HONG KONG BANK TRUSTEE LTD. AND ANOTHER v. FU CHUI YING AND OTHERS

1993, MP No.1754

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H E A D N O T E

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Will - Construction - Residuary gift to "Oxfam Ethopia Fund" - Concept of "Fund" - Charity ceasing to exist - Misdescription of legatee - Falsa demonstratio - Admissibility of testator's instructions for making of will to resolve ambiguity over identity of legatee.

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1993 MP. No.1754

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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J U D G M E N T

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1. Mr Wong Yu Shing, ("the Deceased"), who made his will in English on 5th July 1990, died on 5th December 1990, survived by his widow (the 1st Defendant) and their seven children (the 2nd to 8th Defendants).

2. The sworn value of the Deceased's estate for estate duty purpose was $11,665,913.

3. By his will, he left his wife and the seven children $100 each, explaining in its Clause 5

"I am conscious that the bequest to each of my children is very small but I am of the view that all my children are sufficiently well-off and do not require any monetary assistance from me."

4. Those are the only specific bequests made by the will.

5. To his grandson, Wong Chun Kwan, who had been born on 7th January 1989, he left (by Clause 6(c)(i) of the will), one twenty-fourth of his residuary estate provided the boy gets admitted to university or some similar institute for tertiary education before reaching the age of twenty-one, but if he fails to, that share is to go equally to :

"The OXFAM ETHOPIA FUND presently of Ground floor, 3B June Garden, 28 Tung Chau Street, Tai Kok Tsui, Kowloon, Hong Kong and PROJECT ORBIS presently of 330W 42nd Street NY 10036 United States of America absolutely"

6. The remaining twenty-three twenty-fourths of his residuary estate he left, by Clause 6(c)(ii) :

"equally to The OXFAM ETHOPIA FUND presently of Ground floor, 3B June Garden, 28 Tung Chau Street, Tai Kok Tsui, Kowloon, Hong Kong and PROJECT ORBIS presently of 330W 42nd Street NY 10036 United States of America absolutely."

7. There is no problem about the validity of the gift to Project Orbis, being a correctly named charitable institution with an airborne operating theatre which is flown to various impoverished parts of the world for the purpose of performing eye-surgery on the needy.

8. A challenge has, however, been made by the 1st to 8th Defendants, as the Deceased's next-of-kin, to the validity of the purported gift to "The Oxfam Ethopia Fund". They contend that, since at the time the Deceased made his will and when he died, there was no "Oxfam Ethopia Fund", the gift should lapse, in which event they would inherit that part on the basis of a partial intestacy.

9. The 9th Defendant, Oxfam Hong Kong, ("the Company"), a Hong Kong private company limited by guarantee, contends that, on its true construction, the will meant to describe the Company when it referred to "The Oxfam Ethopia Fund presently of Ground floor, 3B June Garden, 28 Tung Chau Street, Tai Kok Tsiu, Kowloon, Hong Kong."

10. Hong Kong Bank International Trustee Ltd. ("the 2nd Plaintiff"), a company registered in Nassau, Bahamas, was appointed by the Deceased to be executor and trustee of his will. The 2nd Plaintiff, by a power of attorney, appointed Hong Kong Bank Trustee Limited, (the 1st Plaintiff), a company incorporated in Hong Kong, its attorney for probate purposes in relation to the Deceased's estate. On 26th January 1993, the 1st Plaintiff took out letters of administration to the Deceased's estate with the will annexed.

11. Both Plaintiffs have joined in taking out the present construction summons for the purpose of determining whether the Company is entitled as a residuary legatee under the Deceased's will.

12. The Company was incorporated on 13th May 1988 with the name "Oxfam Hong Kong Limited". It changed its name on 2nd May 1991 by dropping the word "Limited". Its principal objects have always been :

"to relieve poverty, distress and suffering in any part of the world irrespective of nationality, race, political system, religion or colour (including starvation, sickness or any physical or mental disability or affliction) and primarily when arising from any public calamity including famine, earthquake, war or civil disturbance or the immediate or continuing result of want of natural or artificial resources or the means to develop them and whether acting alone or in the association with others; and in particular but without prejudice to the generality of the foregoing, for that purpose :-

(i) to provide food, healing, clothing, shelter, training and education and to undertake or assist in work calculated directly to achieve that purpose;

(ii) to promote research into medical, nutritional, humanitarian and agricultural matters relating to the relief of such poverty, distress and suffering as aforesaid and publication of the results thereof;

(iii) to undertake promotional and education campaigns on matters relating to (See Document Bundle, page 26) the causes of poverty, distress and suffering and on matters relating to social justice."

