TSANG YUET MUI, IN HER CAPACITY AS THE PERSONAL REPRESENTATIVE OF THE ESTATE OF TANG YIP SANG, ALSO KNOWN AS TANG IP SANG, DECEASED v. WAN ON, IN HIS CAPACITY AS THE PERSONAL REPRESENTATIVE OF THE ESTATE OF TANG YUNG AND ANOTHER

HCMP 2314/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2314 OF 2012

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J U D G M E N T

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1.  The plaintiff (“Madam Tsang”) on behalf of the estate of her late husband (“Tang Yip Sang”) seeks succession to the interest in various lots of land in Lantau Island held in the name of his late aunt (“Madam Chong”) pursuant to section 17 of the New Territories Ordinance Cap 97 (“NTO”).

2.  Madam Tsang named the 2 daughters of Madam Chong as the defendants.  One of them (“Madam Tang Yung”) has passed away and her surviving husband, Wan On, as the personal representative of her estate, was named the 1^st defendant.  He did not come forward, despite actual and substituted service of the proceedings.  The other daughter (“Madam Tang Wah Tai”), the 2^nd defendant, acknowledged service of the proceedings but indicated no intention to defend.

3.  No other person claiming to be interested in the lots of land in question has appeared, despite substituted service of the proceedings.

BACKGROUND

4.  10 lots of rural land are in question, consisting of Lots Nos 101, 238, 280, 281, 307, 313, 354 and 426RP and 1261 of DD 1 as well as Lot No 124 in DD 4 of Mui Wo, Lantau Island.

5.  The late Tang Tin Yau (“Tang Tin Yau”) and Madam Chong were husband and wife.  Tang Tin Yau passed away during the Japanese occupation period.

6.  Shortly after the end of the war, in 1946, Madam Chong purchased Lots Nos 128B, 238, 307, 313 and 354 in DD 1 mentioned above.

7.  On 19 July 1948, Madam Chong succeeded Lots Nos 280, 281 and 426[1] in DD1 from her late husband, as well as (among others) Lots Nos 101 and 1261 in DD 1 and Lot No 124 in DD 4 from her late father-in-law.

8.  On 8 December 1948, Madam Chong executed an Assignment and transferred the above lots (inherited and purchased) to herself and Tang Yip Sang, nephew of hers and her late husband.  Lot No 128B in DD 1, which is a small lot, was left out of the transfer and does not form part of the subject matter of the present application.  The transfer, according to the assignment, was for consideration of “love and affection”.

9.  Madam Tang Yung and Madam Tang Wah Tai got married in the 1950s.

10.  Madam Chong passed away in 1969.

11.  Tang Yip Sang passed away in 1997.

12.  Madam Tang Yung passed away in 2004.

13.  In 2007, letters of administration in respect of the estate of Tang Yip Sang was granted to Madam Tsang.

14.  In 2008, Madam Tang Wah Tai also applied for grant of administration in respect of the estate of her late mother, Madam Chong (HCAG11538/2008); but none was ever granted.

15.  In 2011-2012, Madam Tsang, through solicitors and as the administratrix of the estate of her late husband, applied to the District Office (“DO”) for succession to the half interest of the lots in question registered in the name of Madam Chong.  The DO refused to entertain the application.  Hence these proceedings.

16.  The correspondence between the DO and Madam Tsang’s solicitors shows that in the present proceedings, she is relying on evidence and advancing arguments already rehearsed before the DO.  Whilst the present application is uncontested, the reply from the DO, which was said to be based on legal advice, may serve as devil’s argument.

17.  Besides herself, Madam Tsang also relies on the evidence of Professor Hugh Baker, expert on the applicability and application of Chinese law and custom in respect of the succession to the estate of Madam Chong.

DISCUSSION

18.  Madam Tsang seeks a declaration that the estate of Tang Yip Sang is entitled to (the other) half interest in the lots in question (ie, except Lot No 128B in DD 1 as explained above) in succession to the late Madam Chong according to section 17 of the NTO.

