KIMBALL WONG v. CYNTHIA FOK SHIN YEE AND OTHERS

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JUDGMENT

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Sir Alan Huggins, V. -P.:

1. This case comes before the court by way of an appeal against an order of the late Zimmern, J. on a construction summons. The document to be construed was the will of FOK Cho-min, deceased, and the action was initially brought by FOK Tso-moon, one of the two executors named by the Testator and the only one to obtain probate: the other person named as an executor renounced probate. FOK Tso-moon has since died and his executrix, Kimball WONG has been substituted as Plaintiff. The original Defendant was FOK Yan-nung, and it appears to be common ground that a representation order was made on 12th January 1979 whereby he was appointed to represent sixteen persons said to be identified in the Will as persons among whom the executors had power to divide the residuary estate. FOK Tso-moon (the original Plaintiff) was himself one of the sixteen. FOK Yan-nung (the original Defendant) emigrated to the U.S.A. after the trial and did not initially appeal. Two of the other possible beneficiaries sought and obtained leave to appeal in his place. For convenience they were (although, perhaps, not with strict accuracy) referred to as the 1st and 2nd Defendants. By a consequent order CHEONG Bick-lan, the personal representative of FOK Yan-nung (who died after the appeal was begun), was substituted for FOK Yan-nung and described as the 3rd Defendant, while FOK Shiu-ying and FOK Cho-yue were joined as 4th and 5th Defendants respectively.

2. The Originating Summons, as it stood before the judge, sought an answer to the question whether upon the true construction of the Will the Plaintiff had, in respect of the residuary estate, (1) a general power of appointment, (2) a special power of appointment among the classes of persons consisting of the sixteen identified persons, or (3) a duty to deal with it in some other, and if so what, manner. No issue was raised as to the Executor's power to appoint himself as one of the sixteen. The judge held that the power was special, and it is against that decision that the 1st and 2nd Defendants appealed. The 2nd Defendant has, however, not appeared at the hearing of the appeal.

3. Before us it was agreed that the scope of the appeal should be wider than that justified by the decision of Zimmern, J. and that three further questions should be raised. We were handed a draft Amended Originating Summons but the amendments are grammatically so extraordinary that they are unintelligible. I understand the three further questions to be

The first of those questions has not been debated before us, it being accepted in this court (although the point is reserved for possible argument elsewhere) that if there is a general fiduciary power it is void.

4. There was no direct vesting of the residue in the Executors as trustees in favour of named beneficiaries: the disposition of residue is drafted in the form of a power. That is not conclusive as to the true nature of the power whether a power is a bare pourer or. a fiduciary power is a matter of construction and the aim in construing a will is to ascertain so far as is possible from the terms of the will what was the testator's intention.

5. There is, I think, no disagreement at the Bar as to the rules of construction to be applied to this Will. So far as possible we must give the natural meaning to the lords the Testator has used and we must construe the document as a whole. Only in case of ambiguity can we have regard to the possible consequences of adopting a particular construction and then we should assume that, having executed his Will by signing it in a manner approved by the law of Hong Kong, the Testator "did not intend to make a solemn farce, - that he did not intend to die intestate when he had gone through the form of making a will": see In Re Harrison (1885) 30.Ch. D. 390, 393. In Whishaw v Stephens 1970 A. C. 508 Lord Upjohn said at p.522A:

"There is no doubt that the first task is to try to ascertain the settlor's intention, so to speak, without regard to the consequences, and then, having construed the document, apply the test. The court, whose task it is to discover that intention, starts by applying the usual canons of construction; words must be given their usual meaning, the clause should be read literally and in accordance with the ordinary rules of grammer."

6. The disposition which we are called on to construe is that of the residue and is in the following terms:

"If there shall be a residue of the (said) surplus (after making provisions as aforesaid), the executors shall have full power to divide (such) residue among such persons as they may deem fit".