13. In practical terms, the work carried out by the Company can be broadly classified under three heads : relief, rehabilitation, and development. Relief is self-explanatory, the Company's efforts to provide food and medical assistance in Ethiopia in 1990 being as good an example as any. Rehabilitation extends to such activities as providing seeds and draught-animals for farmers who have lost the wherewithal to continue their livelihood from a calamity like drought. Again Ethiopia in 1990 is a good example. Development, as exemplified by Ethiopia, ranges from digging wells to providing general education by setting up schools for poor children or specialist education such as training the disabled to be welders.

14. Between March and May 1990, the Company embarked on a campaign to raise funds for famine relief in Ethiopia. The publicity material used by the Company for that campaign was in both English and Chinese. That campaign was conducted under the name "OXFAM ETHIOPIA EMERGENCY APPEAL", and the public was invited to write cheques in that name by way of donations. The Company paid those donations into its account No. 001-537000-005, entitled, "Oxfam Hong Kong Limited - Ethiopia Fund" at the Mongkok Branch of Hong Kong and Shanghai Bank at No. 637, Nathan Road. That account has a history going back to the 31st January 1985, with which I will deal more fully in due course. That Oxfam Ethiopia Emergency Appeal campaign must have been largely instrumental in the Company being able to send $6 million to Ethiopia between March and July 1990 (Bundle 2, page 112).

15. When the Deceased made his will on the 5th July 1990, both the Company's registered and principal office was at the same Tung Chau Street address which the Deceased put in his will for "Oxfam Ethopia Fund". That had been the address for the Company's principal office since the 1st August 1989, and still is.

16. The Company is the only organisation in Hong Kong entitled to use the word, "Oxfam". It does so by virtue of a licence agreement made with Oxfam U.K. on 1st June 1988.

17. The name "Oxfam", and the charitable works associated with it, have been known in Hong Kong since at least the 1950's. "Oxfam" is an abbreviation for the "Oxford Committee for Famine Relief", a charitable society started in Oxford, England, in 1942, with the original purpose of sending help to hungry children in Nazi-occupied Greece. From that small beginning, Oxfam U.K.'s objects were gradually extended to include famine relief and related works wherever in the world the need was greatest. Oxfam U.K. now has a world-wide network of related organisations, including the Company.

18. Oxfam U.K.'s connection with Hong Kong started in the 1950's at which time Hong Kong had many poverty-stricken people. Oxfam U.K. funnelled millions of dollars into Hong Kong, firstly, for emergency relief, and then to assist Hong Kong's development towards self-sufficiency. In the year 1962, for example, Oxfam granted nearly $2 million to charitable organisations in Hong Kong for such work as feeding malnourished children, and, with a view to making Hong Kong more self-sufficient, making grants to establish fish farmers in the New Territories. By the mid-1970's, Hong Kong had thrived to the point where, instead of being a beneficiary of Oxfam U.K.'s programmes to help the needy worldwide, it was able to assume the role of benefactor, working in association with Oxfam U.K. In the year 1976, Oxfam Group, Hong Kong, was established as an unincorporated charitable trust, raising money in Hong Kong as a branch of Oxfam U.K., to which it sent all the funds raised here, so that they could be applied to Oxfam U.K.'s worldwide charitable work.

19. Oxfam Group, Hong Kong was the predecessor of the Company, with Oxfam Group, Hong Kong, evolving into the Company when the latter was incorporated on 13th May 1988. As usually happens when a charitable trust moves over to a company format, the Company took over all the assets and liabilities of Oxfam Group, Hong Kong. Reference to that is to be found in para.3(a) of the Company's Memorandum of Association.

20. The Company, from the outset, carried out its work autonomously, directly funding programmes in Africa and Asia, instead of sending funds to Oxfam U.K. as the unincorporated Oxfam Group, Hong Kong had done.

