testator intended to dispose of all his property. They point to the opening sentence "..... the estate I shall leave in future shall be distributed as follows .....". An introductory statement like that, setting out the Testator's intention of disposing of his estate, amounts to some indication in favour of a universal disposition of all the Testator's property, but such words by themselves do not necessarily bring about a realisation of that intention. Unless there are words to be found in the will which, reasonably interpreted, include particular species of property, such as the Yeung Shing debt and the other items to which I have made reference from the Estate Duty Commissioner's Valuation, the prefatory words can only be considered as indicating an intention which the Testator has not fulfilled: Enohin v. Wylie [1862] 10 H.L. Cas. 1, 21.

129. The law recognises that a testator may well intend to die partially intestate, and there is no reason for the court in all cases to lean too heavily against a construction which involves a partial intestacy: Halsbury's Laws of England, 4th Edition, Volume 50 paras. 440-442. Where, however, the construction of a will is doubtful, the court can resort to a presumption that the Testator did not intend to die partly intestate, but this does not mean that the court can give an unnatural meaning to a word or construe plain words otherwise than according to their plain meaning, unless there are good reasons for so doing. See Williams, op. cit. page 439. That is the "plain meaning rule", to which Theobald (op. cit.) makes reference at 203. However, as the same work also explains, the testator can make "black" mean "white" if he makes his dictionary sufficiently clear in his will.

130. The court must always limit itself to the "expressed intentions" of the Testator. All the cases make that clear including In re Parker, Kilroy v. Parker [1966] I.R. 309, which, while (at page 321) allowing"the most unbounded indulgence" to the testator, also left in no doubt that the court must find "from the contents of the instrument the intention of its author". What is totally impermissible for the court is to conjecture that the testator probably had a particular intent and then go stretching the words of the will in an attempt to give effect to that supposed intent. That type of a priori reasoning is wrong. See Williams (op. cit.), page 429. The correct approach is to be found in the speech of Lord Halsbury L.C. in Leader v. Duffey [1888] 13 App. Cas. 294 where he states -

"......... whatever the instrument, it must receive a construction according to the plain meaning of the words and sentences therein contained.

 

But I agree that you must look at the whole instrument, and, inasmuch as there may be inaccuracy and inconsistency, you must, if you can, ascertain what is the meaning of the instrument taken as a whole in order to give effect, if it be possible to do so, to the intention of the framer of it. But it appears to me to be arguing in a vicious circle to begin by assuming an intention apart from the language of the instrument itself, and having made that fallacious assumption to bend the language in favour of the assumption so made."

131. Authority for the same line of approach is also to be found in Eden v. Wilson [1852]4 H.L. Cas. 257, 284, 287; Inderwich.v. Tatchell, [1903] A.C. 120, 122, 123; Theobald (op. cit.) at page 185, and Halsbury's Laws of English, (4th Edition) Vol. 50, para. 421.

132. According to the trustees, the Testator in the present will gave the words "management" in Clauses V and VI, the meaning "ownership", the consequence being that the properties covered by Clauses V and VI fall within the ambit of "etc." in Clause IV. According to the trustees, Clauses V and VI bring about an injection of additional assets into Yeung Shing. Those opposing that contention argue that "etc." in Clause IV had a more modest role to play. That more modest role was limited to the handful of assets which Yeung Shing owned at the Testator's death, apart from Hang Seng Building and 122 Austin Road. A perusal of Yeung Shing's balance sheet for 1980 (see Agreed Bundle, page 86) shows those additional assets to have been 20,000 shares in Park Hotel Ltd. with a market value of $116,000 as at the 31st December, 1981, accounts receivable of $39,636.35 and cash at bank of $172.98.

133. Those favouring partial intestacy also claimed to find support in the word "namely" in the first line of Clause IV, but I am afraid that I can see no real significance in that word.

134. Words which obviously are of great significance for present purposes in Clause IV are "operated and managed". Those words, in that context, relate to property which, in fact, Yeung Shing owned, so the question arisen whether the words "operated and managed" were synonymous in the Testator's mind with "owned". Those arguing in favour of a partial intestacy pointed out that "operated and managed" accurately described the factual situation, because Yeung Shing was operating and managing the properties. There is some force in that argument, but, all the same, I cannot help regarding it as odd that the Testator there used the words "operated and managed" when it would have been far more natural to use the word "owned".

135. In Clause IX, the words "operated and managed" are used again. I will set out Clause IX:-

"All the properties operated and managed by Yeung Shing Land Investment Co. Ltd. may be sold or assigned/transferred only in exceptional circumstances, (and) when necessary, the consent of all the shareholders jointly with the guardians and (a) lawyer(s) (shall be obtained), but the proceeds therefrom must be transferred to (a) suitable place(s) in the name of that company to purchase real property for the purpose of making profits and for the sake of perpetuity."

136. It is clear that for the purposes of Clause IX, at least, "properties operated and managed by Yeung Shing" must mean properties owned by Yeung Shing, because, otherwise, the clause could not contemplate that Yeung Shing would sell or assign the properties with a view to reinvesting for the sake of perpetuity. It is significant, too, that Clause IX refers to "All the properties operated and managed by Yeung Shing ...... (my underlining).