19.  Section 17 of the NTO reads:

“In the event of the death of any person in whose name any land is registered otherwise than as a manager, if no grant of probate or administration of the estate of the deceased is made by the High Court within 3 months after such death, the Land Officer, on ascertaining the name of the person who is entitled to such land in succession to the deceased person (hereinafter called the successor) and on being satisfied that any estate duty which may due has been paid, shall register the name of the successor, and upon such registration being effected the said land shall vest in the successor for all the estate and interest of the deceased person therein, or for such estate and interest as shall be entered on the register by the Land Officer against the entry of the name of successor. On the registration of a successor, the fees fixed by regulations shall be paid to the Land Officer by the successor, but no probate fees shall be payable, anything in the Probate and Administration Ordinance to the contrary notwithstanding. The registered successor shall be liable for the debts of the deceased in the same manner and to the same extent as if a grant of probate or administration had been made to him:

Provided that if a grant of probate or administration of the estate of the deceased is made by the High Court within the period above specified, the grantee therein named shall be registered as the successor and the fees referred to in this section shall not be payable.”

20.  The above section was repealed by the New Territories (Exemption) Ordinance, Cap 452 (“NTEO”) in 1994.  By virtue of the transition provision (section 12), the repealed section remains applicable to land in the New Territories owned by a person demised before 1994.  This is however subject to section 3 of the NTEO, which exempts all non-rural lands or rural lands exempted by the Chief Executive from the application of the ordinance.

21.  In question are rural lands.  There is no evidence of exemption by the Chief Executive under section 3 of the NTEO.  Madam Chong passed away in 1969, and thus prior to 1994 and the enactment of the Intestates’ Estates Ordinance, Cap 73 (“IEO”).  As mentioned, grant in respect of Madam Chong’s estate was applied for in 2008 but none has ever been granted.

22.  In the circumstances, for the purpose of section 17 of the NTO, the remaining question is whether Tang Yip Sang was entitled to succession to the estate of Madam Chong.  This is what Madam Tsang has to establish which, her counsel, Mr Tang, submits, should be governed by Chinese law and custom.  I accept that.  Similar proposition was accepted in similar circumstances in Liu Ying Lan v Liu Tung Yiu & Anor [2003] 3 HLRD 249[2] (at §13(1); 16-17).

23.  With reference to Professor Baker’s expert evidence, Mr Tang also makes the following points in his submission:

(1) Chinese law and custom means the Qing Code in force and custom in this part of China in 1843 as varied by local legislation and custom.

(2) Under Chinese law and custom, generally only males have the right to succeed.

(3) When there is no son to succeed, articles 78(1) and 78(2) of the Qing Code come into play.  The former deals with the appointment of a successor while the man is alive.  The latter deals with the appointment of a successor by the widow (after the man has died).

(4) In either case, the appointed successor must be a male of the next generation of the same kindred according to specified rank in priority.  This starts with the descendant from the nearest common ancestor such as nephew[3].

(5) Daughters are entitled to maintenance while unmarried and dowry upon marriage.  Subject to article 88(2), daughters married prior to the death of the father have no entitlement to the estate.

24.  Similar understanding of the applicable Chinese law and custom was expressed in Liu Ying Lan at §18.

25.  The case of Madam Tsang is this:

(1) Tang Yip Sang was the appointed successor to the estate of Madam Chong (and thus what she succeeded from her late husband and father in law) in 1948.

(2) Alternatively, even assuming there was no such appointment, Tang Yip Sang is in any event the only person entitled to succeed to the estate in the circumstances.

26.  Whether Tang Yip Sang was the appointed successor of Madam Chong is a question of fact and evidence.

27.  It is submitted on behalf of Madam Tsang that the appointment of Tang Yip Sang as the successor to her estate was manifested by the 1948 assignment of the lots in question to herself and Tang Yip Sang. This, it is argued, was in conformity with article 78(2) of the Qing Code.

28.  Article 78(2) of the Qing Code provided that a widow left with no son and did not remarry should be entitled to her late husband’s share of the family property.  It should rest with the elders of the family to select the proper relative and to appoint the successor.  In Liu Ying Lan (at §18(8)), it was accepted that the elders effectively served as witnesses rather than dictating who the successor should be for the widow.