Looked at in isolation that is not capable of any interpretation other than that the objects of the power are unlimited. However, it is contended on behalf of the Respondents that when the Will is read as a whole a different intention appears. The Will may be divided into the following sections. (1) The Testator begins by reciting what the judge described as his "family tree", but which in truth is only selected branches of that tree. (2) He then gives an admonition, which is repeated later in a different form, to the effect that only his executors shall have any right to inquire into the extent of his estate. (3) After naming his executors he goes on (4) to make provision for the maintenance of some relatives for whom he feels a special responsibility: first come his natural mother and his late step-father's concubine; second, if there is sufficient property, are his mentally abnormal son (FOK Shiu-kee), Shiu-kee's wife and their daughter (FOK pik-shan). (5) Next comes the power which I have cited in relation to the residue, followed by (6) the second admonition against inquiry into matters which have been committed to the executors. At this point the Testator expresses his confidence in the named executors as "upright and moral minded as well as reasonable men". (7) Then the Testator appears to have an afterthought and makes specific bequests of money for the education of the two children of his step-daughter, Helen. Helen had earlier been described as another daughter called Ling whose personal English name is Helen, and who was born by my second wife WU Hor Kwai prior to her marriage to me". The judge refers to her in his judgment as "a step-daughter out of Wu Hor Kwai" and I take that to be a finding of fact. It is a finding which has not been challenged on the appeal. (8) The Testator refers to various parcels of land, the details of which are not material to this case save that some of them which were in the name of his wife were bought with moneys provided by the Testator and that others which had been bought by his eldest son (FOK Shiu-ying) with moneys provided by the Testator had, without the Testator's consent, been transferred to the Testator's wife. The Testator described this as a "fraudulent practice on the part of the said FOK Shiu Ying and the said CHAN Sau Miu". Whether or not that wad a fair accusation we do not know, but the Testator directs his executors to take legal proceedings "to recover the ownership of all the said properties in the interest of my estate". (9) Finally the Testator directs that the executors "shall have full power to receive and deal with the whole of my estate and in accordance with my wishes as mentioned above to deal with and handle for me".

7. In a codicil which was signed immediately after the Will itself the Testator again repeated his admonition against inquiries into the extent of his estate otherwise than by the executors and then expressed his thanks to the executors in the following terms:

"I (hereby) respectfully offer to my executors my many, many thanks as I consider that to administer estate (for others) is a labourous job which will involve all sorts of troubles. However, (it is my) hope that for the sake of me as their elder blood brother, will (my executors) please administer my estate for me, sparing no labour and braving grudges from other persons. (I hereby) offer many thanks again."

8. The proper approach to the question we have to decide is neatly stated in Snell's Principles of Equity (27th Edition) 95 as follows:

"In determining whether a power is a mere power or a power in the nature of a trust, the first thing to consider is whether there is a gift over in default of appointment. If there is, the power is a mere power; if there is not, it will probably be a trust power, though not necessarily so, for the absence of a gift over is not conclusive. The question is whether the donor has shown an intention that in any event the property shall go to the objects of the power. If so, it is a trust power; if not, a mere power of appointment."

The learned editors cite several cases as authority for this passage but the only one to which I need refer is In re Perowne, deceased Perowne v Moss 1951 1 Ch. 785, where one of the questions to be determined was whether a gift over in default of appointment was to be implied. The property was left to the decease's husband "knowing that he will make arrangements for the disposition of my estate, according to my wishes, for the benefit of my family ......". The husband appointed the deceased's two sisters-in-law who were held not to be members of her "family". Harman, J., having adopted the principle laid down by Romer, J. in Re Weekes' Settlement, 1897 1 Ch.289, 292, is reported as saying at p. 790:

"Where, in a marriage settlement there is a gift to such of the children as A shall appoint, or in trust for such class as he shall by writing indicate, it is very easy to assume a gift over in default, because that is the natural thing to Suppose; but where the class is large and indefinite, it seems to me much more difficult to imply a gift over"

It is therefore relevant to consider who were the objects of the power in the present case.

9. The words of this power indicate no limit beyond the decision of the executors as to which persons are to receive the residue. It is therefore contended on behalf of the Respondents that, when the Will is read as a whole, there appears an intention to restrict "persons" at least to persons named in the Will as members of the Testator's family. Such an intention, it is said first, is apparent from the inclusion of the recitation at the beginning of the Will of the names of relatives who are not subsequently provided for expressly: there was no relevant purpose in that recitation unless the Testator anticipated that they would be possible recipients of the residue. Secondly, reliance is placed on the assertion that "no other persons shall have any right to interfere with, or make enquiries into, the matter". That was a consideration which Zimmern, J. appears to have thought conclusive: he was of opinion that the Testator would never have used those words if the objects of the power were to be "all persons at large". Mr. Morritt has conceded that the judge may have attached undue weight to those words but still relies upon them as supporting the judge's conclusion.