137. Even if  "operated and managed" can together mean "owned", is one entitled to go on from there and hold that "operated" or "managed" when used singly can mean "owned"? I am satisfied that in view of the way in which the Testator has used language in this will, the answer is, "Yes". The Testator certainly has used "operated" elsewhere in the will in the sense of "owned". In Clause V, he spoke of "the Ritz Hotel operated by me" when referring to the hotel he owned. Then in Clause VI, he referred to "shareholdings operated by me" when, clearly, he meant shareholdings "he owned".

138. "..... shareholdings operated by me ....." is also, incidentally, an illustration of the somewhat imprecise use of language made by the Testator. I have never heard anyone say "shareholdings operated by me". Such use of language can only be described as "quaint", but, in context, I have no doubt what he means. I do not think that the Testator should be treated as someone who used language with great precision. I do not thin that in Clause IX he was using the words "operated" and "managed" cumulatively. I think he was using each of them as an alternative for "owned". The meaning of Clause IX is exactly the same when either "operated" or "managed" is omitted. The Clause still has the effect of showing that Yeung Shing was the owner of the properties. In lawyers' language, "and" should, in my opinion, be read disjunctively in "operated and managed" in Clause IX. That has a consequence for Clauses V and VI, of course.

139. In trying to make sense of this will and in trying to determine the Testator's expressed intent, the court would be accused of lacking common sense if it failed to pay heed to the practical consequences of interpreting "management" in Clauses V and VI literally. What purpose would the Testator have served if he transferred the Ritz Hotel and the long list of choses-in-action and the few tangibles in the Commissioner of Estate Duty's Valuation (Appendix IV post) to the trustees for management? An explanation was offered for Clause V: the Ritz Hotel was ailing so needed bringing under the wing of Yeung Shing. A somewhat facile explanation, I feel. No explanation was tendered in respect of Clause VI. Why transfer all those properties to Yeung Shing for "management" (using the word in its conventional sense)? It seems an inchoate and idle act on the part of the Testator. Those entitled on intestacy would be able to call for those assets at any time if Yeung Shing was limited to managing them (again using "managing" in a conventional sense). Why bother to transfer them at ' all to such little effect? Would it not have been more sensible for the Testator simply to keep quiet and let the statutory next-of kin simply take a direct transfer of the property to themselves rather than have to claim it from Yeung Shing? Such questions pointing up absurdities cannot serve to clothe "management" with any special meaning, but they do have the effect of putting one on notice that, perhaps, the Testator was not using the word "management" in its usual sense, in Clauses V and VI.

140. Much weight was placed by the supporters of partial intestacy on the present tense "are" used in Clause IV, the context being the properties "which are operated and managed by Yeung Shing ........" The argument was to the effect that, at the time the Testator wrote his will, the $21,287,925.98 debt from Yeung Shing, the choses-in-action and the intangibles in contention were not owned by Yeung Shing, and by using the present tense, the Testator forestalled the possibility of now arguing that, after his death, they should be included. Attempts were made to water down that line of argument by submitting that, in Chinese, there are no tenses so that the court would be justified in not putting the same significance on "are" here as it would in an English will.

141. As already indicated, I refuse to have any truck with arguments which involve questioning the translation. I therefore give "are" full respect as a present tense, in the same way I would with a will originally written in English. That said, I am afraid that "are" is not, in my opinion, of any assistance to those arguing for partial intestacy. The fact is neutral. I think it is equally valid to argue that "are" refers to the time when the will comes into operation (i.e immediately after the Testator's death) as it is to argue that "are" was meant to refer to the time when the Testator was writing his will. In context, it appears to me that the intent the Testator was expressing is as follows :-

".... the properties ..... which are operated and managed by Yeung Shing Land Investment Co. Ltd. (as a result of this will) ....."

142. The words in parenthesis are mine of course, and I put them there to show what the Testator meant by this will, in my opinion.

143. Both sides played at the game of pointing out how meticulous the Testator was with his bequests, making gifts of quantities like 1.2% to one beneficiary and ½% to another. Those opposing partial intestacy asked whether such a meticulous man would have failed to dispose of assets worth $23,832,649, according to the Commissioner of Estate Duty's Valuation (Appendix IV post), whilst those favouring partial intestacy questioned whether the Testator could have contemplated injecting those assets into Yeung Shing, bearing in mind that he was not the sole shareholder, with the result that other shareholders would indirectly benefit from the company's enlarged assets.

144. The arguments of the pros and the cons cancel each other out, in my opinion. On the one hand, even a meticulous man might well intend to die partially intestate, whilst, on the other hand, I do not think there is any real scope for suggesting that the Testator might have been acting out of the character of his usual meticulous self in bringing about a state of affairs where other shareholders in Yeung Shing would benefit from his munificence. He owned 99.375% of the shares, the balance belonging equally to D2, D5, D6, D7 and D8. Each of them owned precisely 10 shares out of Yeung Shing's issued capital of 8,000 shares. Perhaps even one as meticulous as the Testator might feel that he was not departing from his invariable high standards of scrupulosity by performing an act which resulted in those family members getting a little extra value on their shares.