29.  As to the evidence, according to Madam Tsang, Tang Yip Sang dutifully looked after Tang Tin Yau’s tomb throughout his lifetime.  She and Tang Yip Sang had also farmed the lots after Madam Chong’s demise in 1969. That lasted until Tang Yip Sang passed away in 1997.  As mentioned above, Madam Tang Wah Tai applied for grant in respect of Madam Chong’s estate in 2008.  However the parties were told that the succession to Madam Chong’s estate should be governed by Chinese law and custom.  Expert opinion from Professor Baker was therefore sought and the late Tang Yip Sang was found to be the one entitled to succession.  Upon that, the parties were minded to enter into an agreement to give effect to the customary succession; but Wan On eventually declined to do so.  Hence the present proceedings.

30.  Madam Tsang fairly claims no contemporaneous knowledge about the appointment, as she was married to Tang Yip Sang only after the 1948 assignment.  But she asks the court to draw inference from the following circumstances:

(1) Tang Yip Sang was the nephew of Tang Tin Yau and the only male of the next generation of the same family line at the time.  This is supported by Professor Baker’s interpretation of the family tree as verified by the village representative.

(2) The timing of the 1948 transfer was consistent with the intention to make Tang Yip Sang the successor.  As mentioned, Tang Tin Yau passed away during the war.  Soon after the war, Madam Chong purchased some of the lots.  In her situation then, Madam Chong was believed to be able to do so only by using her late husband’s estate monies, which I accept.  She subsequently succeeded to the estate of Tang Tin Yau and Tang Tin Yau’s father. The assignment to Tang Yip Sang of the lots followed in the same year.

(3) The assignment was made to Tang Yip Sang for “love and affection”[4]. Nevertheless the nature of such arrangement being a gift is doubted, particular in view of the fact that Madam Chong had 2 unmarried daughters by then.  Further, unlike gift of specific lots, the assignment took the form of a wholesome transfer of all the lots (save and except one) to herself and Tang Yip Sang.

31.  Mr Tang submits that in the above circumstances, the 1948 assignment was effectively a halfway succession in that Madam Cheung delayed the full succession and retained interest in the land for her own maintenance during her lifetime and widowhood.  This, according to Professor Baker, was in conformity with Chinese law and custom[5].

32.  Professor Baker also expressed the following opinion:

(1) In matters of succession and inheritance, the basic principle was that the family line should not be allowed to die out but should be continued[6].

(2) In terms of agnatic succession, the genealogical information shows that 2 of the 3 branches of the family of common ancestor in the present case have died out, leaving the branch represented by the widow of Tang Yip Sang, ie Madam Chong, at the time.

(3) As mentioned above, the widow in practice had considerable say in the appointment under article 78(2) of Qing Code[7].  In the present case, there were no senior male agnates available and the responsibility for appointing a successor had to fall on Madam Chong.

(4) Whilst there seems to be no means of discovering with absolute certainty the reason for the 1948 assignment, in the light of the genealogical situation mentioned above, there must be a strong assumption or implication that by the 1948 assignment, Madam Chong was taking steps to formalise the succession to Tang Yip Sang as the only eligible successor of the family line.

33.  The DO was specific in that the appointment had to take the form of posthumous adoption of Tang Yip Sang by Tang Tin Yau or Madam Chong for the purpose of succession.

34.  However, the expert also gives the following opinion:

(1) As regards appointment of successor, beyond the fundamental principle to be observed (as mentioned above), the law did not lay down rules or procedures for its implementation; and no documentation was required by the state.

(2) The same would apply to a posthumous appointment by the widow or an appointment of a successor by the elders of a deceased man: these were similar in nature to a gwo gai appointment, the transfer normally (or at least ideally) taking place between lines within the family or clan.

(3) Inheritance in the case of an only natural son, an only appointed successor, or an only posthumously appointed successor was thus ‘automatic’ and required no documentation or negotiation: the son inherited the entirety of his father’s estate, and there need be no questions asked or dispute arises.