21. One of the high points of the Oxfam Group, Hong Kong's activities had been the campaign it mounted in 1983, and continued through the years 1984 and 1985, to raise funds for the wide-spread famine which befell Ethiopia at that time. It was conducted under the name, "Oxfam Ethiopia Fund", which are the very words in the Deceased's will, (apart from the obvious misspelling, "Ethopia"), which have given rise to the issue in the present proceedings.

22. While the evidence is not entirely clear as to what was the address of the Oxfam Group, Hong Kong prior to the 31st January 1985, there is no doubt it was not the Tung Chau Street address which the Deceased gave for "Oxfam Ethopia Fund" in his will. As likely as not, the address of Oxfam Group, Hong Kong prior to the 31st January 1985 was Swire House, as can be seen from Document Bundle (2) at page 52. The precise address is really of no significance : what is significant is that it was not the Tung Chau Street address.

23. The bank account used by Oxfam Group, Hong Kong for its "Oxfam Ethiopia Fund" campaign was No.002-855-492-005 with the Hong Kong and Shanghai Bank under the name, "Oxfam Ethiopia Fund", but the evidence is not clear as to which branch of the bank held that account. That account was closed on the 31st January 1985 when Oxfam Group, Hong Kong moved its principal office to Hong Kong Bank Building, 673, Nathan Road, Kowloon. Hong Kong and Shanghai Bank has its Mongkok branch at that address, and, on moving there, Oxfam Group, Hong Kong opened account No.001-537000-005 with the Mongkok branch of the Hong Kong and Shanghai Bank under the name "Hong Kong Oxfam Group - Ethiopia Fund". That account continued under the same name until Oxfam Group, Hong Kong became incorporated as the Company in May 1988, whereupon the name of the account was changed to, "Oxfam Hong Kong Limited - Ethiopia Fund", and subsequently became, "Oxfam Hong Kong - Ethiopia Fund", after 2nd May 1991 when the Company changed its name by dropping, "Limited". The account is still operative. The only other change in relation to that account is that, with effect from the 1st August 1989, the address was changed to that of the Tung Chau Street premises to which the Company moved on that date. That account No.001-537000-005 is the one into which the Company paid cheques received as the result of its "Oxfam Ethiopia Emergency Aid" campaign, launched in March 1990.

24. When the Deceased made his will on the 5th July 1990, no one was conducting a charitable campaign under the words, "Oxfam Ethopia Fund", and Oxfam Group, Hong Kong, which had conducted such a campaign from 1983 to 1985, no longer existed. Does that mean that the bequest in the will to "The Oxfam Ethopia Fund" should lapse?

25. As I construe the will, the word "Oxfam" in "Oxfam Ethopia Fund" was an abbreviation of the name of the Company when the will was made, namely, "Oxfam Hong Kong Limited". No testator intends to make a gift to a non-existing entity. At the time the Deceased made his will, the Company existed at the Tung Chau Street address, whereas Oxfam Group, Hong Kong, which had conducted the "Oxfam Ethiopia Fund" campaign, no longer existed, and had never been located at the Tung Chau Street address.

26. In the eyes of the law, "Oxfam Ethopia Fund" has never been a legal persona. When donors wrote out their cheques to "Oxfam Ethiopia Fund" in 1984 and 1985, the reality was they were making a gift to the unincorporated charitable trust, Oxfam Group, Hong Kong, earmarked for its work in Ethiopia. When the Deceased made his residuary bequest to, "Oxfam Ethopia Fund", what the words meant, in my view, was that the money should go to the legal persona with the word, "Oxfam", in its name, operating out of the Tung Chau Street address, which was administering charitable funds for use in Ethiopia. The legal persona the Deceased must have had in mind was the Company which embodies the word "Oxfam" in its name. To the Deceased, it clearly made no difference whether that persona was the unincorporated charitable trust Oxfam Group, Hong Kong or the Company. That can be deduced from the final paragraph of Clause 6 of his will :-

"I FURTHER DECLARE that if any body to which a gift is made has changed its name or amalgamated with or transferred its assets to any other body then my Trustee shall give effect to the gift as if it had been made to the body in its changed name or to the body resulting from the amalgamation or to which the transfer has been made."