145. A point which, in my view, goes on to the balance in favour of those supporting partial intestacy is that Clause IX was clearly designed for the situation of selling Yeung Shing's assets in exceptional circumstances and using the proceeds to purchase real estate. Is it reasonable to suppose, therefore, that the Testator ever contemplated that Yeung Shing would have a whole list of assets injected into it by Clauses V and VI which were not real estate? The argument is, in effect, that Clause IX presupposes that Yeung Shing has nothing (or hardly anything) but real estate, which then gets sold off and the proceeds converted into other real estate elsewhere. The argument was also to the effect that none of Yeung Shing's assets was supposed to be sold other than in exceptional circumstances. That might take sense for major items of real estate like Hang Seng Building or 122 Austin Road, but why, those supporting partial intestacy argued, would the Testator have wanted Yeung Shing to hang on to some of the minor items to be found on the Estate Duty Commissioner's list, such as four shares in Kiu Yip Land Investment & Farming Co. Ltd. worth $2,000 or the 50/365th interest in the business of Yat Ting Ho Restaurant worth $5,000.00? That is an argument which along with all the others, both for and against, gets thrown onto the scales.

146. After weighing all the elements bearing on this difficult point of interpretation, I am satisfied that this is one of those situations where in effect, the Testator compiled his own dictionary in which "management" meant "ownership" in Clauses V and VI.

147. It was suggested by those supporting partial intestacy that the Testator could never have intended to transfer the $21,287,925.98 debt to Yeung Shing because, in part, at least, he gave that money away by various bequests of $500,000.00 each in his codicil. I reject that argument. In the codicil, he used the formula "From Yeung Shing a sum of $500,000 is to be set aside and paid to x." There would be a reasonably arguable case for declaring those bequests invalid on the ground that the Testator had overlooked that he did not own Yeung Shing and was in: no position to give away anything of its. The position could be said to be analagous to the situation of In re Lewis [1984] 3 All E.R. 930. I do not want to have to make the finding that those bequests fail, because they have been supported by the trustees and, if I understand the position correctly, have not really been opposed by anyone, although as a matter of preference, Mr. Swain's clients, D2 and D8, would have liked to see those bequests come from the items in the Estate Duty Commissioner's Valuation list, other than the $21,287,925.98 debt from Yeung Shing.

148. If I have to choose between an interpretation which results in Clauses V and VI injecting the assets into Yeung Shing, or upholding the bequests under the codicil, I have no doubt where my duty lies: the expressed intention of the Testator is that the assets, including the $21,287,925.98 debt, get injected into Yeung Shing. However, I have no wish to be officious, and go against what I understand to be the wishes of all the parties before me, so that I have not caused the bequests under the codicil to fail.

149. I will now move on to Clause VII, which is as follows:-

"Estate Duty payable on any item of my estate shall be borne by the person inheriting such item."

150. It was agreed all round this means that estate duty payable on the passing of the estate should be borne proportionately by all persons inheriting any part of the estate.

151. By paragraph 29 of the Originating Summons, I was asked to give directions as to the true construction of Clause VIII of the will and its effect, if any, on the true construction or operation of the remainder of the will and the codicil. Clause VIII is as follows:-

"Yeung Shing Land Investment Co. Ltd. which is left by me shall be jointly managed by the said three guardians in conjunction with (a) lawyer(s)."

152. This Clause VIII ties in with Clause IV, sub-clause 13 which made the three so-called "guardians" the trustees of the Testator's estate.

153. In a joint opinion given by counsel for the trustees, the view was expressed that, in so far as this provision was inconsistent with the articles of Yeung Shing governing the management of that company, it was doubtful whether effect could be given to Clause VIII. Whilst I would not quarrel with the view of counsel for the trustees, as far as it goes, I do, nonetheless, agree with a submission made by Mr. Andrew Li that the trustees are duty-bound to ensure that Yeung Shing is properly managed. I do not consider that Clause VIII imposes any greater obligation on the trustees than that imposed by the law generally where trustees own shares in a private company, namely, that the trustees must take appropriate steps to safeguard the trust's interests. See Bartlett v. Barclay's Bank (No. 1) [1980] 1 Ch. 515.

154. In the course of his submission, Mr. Andrew Li touched upon the question of whether P2, who beside being a trustee now serves as the managing director of Yeung Shing, is required to consult with the other two trustees concerning the management of Yeung Shing. That submission of Mr. Andrew Li sparked a request from counsel for the trustees for the following specific directions from the court:-

155. Mr. Andrew Li was not far off the mark, in my view, when he described those four questions as being asked, as it were, "in terrorem", because he had had the temerity to suggest that P2 was required to consult with the other two trustees concerning the management of the company.

156. I do not regard any of those four questions as appropriate for resolution on this originating summons. The trustees did not see fit to include those questions in the originating summons and, in my view, nothing has transpired which makes it desirable that they should be answered now. The trustees are at liberty to raise those questions as and when problems arise making them necessary, but, at present, I regard them as hypothetical. At the best of times, courts are unenthusiastic about answering hypothetical questions, and never more so than in a case like the present where they are already more than enough genuine questions to answer. The direction I would give under paragraph 29 of the originating summons is as follows:-

"Clause VIII of the will does not affect the operation of the articles of Yeung Shing. In so far as compatible with his duties under the articles of Yeung Shing as permanent director, P2 should consult with the other two trustees concerning the management of Yeung Shing and each of the trustees is obliged to ensure that Yeung Shing is properly and fairly managed so long as the estate holds any shares in the company.''