(4) Whilst the order in which the search for a successor should be made was laid down in article 78(1) of Qing Code, no course of action was specified in the Code for a situation where there was no elder surviving in the family to supervise family affairs; or where neither the deceased during his lifetime nor after his death his widow or the elders chose to or were able to appoint a successor.

(5) Article 88(2) of Qing Code provided that if a family line became extinct and there was no one in the clan entitled to succeed, natural daughters might take the estate.  As a last resort, the state might forfeit the estate.

(6) However, the alienation of the deceased’s estate from the family line, either through inheritance by a daughter (if he had one) or forfeiture to the state (if he had no daughter), were precisely what the inheritance system, according to the overriding consideration of preservation of the integrity of the agnatic family’s property, was intended to avoid.  As a result, the fallback positions under article 88(2) were only to be taken if there was indeed no one in the whole agnatic clan that should inherit.

(7) The logical conclusion from the above is that in the event of failure to appoint a successor, though an eligible successor exists, it would still have been possible for a successor to be ‘established’ from within the clan.  Such eventuality was not discussed in Qing Code; and there could be no requirement for an appointment ceremony or procedure for establishing such a successor in such case.

(8) In the context of estate of New Territories land, so long as there was available one agnatically related male candidate, no other person would normally have been allowed to succeed; and it would be against the fundamental principle of the relevant law and custom to resort to the fallback positions under article 88(2).

(9) In the circumstances, even if Madam Chong did not actually appoint Tang Yip Sang as the successor, the estate of Tang Tin Yau would in any event pass to him being the nearest collateral branch of Tang Tin Yau’s line and the only eligible branch now represented by the widow of Tang Yip Sang and their descendants in the male line.

35.  The DO disagreed; and argued that Madam Tsang’s proposition is flatly contradicted by the Court of Appeal decision in Liu Ying Lan.

36.  Liu Ying Lan also involved the estate of a deceased villager in the New Territories consisting of a plot of land.  His widow also passed away prior to 1994 and survived by 2 daughters.  The nephew of the deceased claimed that he was entitled to succeed to his late uncle’s estate under section 17 of the NTO on the basis that he was his late uncle’s closest male relative and he was so entitled according to Chinese law and custom.  He also sought to be posthumously adopted by his late uncle, and thus his becoming the successor.  The daughters of the deceased opposed the claim; and claimed to be entitled to inherit their late father’s estate according to article 88(2) of Qing Code.

37.  The Court of Appeal confined themselves to the issues on appeal, namely: (i) whether the nephew was someone entitled to succeed under Qing Code; and (ii) the effect of the Adoption Ordinance on posthumous adoptions under customary law.

38.  In respect of the first issue, Professor Baker, also expert in that case, gave expert evidence on behalf of the nephew at the trial[8]; and accepted that Chinese law and custom generally prohibits one to inherit from both one’s father and uncle.  But there was no culturally viable alternative to the nephew’s entitlement to succeed his late uncle because his late uncle’s household had ceased to exist by reason of his death and the death of his widow.  His property should go to the closest male line of which the deceased was a part and to which the property conceptually belonged, namely, the line of his father.  The nephew, being a part of that male line, should therefore succeed to the deceased.  This was basically similar to the professor’s evidence in the present case. 

39.  DCHJ A Cheung (as he then was) apparently did not accept that as the answer to the general prohibition against succession to both the father and uncle; and found that the nephew was not entitled to succeed to his late uncle’s estate after having succeeded to his own father’s estate.  The appellate court endorsed that in respect of this issue.

40.  The appellate court also ruled that it was no longer possible after the Adoption Ordinance, Cap 290 to have posthumous adoption under Chinese customary law, which was a pre-requisite for those who were entitled to succeed to actually become the successor.  Therefore the nephew also failed in respect of the second issue on appeal.

41.  The appellate court concluded that the daughters in Liu Ying Lan were entitled to succeed pursuant to article 88(2) of Qing Code.

