CHINACHEM CHARITABLE FOUNDATION LTD v. CHAN CHUN CHUEN AND ANOTHER

CACV 62/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 62 OF 2010

(ON APPEAL FROM HCAP NO. 8 OF 2007)

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J U D G M E N T

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Hon Le Pichon JA:

1.  This was an application by the first defendant for leave to appeal to the Court of Final Appeal pursuant to section 22(1)(a) and/or the “or otherwise” ground in section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484. At the conclusion of the appeal, judgment was reserved which we now give.

The relevant background

2.  The action before Lam J was a probate action in which the plaintiff sought orders that the court should pronounce in solemn form the will dated 28 July 2002 (“the 2002 will”) of the late Nina Wang, deceased, in which the plaintiff is named the beneficiary and against the validity of an alleged will dated 16 October 2006 (“the 2006 will”) in which the first defendant is named the beneficiary although the nature and extent of his interest are controversial as will appear below.  The first defendant asked for orders to the opposite effects.  The judge found in favour of the plaintiff and against the first defendant, holding that the 2006 will was a forgery.  The first defendant’s appeal was dismissed.

3.  The first substantive paragraph of the 2006 will contained a bequest by the deceased of “all of the rest, residue and remainder” of her estate to the first defendant.  But the second paragraph of the 2006 will provided as follows:

“To my belief, [the first defendant], will be capable of determining the distribution and use of my estate in a good and proper way. My will is established entirely and wholeheartedly for the need and good of my family and loved ones. It is my great appreciation that my will could be announced fairly and righteously as stated.”

4.  That provision gives rise to issues of construction.  Several months before the trial, the parties reached an agreement on the issues to be tried in the first part of the trial.  The issues relating to construction are reflected in issues B(7) and (8) of the amended joint statement of issues dated 19 March 2009:

“(6) Whether the 2006 Will was, on its true construction, only a partial Will, taking effect only in respect of property not disposed of by the 2002 Will.

(7) Whether as a matter of construction of the 2006 will, the first defendant is entitled to the estate as a beneficiary or whether he is a trustee of the assets comprised within the estate for the benefit of others, and if so for whom.”

For convenience, they will be referred to as “the partial will issue” and “the construction issue” respectively.

5.  The construction issue did not become an issue for determination at the trial that commenced on 11 May 2009 because, on the authorities, it was not a proper probate issue.  Accordingly, it did not feature in the amended joint statement of issues revised on 6 May 2009 for use at the trial.  Had the first defendant succeeded before the judge, while the court would have determined the partial will issue, that being one of the issues to be decided in the first part of the trial, the resolution of the construction issue (the nature and extent of the first defendant’s beneficial interest under the 2006 will) was reserved for the second part of the trial which, in the event (given the decisions of the trial judge and of this court), became unnecessary.

6.  The plaintiff did not oppose the first defendant’s application for leave under the “as of right” ground contained in section 22(1)(a), seemingly, on the basis that the present case is indistinguishable from Wang Din Shin v Nina Kung, unreported, CACV 460/2002, 17 November 2004 and In re estate of Mui Yim Fong (No. 2) [2010] 5 HKLRD 112.

7.  The second defendant, the Secretary for Justice, withheld his consent to leave being granted as of right and, with a view to assisting the court in determining the application, invited the court’s attention to various principles that emerge from the relevant authorities.

8.  While the first defendant considered that its application under section 22(1)(a) was ‘unopposed’, I would observe that even where parties consent to leave being granted on the basis that the matter falls within section 22(1)(a) of the Ordinance (which is not the present case), that consent neither binds the court nor is the court precluded from requiring an oral hearing to decide the application if it is not satisfied on paper that the appeal lies as of right.

Whether leave is “as of right”

9.  The starting point must be the Court of Final Appeal’s decision in China Field Ltd v Appeal Tribunal (Buildings) (No. 1) [2009] 2 HKLRD 135.  Notably, Ribeiro PJ considered (at §§12-13) that “reliance on cases from the Commonwealth on leave to appeal as of right is problematical” and “only limited assistance can be obtained from citation of such Commonwealth cases”.

10.  Further, the Court of Final Appeal made it clear that a narrow construction should be adopted of the provisions allowing appeals as of right.  The rationale is stated in §16 which reads:

“16. Litigants in Hong Kong have a right of appeal to the Court of Appeal in respect of final judgments generally. The role of the Court of Final Appeal is not to permit a third bite of the cherry to any litigant who wishes to have another go. An appeal to the Court as of right is in principle oppressive to the party who has won in the Court of Appeal where the further appeal is without substance. Unless the appeal involves a point of law of public importance or unless grievous injustice would be done if the final court does not intervene, a successful litigant should not be dragged before a third tier of court. This approach does not, of course, argue against the Court retaining a discretion to grant leave to appeal in appropriate cases.”

11.  China Field established that it is the value of the claim which is the subject-matter of the appeal that is relevant and not the value of any property or right which has some connection with that claim.  Accordingly, as stated in §24 of China Field, for leave to be as of right under the second limb (i.e. a claim to property or a civil right amounting to or of the value of $1 million or more) two conditions must be satisfied:

“24. …it is only proper to ascribe a value which qualifies for leave as of right to the candidate claim or question if (i) on the evidence, such value is clearly quantifiable as a value of $1 million or more; and (ii) the court is satisfied that the Court’s order made upon disposing of the proposed appeal would take effect by immediately conferring or imposing on the relevant parties a financial benefit or detriment in the quantified amount. It is not enough that one is able plausibly to say that such a financial impact is a likely eventual result of the appeal.”