157. No voice was raised in support of the validity of Clause IX which I do not need to set out again. Although Clause IX has performed a valuable function in the present case by helping to throw light on other clauses, there can be no doubt that Clause IX itself is void, because it seeks to impose unlawful restraints on the alienation of Yeung Shing's property, and is also inconsistent with Yeung Shing's articles. See Theobald (op. cit.) page 629. Nothing further needs be said about Clause IX.

158. Clause X was one of the big battle-grounds in the case. Grammatically, Clause X does not present any problem. I will set the Clause out:-

"As regards Clause V above, any rights given to and enjoyed by females shall terminate upon their death."

159. The problem arises because Clause X cannot conceivably have any application to Clause V, which, it will be recalled, is as follows:-

"The business of the Ritz Hotel operated by me should be transferred to Yeung Shing Land Investment Co. Ltd. for management."

160. Obviously, either the Testator made a mistake by leaving Clause X in the will at all, or else he meant to refer in it to some clause other than Clause V.

161. I am prepared to assume that the Testator deliberately left Clause X in his will. Having made that assumption, I must strive to give effect to Clause X. There is a presumption that words, and a fortiori, whole clauses are included in a will for a purpose (See Williams on Wills, p. 434). In one sense, the purpose of Clause X is clear. It is obviously meant to limit certain rights given to females to life interests. As Mr. Daniel Fung rightly pointed out, the problem with Clause X is not ambiguity, but absurdity, on account of its inapplicability to Clause V. 

162. If in Clause X the reference to Clause V is a mistake, the only other possibilities which would make sense are either Clause III and/or Clause IV. The possibility of the Testator having intended to refer to both Clauses III and IV in Clause X is, I think, remote, so I will discard that possiblity from the outset. That narrows the field down to Clause III or IV. Is it possible, though, that the Testator might have intended to refer only to one of the sub-clauses in Clause IV, for example, sub-clause 5 which referred to his daughters-in-law or sub-clause 8 which referred to his granddaughters-in-law? I do not regard it as a practical possibility that he intended to refer merely to one of the sub-clauses in Clause IV.

163. Mr. Thomas Lai demonstrated from the combination of Chinese characters and Arabic numerals used by the Testator in the original text of the will that the reference to Clause V in Clause X was meant to be a reference to a whole clause, and not simply a sub-clause. When the Testator intended to refer to whole clauses, he used Chinese characters for numerals, whereas when he referred to sub-clauses, he used Arabic numerals. That was the only occasion when I permitted examination of the original text of the will, rather than confining all submissions to the English translation. I permitted this deviation, because Mr. Lai was able to make this point without having to go into the meaning of individual Chinese characters. Without any knowledge of Chinese, one could grasp the significance of the point he was making, and there was no risk of undermining the authority of the English translation.

164. I was therefore satisfied that if the Testator intended to refer to any clause by Clause X, it was to either Clause III or to Clause IV.

165. I am not going to set out the whole of Clause III and Clause IV again. If Clause X were held to relate to Clause III, the effect would be that the Testator's concubine (D2), and his only daughter (D6) would be limited to a life interest in the properties in Taiwan and the United States of America which they inherited from him. On the other hand, if the court were to read "Clause IV" for "Clause V", the following females, instead of enjoying absolute interests in the shares of Yeung Shine bequeathed to them, would be confined to life interests:-

166. Although the courts lack the power to rectify a will (In re Morris (deceased), Lloyds Bank Ltd. v. Peake [1970] 1 All E.R. 1057), there is no doubt that where there is, to use the words of Sir Raymond Evershed, M.R., in re Follett (deceased) Barclays Bank Ltd. v. Dovell [1955] 2 A.E. 22, 24, "a compelling conviction", the court could read "Clause III" or "Clause IV" for "Clause V" in Clause X.

167. I am performing the role of a court of construction (In re Morris). Clearly, "Clause V" in Clause X is a mistake, so I can treat "Clause V" as if it were a blank. In that way, there is no rectification. Then, as a court of construction, if I am compellingly convinced that the blank should be read as "Clause III" or "Clause IV", it is my duty to do so.

168. Examples of how the courts have, in effect, corrected mistakes where the circumstances compelled the courts to do so are to be found in the reports. For example, in Hart v. Tulk (1852) 2 De G, M & G 300, the court was prepared to treat a reference to "the fourth schedule" as if it had been "the fifth schedule", Knight Bruce, L.J. observing,

169. No one in the case before me has suggested that the Testator might be accused of injustice, or having been unparental if the court declined to apply Clause X to either Clause III or Clause IV because of the uncertainty as to which of them was intended.

170. A further example of a case where the court felt compelled to correct an error was in re Redfern, Redfern v. Bryning [1877] 6 Ch. 133, where (at page 138) the Vice-Chancellor corrected an omission on the basis that, "the testator must necessarily have meant what the mere letter of the will does not express". No one could complain of the justice of  the result in that case where the interpretation adopted by the Vice-Chancellor ensured that one of five sisters was treated exactly the same as the other four.

171. In Clause III, the Testator used clear words of bequest: "The properties ..... shall all be given to the three persons ..... to inherit." Likewise, there are clear words of bequest in sub-clauses 1 to 10 of Clause IV: "..... shall have -% of the entire income". It is a settled rule of construction that a clear gift is not reduced by anything subsequent in the will which does not with reasonable cortainty indicate the testator's intention to reduce it. Volume 50 of Halsbury, para 546 is authority for that proposition. A similar passage is to be found in Williams (op. cit.) at page 445:-

"Subject to the intention shown by the whole will, words clear and unambiguous in themselves cannot be qualified by other words unless the latter show a very clear exposition of the meaning of the Testator."

