RE LEE SAI WAI

CACV 301/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 301 OF 2002

(ON APPEAL FROM HCMP NO. 4859 OF 2001)

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1. This is an appeal from the judgments of Deputy High Court Judge Saunders given on 21 June 2002 and 15 July 2002. The matter before the judge was an application by the plaintiff under the provisions of the Inheritance (Provision for Family and Dependants) Ordinance, Cap. 481 ("the Ordinance"). The judge ordered that the personal representative of the estate of the deceased, Lee Sai Wai, should pay the plaintiff HK$1,750,000 and that the plaintiff's costs should be paid from the estate remaining after the payment of the lump sum award. At the conclusion of the hearing of this appeal, this court dismissed the appeal and said that it would give its reasons in writing which we now do.

The background

2. The plaintiff was the wife of the deceased. Her husband died on 23 April 2000. He left an estate which was valued at something over $5 million, which, after taking into account funeral and other expenses as well as a reduction in property values, was worth approximately $4,385,000. Part of that estate was a flat in Kornhill which was worth about $2,700,000. The deceased husband had left a will dated 30 March 1999 in which he left the whole of his estate to his two brothers and sister. There is no dispute that at the time of making the will the deceased had been advised about the effect of the provisions of the Ordinance. Nevertheless, he proceeded to make the will without leaving anything to his wife and without giving any apparent reason therefor to the solicitors. The defendant, who is the executrix of the deceased's will and was his sister, affirms that she was told by the deceased that he had made the will in that form because his assets belonged to the family.

3. The deceased had been married to the plaintiff for approximately nine years. They were 12 years apart in age. The deceased was 50 when he died. In the early part of the marriage, the plaintiff had remained in Canada with her parents whilst she gained the status of a permanent resident there. After that she had returned to Hong Kong.

4. At the date of the hearing the plaintiff was aged 40 and not in the best of health although, after hearing the evidence, the judge said that he was confident that her health would improve, particularly once this litigation had been concluded. He considered that the plaintiff would remain under some limited disability and would have difficulty in finding suitable work particularly in the present economic climate.

5. Quite justifiably, on looking at the material placed before this court, the judge came to the conclusion that it would be impossible for the plaintiff to live in the same home as the defendant or her brothers. There was clearly hostility between the plaintiff and her late husband's family and the judge found that it was reasonable that the plaintiff should have rented alternative accommodation. The judge was by no means satisfied that he had been told the full extent of the plaintiff's family circumstances in Canada and he concluded that the plaintiff had capital assets either in Hong Kong or Canada which had not been disclosed.

6. In relation to the defendant, the judge found that she was a manager of a company earning $21,000 per month. Her personal expenses were $10,900 a month and she had savings of $130,000 in addition to a flat in Tseung Kwan O which had been purchased in 1989 for $246,800. For some reason that flat remained empty although the judge clearly considered that it was an asset which could be put to some use.

7. No evidence was given by the defendant's two brothers. The evidence as to their circumstances came from the defendant. The eldest brother, Sai Ping, was aged 45 at the date of the hearing and was a teacher at the Institute of Physics, Academia Sinica, Taiwan earning approximately $24,800 per month. He was married and at the time of the hearing had two children. His expenses were in excess of his income but there was no explanation as to where that excess came from.

8. The younger brother, Sai Lun was aged 43 and was divorced with no children. He had been a network manager, an expression which the judge not surprisingly found to be unhelpful. He had undertaken volunteer work overseas with the Peace Corps and it appeared that at the time of the hearing he was living in Hong Kong looking for work.

The issues

9. The first issue which the judge had to determine was the extent of the deceased's interest in the assets which were in his name. The flat in Kornhill had been purchased in 1986 for a sum of $436,475. It was not disputed that in 1980 the deceased's aunt had left a total of $160,000 to be divided between the deceased and his brothers and sister and that the brothers' shares of this money had been transferred into the deceased's account and that the defendant herself had used a similar amount and slightly more to pay for various expenses connected with the flat. The flat had been purchased by a cash payment apart from $100,000 which had been borrowed on mortgage. That mortgage had been repaid in November 1990 shortly before the deceased married the plaintiff.