27. In the same way that "Oxfam Ethopia Fund" was not a legal persona, neither was "Oxfam Ethiopia Emergency Appeal". Anyone donating money to either of those campaigns was doing so to the legal persona running the campaign, that is to say, Oxfam Group, Hong Kong in relation to the 1983-1985 campaign, and the Company concerning the 1990 campaign.

28. The circumstance that the Deceased made his will such a short time after the Company's campaign under the name, "Oxfam Ethiopia Emergency Appeal" is indicative that he, like many other people in this community, responded to that campaign, but, in the Deceased's case, he managed to get the name wrong. Common sense suggests that the words, "Oxfam Ethopia Fund", in the will, meant, at the time the will was made, money was being bequeathed to the Company for use in its charitable work in Ethiopia.

29. The attitude of the courts, exemplified in such cases as In re Of ner, Samuel v. Ofner [1909]1 Ch 60, that a testator can be supposed to have intended to make a disposition to an existing, rather than a non-existing, person is, in effect, an aspect of the law's presumption against intestacy. In the Deceased's case, it is clear that he had no intention of dying partially intestate, bearing in mind the fact that he made both specific bequests and residuary bequests.

30. The concept of how a bequest to a charitable body can be treated by the courts as earmarked for one area of the work of that body is illustrated by Re Tharp, Longrigg v. The Peoples ' Dispensary for Sick Animals of The Poor, Incorporated [1943]1 All ER 257 where a testatris divided her residuary estate amongst various institutions including "... the Tangier Society for the Prevention of Cruelty to Animals, care of The Dispensary for Sick Animals, 14, Clifford Street, Bond Street, London." There was no dispute that by "... The Dispensary for Sick Animals" the testatrix had meant the charitable institution in England which went under the name "The Peoples' Dispensary for Sick Animals of The Poor, Incorporated", and was the appellant in that case. There never had been any society known as "The Tangier Society for the Prevention of Cruelty to Animals", although the appellant had established a branch organisation in Tangier without any separate constitution of its own. The testatrix during her life had made donations for what she described as, "The Tangier Fund", which she sent to the appellant's address at 14, Clifford Street. The court there treated the residuary bequest in issue as one intended by the testatrix as a gift to the appellant, earmarked for the work of its Tangier Branch.

31. Based on the words used by the Deceased in his will, and the surrounding circumstances at the time it was made, such as the Company featuring the unusual, made-up word "Oxfam" as part of its name, the Company having the sole right in Hong Kong to use that word "Oxfam" in connection with its charitable activities, the Company having the same Tung Chau Street address as used by the Deceased in his will for, "Oxfam Ethopia Fund", and the Company's then - current campaign for "Oxfam Ethiopia Emergency Aid", I am satisfied that the correct construction for the words, "The Oxfam Ethopia Fund presently of Ground Floor, 3B June Garden, 28 Tung Chau Street, Tai Kok Tsui, Kowloon, Hong Kong", in the will is that they mean the Deceased was making a bequest to the Company, earmarked for its work in Ethiopia.

32. An alternative route arriving at the conclusion that the testator intended the gift to be simply for, "Oxfam" meaning, inferentially, the Company, is via the somewhat technical rule of construction of documents known by the Latin tag, "falsa demonstratio" which is short for "falsa demonstratio non nocet cum de corpore constat", which translates as, "a false description does not vitiate when there is no doubt as to the subject meant". The false description must merely be added on to that which is otherwise clear. If, of various terms used to describe a subject matter, some are sufficient to ascertain the subject with certainty but others add a description which is not true, these other terms are not allowed to vitiate the gift. The characteristic of cases within the rule is that the description, so far as it is false, applies to no subject at all, and, so far as it is true, applies to one only. Here the description of Oxfam and the address are correct, and can apply to one subject only, namely, the Company. The extra words "Ethopia Fund" apply to no subject at all, and will not vitiate the gift.

33. On the topic of falsa demonstratio, see Williams on Wills, 6th Ed., 497 et seq.

34. If recourse can be made to some written instructions (Document Bundle, pages 46 and 47) the Deceased gave to the 2nd Plaintiff on 11th May 1990 for the purpose of making the will he eventually signed on 5th July 1990, his intention that the Company was meant to be the object of his bounty can be even more readily discerned.