172. The same point is made in Kiver v. Olfield (1859) 4 De G & J 30, the headnote of which reads:

"An absolute gift in clear language in a will is not taken away unless by language equally clear."

And Thornhill v. Hall (1834) 2 Cl. & Fin. 22 is to the same effect.

173. The passages from textbooks and the authorities I have just cited leave no room for doubt that unless the court can say clearly to which of Clauses III or IV Clause X was meant to refer, the court should give no effect to Clause X. Time and time again the cases emphasise that unless the court can be sure where a mistake lies, the only safe course for the court to adopt is to follow the plain words of the will. An early reference to this principle is to be found in Spencer v. Godwin, 4 M & S. 833. The words of Bayley J. in that case (at page 835) apply with equal force to the situation now before the court:-

"How here it is plain there is a mistake somewhere, but where it lies I am at a loss to discover .....

 

Therefore on the ground that I cannot see with sufficient certainty what was the intention of the parties, I think the only safe rule is to adhere to the words."

174. A modern formulation of the rule is to be found in In re Follett:-

"The rule as so expressed has two limbs. The first is that the court must be satisfied that there has been an inaccurate expression by the testator of his intention, and the second is that it must be clear what words the testator had in mind at the time when he made the apparent error which appears in the will. It is the second part of the rule that, I think, presents the greatest obstacle to the second defendant. Unless one can be reasonably certain from the context of the will itself what are the words which have been omitted, then one cannot apply the principle at all and one has to take the language as one finds it." per Romer L.J. at page 27.

175. As I indicated earlier, re Follett is also authority for the proposition that the court needs to be compellingly convinced as to which words (or in the present case which numeral) would truly correct the error. If there are equally plausible alternatives, the court will refuse to choose and leaves the error uncorrected: Re Bacharach's Will Trusts, Minden v. Bacharach and others [1958] 3 A.E. 618. As Williams (op. cit.) at page 446 puts it: "Nor will any alteration be made purely upon a conjectural hypothesis of the intention of the testator, however reasonable, in opposition to the plain and obvious sense of the instrument. No change can be made unless the court, even  though satisfied that there has been an omission can also see clearly what has been omitted or wrongly inserted and what words will truly correct the error."

176. There is no inherent reason why life interests should not be carved out of the bequests made to the two females mentioned in Clause III in the same way that Clause IV can, no doubt, be limited to life interests for females. Some of the properties which the testator owned in Taiwan and the United States were held under joint tenancies at the time he made his will so, as a matter of law, there was no prospect of any life interests arising in relation to them by virtue of Clause III. Perhaps, however, the Testator was not all that knowledgeable about the law. Parts of the will indicate that his knowledge of the law was less than perfect. It is possible that he intended to give life interests to D2 and D6 in all his properties in Taiwan and United States, including those of which he was a joint tenant. In any event, some of his properties in Taiwan and United States were not held on joint tenancies, so, on any view, life interests could be appropriate to them.

177. True, the bequests of what the Testator described as "income" from his shares in Clause IV more readily give rise to the suggestion of life interests than the bequests under Clause III. There is also the point that it looks as if the Testator intended that his shares in Yeung Shing should be held in perpetuity, whereas there is no reason to suppose that he had any particular inclination to keep his assets in Taiwan and United States intact. On the other hand, echoes of the wording in Clause III can be detected in Clause X: both of them contain the words "given to", whereas there is no hint of such wording in Clause IV.

178. An immense obstacle to those seeking to argue that Clause X was meant to limit all females to life interests under Clause IV is that one of the sub-clauses of Clause IV already explicitly makes provision for a life interest. I have in mind sub-clause 7, whereby the Testator gave his 100 year old sister-in-law, D13, a life interest in ½% of his income from the Yeung Shing shares. In the face of that particular provision, is the court entitled to say that it is compellingly convinced that the general provision in Clause X was meant to confine all female interests under Clause IV to life interests? I do not think so. If the Testator had really intended to confine all females to life interests under Clause IV, he could have included words to that effect in each of the sub-clauses of Clause IV as he went along, or else he could have added an overriding provision to Clause IV, limiting females to life interests. Perhaps, as the trustees suggest, Clause X was an afterthought, designed to limit all female interests under Clause IV, but I could hardly say that I am compellingly convinced about that.

179. Those advocating that Clause X should be extended to the female interests covered by Clause IV seek comfort from the provisions of Clause XI, which I will now set out:-

"As regards the descendants of female relatives, if they should encounter difficulties in future, they may be assisted with money from the surplus income in 'Yeung Shing Land Investment Co. Ltd.'"

180. It is contended that having cut down the interests of females in Clause IV, the Testator stretched out a safety net to their descendants by means of Clause XI.