42.  For the following reasons, Mr Tang submits that the present case is different:

(1) Tang Yip Sang is not merely asserting any right as a nephew or to be posthumously adopted to succeed the estate of his late uncle and aunt as in Liu Ying Lan.  It was the conduct of Madam Chong in appointing him the successor way back in 1948, which was permitted under article 78(2) of Qing Code.

(2) In any event, neither daughter of Madam Chong (or in the case of Madam Tang Yung, Wan On representing her estate) came forward to oppose the application or to assert a competing claim.  The appellate court in Liu Ying Lan did not have to consider how the applicable law and custom should decide the question of entitlement to succeed in such a situation.

43.  (1) above turns on the finding of this court as to whether Tang Yip Sang was in fact appointed as the successor in 1948.  The DO probably should not be faulted in expecting substantive evidence in support of the alleged appointment.  The fact is that little primary facts at the material time are known.  Those acting for Madam Tsang, to certain degree, are stretching the limit of rather little circumstantial evidence.  I should therefore exercise caution in differentiating speculation from inference, the latter only to be drawn from established facts.

44.  While Madam Tsang fairly claims no personal contemporaneous knowledge about the 1948 assignment, there is not even hearsay evidence from her as to what she came to understand from either her late husband or Madam Chong about the intention of Madam Chong behind the assignment.  When administration in respect of the estate of Tang Yip Sang was applied for, which was also granted, there was no indication in the application of any alleged entitlement to the half interest registered in the name of Madam Chong by virtue of his position as successor.  Judging from what Madam Tsang deposed to, the understanding that her late husband was entitled to the succession came about only after obtaining expert evidence subsequent to Madam Tang Wah Tai’s failure to obtain grant in respect of Madam Chong’s estate. Based on the evidence, one cannot help wondering whether Tang Yip Sang was understood by the daughters of Madam Chong or Madam Tsang to be the successor until the expert’s advice mentioned above.

45.  The proposition is that the 1948 assignment was the manifestation of appointment of Tang Yip Sang as the successor by Madam Chong.  Considering the known facts prevailing at the time of the assignment and the lack of contrary contention (which Madam Tang Yung and Madam Tang Wah Tai could have asserted ever since their mother’s passing or, at the latest, in the present proceedings), I would put the proposition as a probable fact.

46.  (2) above has to do with what the court said in Official Solicitor v The Luk Hoi Tong Co Ltd, HCA 1348/2000 (16 September 2005).  2 actions were tried together there: a High Court action whereby L, the administrator of the estate of the deceased, sought to challenge certain transfer of shares belonging to the estate to W after the deceased’s death; and a probate action whereby the son of W sought revocation of the grant to L on the ground that L was not the adopted son of the deceased.  A Cheung J (as he then was), who was also the trial judge in Liu Ying Lan, tried the case.

47.  In the Luk Hoi Tung Co Ltd case, the deceased passed away in Hong Kong in 1940 without leaving a will.  Succession to his estate was, as per the succession law in Hong Kong, governed by Chinese law and custom.  If L was adopted by the deceased as his son, he (as the only formally adopted son) would be entitled to succeed to the entire estate of the deceased according to Chinese law and custom.  Professor Baker, the expert in the present case, was again the expert giving expert evidence on behalf of L in that case.  It was agreed between experts that, among other things, L as a nephew of the deceased was a suitable candidate for adoption.

48.  His lordship found that L’s case on adoption failed on the evidence.  His lordship also found the transfer of shares to W to be null and void.  The question became who should be entitled to succeed to the estate of the deceased in such circumstances.  This was how the Chinese customary law on succession came to be discussed[9].

49.  Pausing here, I notice that the DO considered that the judgment in Luk Hoi Tung Co Ltd is irrelevant because that was not a case on succession pursuant to section 17 of the NTO.  I disagree.  It is the right to succeed that requires to be decided in accordance with Chinese law and custom.  Section 17 of the NTO or pre-IEO intestacy is merely window through which such Chinese law and custom enter into the consideration for the same purpose.