12.  The nub of the submissions of Mr Chow SC (who appeared for the first defendant) was that the present case is indistinguishable from Wang Din Shin and Mui Yim Fong.  Mr Chow further submitted that the capacity in which the first defendant takes the estate should the appeal be successful is irrelevant to the question whether his claim satisfies the requirements of section 22(1)(a).  It was said that the construction issue would only go to the question of proper administration or distribution of the estate but would not affect the value of the “claim” or “question” in the probate action.

13.  Mr Chow accepted that the right to administer the estate in the present case did not carry with it any clearly quantifiable value and he could not invoke that part of section 22(1)(a) that refers to “some civil right amounting to or of the value” of $1 million or more.  Nevertheless, he maintained that the first defendant comes within section 22(1)(a) because the first defendant has a claim to the estate and that such a claim could be a legal claim and not necessarily a beneficial claim.

14.  As for Wang Din Shin and Mui Yim Fong, I have no doubt that the present case is distinguishable because it is not ‘a winner takes all’ case at all.  In Wang Din Shin, a case concerning the validity of competing wills, each of the parties to the probate action was the sole beneficiary under the will propounded by him/her.  In Mui Yim Fong, the plaintiff who disputed the validity of the will was the sole person entitled to the deceased’s entire estate on the latter’s intestacy.  It is clear from §§23 and 24 of that judgment that it is the value of the claims of the respective parties in the estate in the sense of beneficial entitlement that is material.  In both those cases, the successful party stood to inherit the entire estate, the value of which exceeded the statutory threshold.  Hence the use of the phrase “winner takes all”.

15.  It should be mentioned that although reference was made in Wang Din Shin and Mui Yim Fong to observations of O’Leary CJ of the New Zealand Court of Appeal in In re White (Deceased), Brown and others v Free and others (No. 2) [1951] NZLR 428 at 431, given the remarks of Ribeiro PJ referred to in §9 above, they can only be of limited assistance.

16.  While it is the first defendant’s position that if he were to succeed in having the 2006 will pronounced in solemn form he would be beneficially entitled to the entire estate of the deceased as sole legatee, the first defendant’s own view of the proper construction of the 2006 is hardly conclusive.  It is incumbent on him to demonstrate and satisfy this court that he is so entitled or that his beneficial entitlement is worth at least $1 million.  In other words, the first defendant has to show that it is unnecessary for the court to resolve the construction issue (which would fly in the face of his previous stance in the amended joint statement of issues submitted to the judge referred to earlier) because he is bound to succeed on the construction issue.

17.  Plainly, the first defendant is not a position to do so.  The first defendant’s beneficial entitlement (if any) hinges on the resolution of the construction issue and unless and until there is a ruling in his favour, it cannot be said that he has any beneficial interest in the deceased’s estate, much less that it is quantifiable.  In my view, the requirement for ‘immediacy’ of the consequences of the court’s order is not met in the present case and for that reason the appeal cannot lie as of right.

18.  As regards Mr Chow’s contention that the fact that the claim is in a representative capacity (as distinct from a personal beneficial entitlement) will not prevent section 22(1)(a) from applying, if correct, taken to its logical conclusion it will mean that provided the value of an estate is over $1 million, leave to appeal will be ‘as of right’ for every contested probate action involving the right to administer the estate.  I have grave reservations as to the correctness of that proposition because it would involve adopting a large and liberal construction of the provision which is contrary to the approach explained in China Field.  In any event, the first defendant is not making a claim in a representative capacity.  Rather, he claims to be the sole legatee.

19.  For my part, I do not consider that the first defendant is entitled to leave as of right.  If I am wrong about this, no doubt it can be put right by the Court of Final Appeal who may consider it desirable to elucidate and provide further guidance on the application of section 22(1)(a) to probate proceedings.

The “or otherwise” ground

20.  The first defendant also seeks leave under the “or otherwise” ground.  It has to be recognized that the grant of leave on this ground is ‘exceptional’ and the usual practice of this court is to leave the decision to the Court of Final Appeal.

21.  While in Wang Din Shin leave was granted, inter alia, on the “or otherwise” ground, I do not consider that the vastness of the estate alone is sufficient to justify the exercise of the discretion.  At the very least, the intended appeal must have a modicum of merit.  In the present case, there is none that I can see.  For my part, I would not grant leave under this ground.

Hon Yuen JA:

22.  I agree with the judgment of Le Pichon JA.

Hon Kwan JA:

23.  I agree with the judgment of Le Pichon JA.

Hon Le Pichon JA:

24.  Accordingly, the first defendant’s application for leave to appeal to the Court of Final Appeal is refused with an order nisi of costs in favour of the plaintiff and the second defendant.

Mr Jeremy S K Chan, instructed by Messrs Wilkinson & Grist, for the Plaintiff/1^st Respondent

Mr Anderson Chow SC, instructed by Messrs Hau Lau Li & Yeung, for the 1^st Defendant/Applicant

Mr Michael Yin, instructed by the Department of Justice, for the 2^nd Defendant/2^nd Respondent