181. There is some weight in that argument, but the point loses much of its force when one stops to consider that "female relatives'' under Clause XI is not a concept co-extensive with the class of female beneficiaries under Clause IV. To say that "female relatives" under Clause XI means the female beneficiaries under Clause IV would be to engage in the type of a priori speculation which is not permitted on the construction of a will. If "female relatives" under Clause XI means the Testator's blood relatives, then on that basis, several of the beneficiaries under Clause IV fall outside the ambit of those words; e.g. the daughters-in-law or granddaughters-in-law. If "female relatives" extends to female relatives by marriage, then again, the class is not co-extensive with the females who were made the object of bounty by Clause IV because one of the Testator's daughters-in-law, the wife of D5, got nothing. Because the category of "female relatives'' under Clause XI cannot be made to dovetail with the female legatees under Clause IV, Clause XI offers but rather limited assistance to those hoping to show that Clause X must have been intended to control Clause IV.

182. To sum up in relation to Clause X, yes, there was the equivalent of "a blundering attorney's clerk (In re Redfern at page 138) who inserted V by mistake, so that the first limb of Romer L.J'.s test in In re Follett (at page 27) can be satisfied, but the second limb remains unsatisfied, because it is not clear what numeral the Testator had in mind. I decline to cut down the clear gifts to the female beneficiaries under either Clause III or Clause IV, because neither of those clauses has been eliminated as an alternative for the purposes of Clause X.

183. The presumption about Clause X being there for a purpose has come into collision with the "safe rule" favouring the construction of wills according to the actual words (or figures) used, and the safe rule has prevailed. The effect is that I declare Clause X to be void.

184. I will now move on to consider Clause XI. There is no need for me set out Clause XI afresh because the whole text of it was referred to a moment ago for the purpose of considering whether it shed any light on Clause X.

185. Clause XI suffers from a fatal defect. By it, the Testator purported to make provision "from the surplus income in Yeung Shing Land Investment Co. Ltd.". The Testator was, in effect, seeking to give away something which was not his. Whilst the Testator certainly owned the vast majority of the shares in Yeung Shing, he, nonetheless, did not own the company and was in no position to give away the company's income. The important distinction between giving away the income from one's shares which one owns, and giving away the income of a company which one does not own is brought out in In re Lewis's Will Trusts, Lewis v. Williams [1984] 3 All E.R. 930. Elsewhere in the will, namely, in Clause IV, the Testator has shown full well that he is aware of that distinction. I feel I have no choice other than to declare Clause XI invalid.

186. Apart from the problem of the Testator not owning Yeung Shing, I would have been prepared to treat Clause XI as a valid power. Both the objects and the subject matter are sufficiently certain in my view. "Female relatives" means, in the context of Clause XI, females related to the Testator by blood. I agree with Mr. Wesley Wong that this is a power of the type which authorises selection, or as it is sometimes called "an exclusive power": See Salisbury v. Denton (1857) 3K & J 529 and Williams (op. cit.) at page 603. The trustees would have no difficulty in determining whether a particular individual fell within the class, so that the conceptual certainty required by Mcphail v. Doulton [1971] A.C. 424 would be satisfied. The position is the same as in re Griffiths, Griffiths v. Griffiths [1926] V.L.R. 212. "Descendants" presents no difficulties: it means lineal descendants. The words if they should encounter difficulties in future'' would not, in my view, have caused this power to fail for uncertainty. It would be quite within the competence of trustees to determine which descendants of female relatives were encountering financial difficulties,. and were worthy of having the power exercised in their favour. Obviously, the "difficulties" mean financial difficulties.

187. If the "surplus income" had been from the Testator's shares, reather than from Yeung Shing, there would have been no greater problem in identifying the subject matter of this power than there was in the case of sub-clause 16 of Clause IV. No useful purpose would be served by repeating what I said there.

188. Clause XI would have ranked after sub-clauses 12 and 17, but before sub-clause 16 of Clause IV. For perpetuity purposes, the lives in being would have been the female relatives alive at the Testator's death, or else the "wait and see" rule would have applied.

189. It was common ground that Clause XII, which I now set out, is contrary to public policy, and, therefore, void as an improper attempt to oust the jurisdiction of the court (c.f. Scott v. Avery [1856] 5 H.L.C. 811).

190. Of this Clause, it can be said that it is somewhat vestigial, as section 37 of the Trustee Ordinance, Cap. 29, appears to cover much the same ground. Because of the slightly obscure wording of Clause XIII, I think the best course is to direct the trustees to disregard it, and to treat themselves as bound solely by the provisions of the Trustee Ordinance, Cap. 29 on any questions relating to the appointment of the trustees. So that the trustees will know exactly where they stand, I am declaring Clause XIII void.

191. Clause XIV has no practical effect. I set it out merely for the sake of completeness:-

"As regards the lawyer(s) appointed by me, if the need should arise, the said three guardians can jointly appoint (a) substitute(s)."

192. As Clause XV states, it revokes, all previous testamentary dispositions. I set out Clause XV without further comment:-

"All testamentary disposition documents previously executed by me shall be cancelled and revoked from this date. This document shall be effective as from this date."

193. That deals with all of the clauses in the will. Now I will perform a similar exercise on the clauses of the codicil.