10. It was the defendant's case that the Kornhill flat was held in trust by the deceased for himself and his brothers and the defendant herself. Although there was a letter from the deceased's mother to one of the sons in Canada at about the time the flat was purchased saying that "we will have our perfect home. I am so happy that you all would have a place to live after coming back", the claim made by the defendant was put on basis of the contributions which had been made by herself and by her brothers to the purchase of the flat. There was no doubt that contributions had been made and, in particular, that the deceased had had the use of the bequest by the aunt. The exact amounts which had been paid and contributed by the brothers and the defendant were incapable of exact calculation. This is not particularly surprising because such records may well never have been properly kept.

11. Likewise, it was the defendant's case that the bank deposits and cash balances and the securities which were in the deceased's name had all been contributed to by the brothers and herself. Again, there was some evidence of contributions but the judge was by no means satisfied. One of the difficulties which the judge found was that although the brothers were present during at least part of the proceedings they never gave evidence either orally or, indeed, on affidavit. Furthermore, it was the defendant's case that the deceased had curtailed his own education in order to be able to work and help support the family as they were growing up. This court was shown parts of the transcript of the evidence of the defendant and it is clear that the judge was significantly sceptical as to the nature and extent of any payments which had been made to the deceased by his brothers. It is clear from the transcript that the judge was sceptical too about the defendant's assertion (made by her only during cross-examination) that she provided monies to the deceased for the purpose of making investments on her or the family's behalf. The judge took into account that before there had been any deposits from legacies the deceased had clearly been able to accumulate a very substantial sum and he concluded that he may well have been able to gain those funds from other sources. He also pointed out that the evidence as to the deceased's income that had been provided by the defendant was not complete. Moreover, there were a number of possible explanations as to the transfer of funds: for example, the money could have been for the support of the deceased's mother whilst she was alive, and the repayment of money provided for education of the brothers whilst they were in North America. In the absence of adequate evidence the judge was not prepared to conclude that anything other than a sum of approximately $90,000, being the defendant's and the brothers' share of the mother's estate which had been kept by the deceased with everybody else's agreement in order to refurbish the Kornhill flat, belonged other than to the deceased. In those circumstances, the judge concluded that the deceased himself was entitled to a two-thirds interest in the flat with his brothers and sister between them being entitled to a one-third interest and that the deceased was entitled to the full interest in the deposits and securities less $90,000. Although there were minor discrepancies Sir John Swaine SC did not take issue with the figure of $3,195,000 which resulted from such a calculation. The issue that was taken was as to the proportions to which the deceased had been entitled.

12. In my view having been taken by Sir John Swaine very carefully through the documentary and other evidence I do not see any basis upon which this court could interfere with the assessment arrived at by the judge. It was an estimate made in the face of unsatisfactory evidence and appears to me to have been reasonable in the circumstances.

The award under the Ordinance

13. Section 5 of the Ordinance sets out matters to which the court must have regard when exercising a discretion under section 4 to make an order on the basis that reasonable financial provision has not been made for an applicant. Since this case was conducted by the defendant on the basis that the applicant was entitled to some award the judge moved on to consider the various matters under section 5. The judge went through each of the factors to which he was required to have attention. Sir John Swaine made various criticisms of some aspects but these amounted to no more than that the judge had paid insufficient weight to one factor rather than another. It appeared that the defendant's argument on this appeal was really directed to the cumulative effect, namely a criticism that slightly more than 50% of what the judge had held to be the deceased's assets were awarded to the applicant. In my view, none of the criticisms which were made was sufficient to establish that the judge had erred in principle or misunderstood the evidence or taken matters into account which he should not have done or failed to take any relevant matters into account. Nor do I consider that the criticisms when taken together show that any error has been made. In those circumstances I do not consider that it is open to this court to interfere with the exercise of discretion by the trial judge which he is given under the Ordinance. Only one real point of law (as opposed to discretion) appeared at one stage to be raised by the defendant. In the defendant's skeleton submissions, it was said that in his consideration of the divorce standard under section 5(2) of the Ordinance, the judge applied the decision of the House of Lords in White v White [2001] 1 AC 596. It was submitted that this decision did not represent good law in Hong Kong and that therefore the judge fell into error. It is unnecessary to deal with this argument because upon analysis, the judge did not apply White v White at all. He expressly says so.

14. For the above reasons, the main appeal fell to be dismissed.

15. As to the defendant's appeal on costs, again we saw no basis to disturb the judge's exercise of discretion here. He was entitled to reach the conclusion he did.

Hon Ma JA:

16. I agree.

Hon Sakhrani J:

17. I agree.