35. The Deceased had first called at the offices of the 2nd Plaintiff on 3rd May 1990 for the purpose of giving instructions for the drafting of his will. He returned to the 2nd Plaintiff's office on 11th May 1990 to hand in full written instructions in Chinese (except the one word in English, "Ethiopia", correctly spelt) on what he wanted to go into his will. Using the same three Chinese characters employed by Oxfam Group, Hong Kong and the Company for, "Oxfam", along with the English word, "Ethiopia", the written instructions were, insofar as relevant for present purposes,:

"Oxfam : ETHIOPIA

The Flying Optics Hospital

half each"

36. No Chinese characters or other writing were there to indicate "Fund". His written instructions, translated into English (Document Bundle, pages 120 and 121) were, therefore, simply "Oxfam : Ethiopia". Based on those written instructions, the 2nd Plaintiff drafted the will subsequently signed by the Deceased with the words "Oxfam Ethopia Fund". It is clear that it was the idea of those working in the 2nd Plaintiff, and not the Deceased's idea, to add in the word, "Fund". The staff of the 2nd Plaintiff who managed to leave out the "i" of "Ethiopia" look also to have taken it upon themselves to add in the word, "Fund".

37. "Oxfam Ethiopia" standing alone, without the word "Fund", cuts the ground from under the next-of-kin's attempt to show that the Deceased, by his will, intended to make the bequest to the no-longer-existing Oxfam Group, Hong Kong which conducted the "Oxfam Ethiopia Fund" campaign in 1984/5.

38. Those words, "Oxfam Ethiopia", in context, clearly mean, "the Company for its work in Ethiopia".

39. For the next-of-kin, In re Cheadle, Bishop v. Holt [1900]2 Ch 620 was cited for the proposition that extrinsic evidence is inadmissible to show a testator's intention. There, the court refused to admit direct evidence of the intention of a testatrix from an affidavit made by the solicitor who prepared her will. Lord Alverstone, M.R., while asserting, "As a general rule evidence of intention outside the will cannot be received ...", went on to acknowledge the existence of "exceptional cases in which it may be admitted". Rigby, L.J., in the same case, at page 624, indicated that, had the case been one of mere equivocation, extrinsic evidence of intention could have been admissible.

40. One of the exceptional situations of equivocation where extrinsic evidence bearing on intention can become admissible is where a factual doubt exists as to the identity of the legatee to whom the testator by his will intended to refer : Rabin v. Gerson Berger Association Ltd. [1986]1 W.L.R.526, where, (at page 535), Fox L.J. cited the following passages from the judgment of Cozens Hardy M.R. in In re Ofner with approval, (the underlining of the passages relevant for present purposes being mine) :

"One cannot suppose the testator intended to make a gift to a non- existing person. According to the language of Wood VC in Bernasconi v. Atkinson. 'the Courts have a right to ascertain all the facts which were known to the testator at the time he made his will. or (as it has been expressed). to place themselves in the testator's position. in order to ascertain whether there exists any person or thing to which the description can be reasonably and with sufficient certainty applied. - the presumption necessarily being. that the testator intended some existing matter or person.' Therefore it seems to me we start with this, that the testator did intend some person by the words 'my grandnephew Robert Ofner.' There must therefore be a misdescription somewhere, and what we have to discover is whether there is any person, whom he had misdescribed by the terms 'Robert Ofner' - whether, in fact, 'Robert' was a phrase which he incorrectly used to describe the person who was really 'Richard' the brother of Alfred. We have had a very interesting argument to the effect that no evidence at all is admissible on that point, unless it goes to the extent of proving a habit of the testator to call his grandnephew Richard by the name of Robert, and we have had a further argument that a document, which I will refer to more particularly in a minute. cannot be looked at at all to assist us in ascertaining whether it was a misdescription because the document is really instructions for a will. I am unable to agree with either of those propositions. Of course. if you can prove a habit of the testator you may do that. because it is so much clearer than anything else. but I shrink from saying that evidence is not admissible unless it goes to the extent of habit. If, for instance, you could prove that the testator had at or about the date of his will written to his grandnephew Alfred's brother and had addressed it to whom as 'Robert', and if you had nothing more than that, I think such evidence would be admissible to shew that Richard was the person really meant by 'Robert'. The weight of a particular document is of course a different matter from its admissibility. When you find a document practically contemporaneous with the will. and a document of intrinsic importance in itself. I shrink from saying not only that it is not an admissible document. but that it is not a document which in the absence of all countervailing evidence ought to be acted upon by the Court."