194. All of the clauses of the codicil (except Clause 5 which is purely formal in nature) share the feature that they purport to dispose of sums of money to be set aside from Yeung Shing. The question immediately springs to mind whether such dispositions fall foul of the principle which had to be applied to Clause XI of the will that the Testator is not in position to give away Yeung Shing's assets because they do not belong to him: See In re Lewis's Will Trusts. However, a. distinction can be drawn between the position under Clause XI of the will and the clauses of the codicil. Under Clause XI of the will, the Testator sought to dispose of "the surplus income" in Yeung Shing. Clearly, he could not do that, for reasons I have previously explained. Why the situation is, arguably, different under the codicil is that at the time of the Testator's death Yeung Shing owed him $21,287,925.98 from the sale of the Ritz Hotel site at 22 Austin Road. When the Testator gives away sums of money from Yeung Shing in his codicil, I am satisfied that what he intended was to make the gift from the money owed him by Yeung Shing. By thu s giving away part of what Yeung Shing owed him, he was making a bequest of part of his own assets rather than the assets of Yeung Shing.

195. An alternative argument was advanced by Mr. John Swaine, Q.C. He contended that the sums bequeathed by the codicil should come from the assets to be "managed'' by Yeung Shing pursuant to Clauses V and VI of the will. Inevitably, that argument of Mr. Swaine must fail in the light of the ruling I have already made on Clauses V and VI of the will to the effect that "managed" in the context under consideration meant "owned". That ruling leaves no scope for any suggestion that the Testator's assets covered by Clause VI (other than the debt of $21,287,925.98 owed him by Yeung Shing) were intended to meet the bequests made by the codicil.

196. The individual clauses of the codicil can now be looked at. Rather than take them in strict numerical order, I will deal with convenient groupings. Clauses 1, 6 and 7 adopt a generally similar formula, and each poses exactly the same problem. I now set out Clauses 1, 6 and 7.

197. Flowing from what I have already said, those bequests are to be paid to the named legatees from the indebtedness of Yeung Shing to the Testator. For the removal of all doubts, perhaps I had better just' add that under Clause 1, D9 and D15 share $500,000/=. Everyone was agreed on that.

198. Clause 2 of the codicil introduces a slight variation from the pattern found in Clauses 1, 6 and 7. The first sentence of Clause 2 follows the same formula as the clauses I have just mentioned, but the second sentence is new. I now set out Clause 2:

"From Yeung Shing Land Investment Co. Ltd., a sum of Hong Kong Dollars five hundred thousand (HK$500,000.00) is to be set aside and paid to Hui Yiu-Kwan; a sum of Hong Kong Dollars five hundred thousand (HK$500,000.00) is to be set aside and paid to Hui Kin Wah; a sum of Hong Kong Dollars five hundred thousand (HK$500,000.00) is to be set aside and paid to Hui Kin-Lai. This sum/ These sums must be for the express purpose of carrying on business, to be supervised by (the) supervisor(s). (The note signed by me on 2nd July 1978 is void and of no effect)." (Hui Yin-Kwan is P2; Hui Kin-Wah is D5; and Hui Kin-Lai is D6)

199. The new words are, of course, "This sum/These must be for the express purpose of carrying on business, to be supervised by (the) supervisor(s). (The note signed by me on 2nd July 1978 is void and of no effect)."

200. The words "The note signed by me on 2nd July 1978 is void and of no effect" can be disregarded. The trustees have been unable to locate any such note, and, in any event, it was the Testator's wish it should be void and of no effect.

201. Albeit for different reasons, the sentence "This sum/These sums must be for the express purpose of carrying on business, to be supervised by (the) supervisor(s)", can also be disregarded. No one knows who the Testator meant by "the supervisors", and it was common ground that the purported restraint imposed by this sentence is void and of no effect. Thus, each of D2, D5 and D6 is entitled to "$500,000/= absolutely as the result of Clause 2 of the codicil, such sums coming from the indebtedness of Yeung Shing to the Testator.

202. Apart from the question of the source of the funds, which I have already ruled on, Clause 3 of the codicil gave rise to no controversy. I set out Clause 3:-

"From Yeung Shing Land Investment Co. Ltd., depending on the actual circumstances, a sum is to be set aside and paid to HO Pui-fun monthly as maintenance, (such payment) is to be made until HO Pui-fun dies. (Not to exceed Hong Kong Dollars twenty thousand (HK$20,000.00) per month)." (Ho Pui-Fun is D1)

203. It was undisputed that the trustees are under a duty to pay a sum of up to $20,000/= monthly to the D1 during her life time. Such monthly payments are to be made when and in such sums as are necessary to maintain the 1st defendant at the standard of living to which she is accustomed. In determining such sums, no regard shall be had to the other resources of the 1st defendant. Such sums are payable out of the indebtedness of Yeung Shing to the Testator.

204. Clause 4 of the codicil ties in with Clause IV, sub-clause 6 of the will, which, it will be recalled, sought to make provision, inter alia, for "the children or lawful heirs" of D4, who was the son of the Tin-Fong wife, D1. At the time the Testator made his will, D4, who was then aged 47 and whose wife, D8; was then aged 46, had no children, and he and his wife have still produced none. I will now set out Clause 4 of the codicil:-

"If (whichever of) the three, Yiu-Kwan, Yiu-Kwong and Yiu-Wah begets two or more male offsprings and let Siu-Wing adopt one, then (he) can get a lump sum subsidy from Yeung Shing Land Investment Co. Ltd. of Hong Kong Dollars one million (HK$1,000,000.00). Moreover, there will be a monthly subsidy for that child as baby-sitter fee in the sum of Hong Kong Dollars two thousand HK$2,000.00), "Payment to be made perpetually". (Yiu-Kwan is P2; Yiu-Kwong is D9; and Yiu Wah is D10. Siu Wing is D4)

205. What Clause 4 of the codicil seeks to achieve is that one of the Testator's three grandsons (i.e. P2, D9 or D10) by the Kit-Fat wife should allow his uncle, D4, to adopt his second or subsequent son. The mechanism provided by Clause 4 of the codicil takes the form of a gift of $1 million to whichever of P2, D9 or D10 fulfills the condition of surrendering his second or subsequent son to D4 by adoption.