50.  Back to that case, A Cheung J recorded in the judgment that the experts agreed that if a husband died without leaving any male issue (natural or adopted), his widow would be entitled to appoint or adopt an heir or successor to continue the male line.  The widow enjoyed a limited interest and use of the assets during her lifetime and widowhood.  The disagreement between the experts lied in the situation where the widow for one reason or the other did not appoint an heir or successor.  Professor Baker took the view that after her death, the estate would go to the male next-of-kin of the deceased husband of the next generation.  That was similar to the opinion expressed by Professor Baker in Liu Ying Lan and the present case (assuming that Madam Chong did not appoint Tang Yip Sang as the successor).

51.  His lordship preferred the above opinion of Professor Baker; and had this to say:

“167. At this juncture, it is convenient to point out that the experts on both sides agreed that notwithstanding my first instance decision in Liu Ying Lan v Liu Tung Tiu, HCA 6693/1992 (8 May 2002) and the Court of Appeal’s decision in that case ([2003] 3 HKLRD 249), where a deceased person was survived by a widow without any sons (adopted or not) or daughters, and if his widow died without having appointed or adopted any heir or successor during her lifetime (or “gifted” away the assets to someone else – as per Mr Hui’s contention) the estate would go to the dead man’s closest male nest-of-kin of the next generation, even in the absence of any adoption of the next-of-kin. A distinction between that situation and the situation faced by the courts in Liu Ying Lan is that in the latter case, it was a competition between the deceased’s daughters and the nephew, who was never adopted into the family of the deceased. Here, there is no such competition between a daughter and a nephew. If anything, it is a (potential) competition between the nephew and the government. As has been pointed out by Jamieson, Chinese Family and Commercial Law, 30, the forfeiture of the estate to the government is perhaps never insisted upon as against relations of any kind. Furthermore, the relevant Qing Code, ie article 88(2) providing for forfeiture of the property to the government, apparently provides for a discretion whether to forfeit (“酌撥充公”).

168. In the circumstances of the present case and based on the expert evidence before me, I see no reason why in the absence of a valid adoption of CS Lee, and upon my rejection of the defence of gift raised by Madam Wong, the estate of the deceased should not be succeeded to by Yat Sun (and his family) and CS Lee (and his family).”

52.  In the present case, Tang Yip Sang was the only male next-of-kin one generation down the agnatic line entitled to succeed.  Tang Tin Yau and Madam Chong were survived by 2 daughters.  Whilst neither of them has (formally) renounced their potential entitlement under article 88(2) of Qing Code, the expert opinion in the present case is that succession by daughters married out of the family, in view of an existing eligible male successor, would contradict the fundamental principle of preservation of the family property belonging to the male line under Chinese law and custom.  In any event, both of them have been served with these proceedings, and neither of them comes forward to assert the right to succeed in preference to that of Tang Yip Sang.  The reality is no different from the situation observed by the learned judge in Luk Hoi Tung Co Ltd above.  Such situation was not the one faced by the appellate court in Liu Ying Lan, a decision that the learned judge in Luk Hoi Tung Co Ltd was acutely aware of when arriving at his conclusion.

53.  In the circumstances, whilst I have reservation about finding that Madam Chong in fact appointed Tang Yip Sang as the successor in 1948, I accept that that even without such appointment, Tang Yip Sang was the only male and person who was entitled to succeed to the estate under Chinese law and custom.

CONCLUSION

54.  In the circumstances, I grant the declaration sought.  As requested, I make no order as to costs.

[1] Which was partially resumed by the Government in 1995 and became Lot No 426Remaining Portion (RP).

[2] The expert in the present case, Professor Hugh Baker, also gave expert evidence on the relevant Chinese law and custom on behalf of the nephew in Liu Ying Lan.

[3] See Jamieson, Chinese Family Law and Commercial Law at pp.13-14.

[4] Professor Baker observes that description of consideration of this kind may not always have reflected actuality; and there seems to be no means of discovering with absolute certainty the reasons for such transfer at the time.

[5] See also Official Solicitor v The Luk Hoi Tung Co Ltd, unrep, HCA 1348/2000 (16 September 2005) at §138.

[6] Jamieson (at p.3) described that as of paramount importance.

[7] See Jamieson at pp.20; 26.

[8] See the judgment at §24.

[9] From §138 onwards.