and

"We are all familiar with cases in which a legacy is given to a charity by an inaccurate name. and then evidence is tendered to this effect: the testator may have described a charity in a written document by its wrong name. may have given a cheque to it in a wrong name; the evidence is admissible to shew what was the particular charity intended by the inaccurate description used in the will. You do not use it for any other purpose than that. to identify the person or object who has been misdescribed."

41. Once the instructions from the Deceased to the 2nd Plaintiff for his will are admitted in evidence, as I am satisfied they can be for the purpose of resolving any factual ambiguity as to the identity of the beneficiary, his words "Oxfam Ethiopia", standing alone, add further fortification to the already strong indications in the will that it was the Company whom the Deceased meant to describe as the beneficiary.

42. For the next-of-kin, it is argued that a gift to "Oxfam Ethopia Fund" - and the same would apply to "Oxfam Ethiopia" - gives rise to ambiguity in that it is not clear whether the Deceased intended the residuary bequest to benefit the Company's general charitable work in Ethiopia, or, whether his intention was for the gift to be applied to what those appearing for the next-of-kin contend are the more limited purposes of the Company's Ethiopia Emergency Appeal. According to the argument put forward on the next-of-kin's behalf, the Deceased would only have had in mind emergency relief for Ethiopia, such as food for the starving, but not longer-term rehabilitation or development work such as one of the Company's programmes in Ethiopia for training the disabled to become welders. While that argument serves to muddy the waters somewhat, I fail to see how in the long run it benefits the next-of-kin, since on either alternative the money will go to the Company.

43. The construction I prefer as being more likely to embody the Deceased's intention, based on the words of the will and the surrounding circumstances at the time of the Deceased's making it, is that the gift was intended for the Company's general charitable work in Ethiopia including emergency relief. I find it difficult to imagine that, at the point of giving, any donor would have had in mind imposing restrictions on the Company as regards the charitable objects for which the Company could use it.

44. If, as a matter of construction, the alternative of emergency relief correctly embodies the Deceased's intention, then there is no problem in the court directing that the money goes to the Company for the purposes only of its Emergency Relief Aid programme in Ethiopia, such programme being in existence both at the time of the Deceased's making his will and of dying.

45. There is no need for the doctrine of cy-pres to come into play on the construction of the will I have adopted to the effect that the words of the will mean that the Deceased was making a residuary gift to a charitable institution, namely, the Company, existing at the time of the Deceased's making his will, and at his death, for the purposes of the charitable works it was carrying out in Ethiopia at both those times, as well as after his death. Since 1993 the Company has had an on-going ten year famine-relief programme for Africa with projected annual expenditure of HK$10 million. Along with Mozambique, Sudan and Somalia, Ethiopia is expected to be one of the primary countries of operation.

46. Cases cited on behalf of the next-of-kin about bequests to charities never known to have existed, (In re Harwood [1936]1 Ch 285 : "the Wisbech Peace Society Cambridge (which is a branch of the London Peace Society)"), and to charities which did exist at the time of making the will but ceased before the death of the testator, (In re Rymer, Rymer v. Stanfield [1895] 1 Ch 19 : "St Thomas' Seminary for the education of priests in the diocese of Westminster for the purposes of such seminary"; and In re Slatter's Will Trusts, Turner v. Turner [1964]1 Ch 512 "the Malahide Red Cross Hospital of Boundary Road, Pennant Hills, New South Wales, Australia"), are simply not in point, since the Company did exist at the time the Deceased made his will and continued to exist at the time of his death.

47. In view of the above, my determination is that the gifts in Clauses 6(c)(i) and (ii) of the Deceased's will to "The Oxfam Ethopia Fund" are valid gifts to the Company, Oxfam Hong Kong, earmarked for its general charitable work in Ethiopia.

48. This judgment is delivered pursuant to O.42, r.5B. I make an order nisi that all parties are to have their costs from the estate, taxed on a common fund basis.