206. P2, D9 and D10 were relatively young men at the time of the Testator's death. Their ages then were 34, 30, and 29, respectively. If the court were to allow Clause 4 of the codicil to be implemented, the effect would be that a young boy would be removed from his, no doubt, perfectly satisfactory home comprising a comparatively young father and brother or brothers (perhaps also plus sisters) so that he could be given to a much older, childless couple.

207. As a traditional Chinese of the older generation, I do not doubt that the Testator had the most worthy motives in mind when he set down Clause 4 of the codicil: he did not want his son, D4, to die without a son to carry out sacrificial, ancestral rites, and so continue the cult of ancestors. See Pegg, Children in the Family Law of Hong Kong - Part II. [1980] H.K.L.J. 3.

208. Whatever might have been the aspirations of the Testator in drafting Clause 4 of the codicil, the law in Hong Kong, since the coming into force of section 25 of the Adoption Ordinance Cap. 290 on the 31st December, 1972, has set its face against the type of arrangement which the Testator hoped to bring about. There has simply been no scope for any new Chinese customary adoptions since the 31st December 1972. Since then, the guiding principle in all adoptions has been the welfare of the infant.

209. A provision less likely to promote the welfare of an adoptive child than Clause 4 of the codicil is difficult to envisage. A huge sum of money, namely $1 million, is offered to a father to sell his child into adoption. The idea of parents selling their children for adoption is complete anathema in all modern thinking about adoption. True, section 22(1) of the Adoption Ordinance presupposes that some forms of "payment, remuneration or reward" in connection with the adoption of an infant can receive the sanction of the court. I set out section 22(1) of the Adoption Ordinance:-

"Save with the sanction of the Court, no person shall make or give or agree to make or give, or receive or agree to receive, or attempt to obtain, any payment, remuneration or reward whatsoever in connexion, directly or indirectly, with the adoption or proposed adoption of an infant, except in consideration of the professional services of a qualified barrister or solicitor within the meaning of the Legal Practitioners Ordinance."

210. I do not have to speculate positively regarding what types of "payment, remuneration or reward" the court might see fit to sanction, in some circumstances under S. 22(1), but I have no hesitation in stating that the courts in Hong Kong would not conceivably permit a payment of the nature of the $1 million contemplated by Clause 4 of the codicil.

211. Conditions tending to the separation of parent and child have long been regarded as offensive to all notions of public policy: Re Morgan (1910) 26 T.L.R. 398; Re Sandbrook, Noel. v. Sandbrook [1912] 2 Ch. 471; Re Boulter, Capital and Counties Bank v. Boulter [1922] 1 Ch. 75 and Re Piper, Dodd v. Piper [1946] 2 All E.R. 503. The undisguised purpose of Clause 4 of the codicil is to bring about the separation of parent and child. The clear duty of a court is to declare such a provision void since it is so utterly at variance with the modern adoption law of Hong Kong.

212. Counsel for the trustees asked me to refrain from declaring Clause 4 of the codicil void at this stage. It was urged upon me that other jurisdictions, whose adoptions Hong Kong recognises as valid by virtue of section 17 of the Adoption Ordinance, might see nothing untoward in the type of arrangement contemplated by Clause 4 of the codicil. Section 17 of the Adoption Ordinance is as follows:-

but not otherwise.

 

                    "What about if the law of the State of Nevada approves of the arrangements proposed by Clause 4 of the codicil?" I am asked by the trustees. I strongly doubt whether any court in the Commonwealth or any State or territory of the United States of America, Nevada not excluded, would approve an adoption brought about as the result of the workings of Clause 4 of the codicil, but even if I am wrong on that, my duty remains the same, namely, to declare Clause 4 of the codicil void as offending public policy in Hong Kong. The court in Hong Kong should discourage such an adoption anywhere by here and now declaring Clause 4 of the codicil void. And that is what I do.

213. After so much controversy, it is gratifying to be able to finish up with one of the few clauses against which not one unkind word was said. That is Clause 5 of the Codicil:-

"The Will in my safe-deposit box should be opened jointly by Solicitor Choy of Messrs. C.Y. Kwan & Co., Solicitors and Solicitor Rowdget Young."

214. Perhaps I may be forgiven for observing that it is a pity that Solicitor Choy and Solicitor Rowdget Young did not get the opportunity to see the will before, rather than after it was put into the safe-deposit box. That way, much unnecessary expense, sweat and heart-ache might have been spared all round.

Appendix I

The Will

                    I hereby decide that the estate I shall leave in future shall be distributed as follows:-

Appendix II

The Codicil

                    If anything untoward should happen to me, besides dealing (with my affairs) in accordance with the Will which I made in March this year, I also make the following amendments .

Appendix IV

Estate Duty Valuation