10. For my part I am quite unable to read any limitation into the power to divide the residue. The Testator could so easily have added some limitation if he had intended one, and that required no knowledge of legal language. He may well have been relying upon an assumption that his executors, upon whose qualities he expressed himself to be satisfied, would not without very good reason dispose of any part of the residue to strangers. Even that is conjecture and it seems to me that any conclusion. that the Testator intended only his named family members to take is also conjecture. The purpose of the inclusion of the "family tree", is yet another matter of conjecture, it is not to be assumed that everything contained in a will is intended to be dispositive: a name may be included solely to indicate that it has not been forgotten. Equally the Testator may have thought it appropriate to name his family members as a matter of historical record. I am not persuaded that it must have been intended that only those who are identified in the Originating Summons and who were still living at the date of the Testator's death should be objects of his bounty.

11. That is enough to convince me that the power was not limited. A further difficulty would otherwise arise as to the extent of the limitation. The Originating Summons cites a class consisting of sixteen persons. That class includes his wife (CHAN Sau-miu) and his step-father's concubine (WU Hor-kwai), his mentally retarded son FOK Shiu-kee, Shiu-kee's wife (NG Shung-yee) and Shiu-kee's daughter (FOK Pik-shan) for all of whom other provision was made, but excludes two persons named in the Will, namely Ka Tei and Ti Ti (the daughter and son of Helen) for whom provision had also been made elsewhere. Why should Helen's children be excluded from the objects? If the Testator had clearly excluded them, one could readily guess at his reason: a Chinese man might be content to bequeath a legacy to a child of his step-daughter but not be prepared to allow that child to share in the residue of his estate. However, it cannot be assumed that this Testator would have been of that mind. It would be no less likely that, having made express and ample provision for the maintenance of five other members of the class the Testator would have thought they were all sufficiently benefited without their having a share in the residue. To that must be added the fact that one of the other five (his wife, CHAN Sau-miu) appears to have incurred the Testator's wrath by receiving the parcels of land "fraudulently".

12. Here we are concerned with a share of a residue and there was no express gift over in default. Lord Reid said in Whishaw v Stephens (supra) at p.517F:

"Under modern conditions it may be necessary to relax older and stricter standards. If I adopt methods of construction appropriate for commercial documents and documents inter rusticos I must consider whether underlying the words used any reasonably clear intention can be discerned."

Approaching the matter in that way I think the whole tenor of this Will is that the Testator intended to dispose of his entire estate. For that purpose the executors were to have "full power to receive and to deal with the whole of [his] estate" and they were to administer that estate "sparing no labour and bearing grudges from other persons". Even though in other parts of the Will the Testator used more obvious language of obligation, clearly it was not to be open to the executors to avoid grudges by failing to exercise the power of division. I have therefore come to the conclusion that this was a fiduciary power which the executors were bound to exercise and which the court would exercise if they did not do so.

13. It being accepted in this court that such a general fiduciary power is void, the appeal must succeed. In the circumstances I do not find it necessary to discuss the other issues which were canvassed before use. I would allow the appeal and declare that the power is void for uncertainty, with the result that the residuary estate devolves as upon an intestacy.

Cons, V. -P.:

14. I agree entirely with what my lord has said.

Yang, J. A.:

15. I agree that the appeal should be allowed.

16. The whole spirit of the Will was not to make the two executors beneficiaries of the residue. There was no absolute gift to them, nor was there any gift in default of distribution. The younger brothers had, by the terms of the Will, an obligation to distribute the estate. It would appear from the Will that they were given a power to decide who should take on a distribution. It was not a power given to them to distribute or not to distribute.

17. The only issue that troubled me was whether the two younger brothers named as executors were directed to distribute the residue to those members of the family named in the Will or to an undefined class of persons. There was some force in the argument that meaning must be given to that part of the will setting out the names of the testator's family. It was contended that the part of the Will dealing with the disposition of the residue and the part giving the list of names, read together, must show that the testator   intended those persons named to be the beneficiaries. The answer to that argument, attractive though it was, seems to be that if that had indeed been the intention, it would have been a simple matter for the testator to say so explicitly and instructed his brothers to distribute the residue to those named. The Will instructed that the residue was to be divided "among such persons as they may deem fit". These are unambiguous words, the obvious meaning of which was a division amongst any persons whatsoever. In my view the mention of the names of the family members is not sufficiently strong to alter the clear meaning of the words in question.

18. We therefore have here a trust to dispose of the residue among the world at large, without anything said to indicate the metes and bounds with which to fetter the two brothers. The testator having failed to make his own choice of those who were to receive his bounty, the disposition was ineffective.