"Il faut épater les bourgeois."

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Tam Mei Kam v HSBC International Trustee Limited (16 June 2008)

In an even-handed and responsible judgment, the Hon Cheung J carefully set out the medical and witness evidence and the legal arguments put forward on behalf of the plaintiff, mother to the famous singer, Anita Mui (梅艷芳). The plaintiff challenged the will executed by the deceased on 3 December 2003 in a hospital and a trust (Karen Trust) set out thereby. HSBC International Trustee Limited, the trustee and executor of the will, was the 1st and 2nd defendant in its respective capacity.

By way of background and a short chronology, the deceased announced in a press conference in September 2003 that she was suffering from cervical cancer. Notwithstanding the illness, she then held a series of eight concerts at Hong Kong Coliseum in November 2003 and after the concerts, flew to Japan to shoot a television commercial. Immediately upon her return to Hong Kong on 27 November, she was admitted to Hong Kong Sanatorium & Hospital. She did not recovered and passed away on 30 December 2003, to the shock and sorrow of her worldwide fans.

The trust provided for a monthly allowance of HK$70,000 for the plaintiff (so that she could enjoy the same comfort while she was alive, typified by the provision of 2 maids and a chauffeur, on top of the use of the flat in Happy Valley) and education allowance for certain nieces and nephews. Two properties, one in Happy Valley and another in London were given to a Mr. Eddie Lau, better known in his Chinese alias “劉培基”, a well-known image and costume designer who had worked with the deceased since the early 1980s and “was like an elder brother to the deceased”. The third defendant, the New Horizon Buddhist Association Limited, a charity promulgating the Tibetan Buddhist faith, is named as the final repository.

The name of the trust probably came from the deceased's less well-known name in Chinese, “何加男” (which sounds a bit like “Karen” in Cantonese), by reason of her relationship as the goddaughter of Mrs Ho and her late husband, Mr Ho Koon-cheung (何冠昌) – a co-founder of Golden Harvest (嘉禾), a well-known movie production and distribution company.

The plaintiff could not accept the contents of the will and the trust arrangement, and commenced the probate action (in 2004). The question the judge had to decide was whether the deceased had the requisite mental capacity, in terms of the test laid down in Banks v Goodfellow, to execute the will and the trust documents.

The classic definition of testamentary capacity, in terms of having a sound disposing mind, was given by Cockburn CJ in Banks v Goodfellow (1870) LR 5 QB 549, 565 - 566 :

“...that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties – that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made...”

The main argument put forward on behalf of the plaintiff was that the deceased had not been sufficiently advised and did not sufficiently know and approve of the contents of the will.

Judgment

The judge very carefully set out the medical evidence and the witness evidence, mainly those of Dr. Teo (the doctor who treated the deceased), a Mrs. Ho (godmother to the deceased) and Mrs. Lau, the HSBC representative who took instruction from the deceased in preparing the will and setting up the trust and attended to the deceased's execution of these documents.

The judge also had this to say about the witness Mrs. Ho:

“The deceased was very close to her and she treated the deceased as her daughter. She was by her side and with her throughout her illness. She visited and stayed with the deceased at the hospital every day. She was in close and daily contact with the deceased. If there was any abnormality in the deceased in terms of her intelligence, mental condition or behaviour, she would have been the first one to notice...Mrs Ho, who is obviously a person with experience in life, was adamant that the deceased was of sound mind and capacity at the time. Her opinion is entitled to great weight as well.”

and that

“She has nothing to gain from the litigation and there is no motive for her to lie regarding what has happened.”

The judge accept the evidence given by these witnesses and held that the trust deed and all related documents were duly executed by the deceased on 3 December 2003. The judge was satisfied that the deceased had the mental capacity and demonstrate the understanding of the contents of the documents executed. In particular, the judge accepted the evidence that:

• When Mrs. Lau saw the deceased for the second time the deceased was in very good spirit, was relaxed and smart/sharp (“眼仔靈靈”).
• The deceased was precise when it came to money, could remember HSBC's fees structure and also asked questions about trustee power. In particular, she remarked that the trustee was having a very good bargain (“好着數”) under the trust deed

The judge also rejected the submission of the plaintiff's counsel that Mrs. Lau was confused about and as a result “frustrating” the deceased's true intentions in the will and under the trust.

“Depending on one's perspective, Mr Chan's argument can either be described as ingenuous or desperate. In any event, I have no hesitation in rejecting it. It is an argument that essentially turns on facts, and the facts do not support Mr Chan's argument.”

The judge was also not convinced that the so-called “rule against delegation of testamentary” power based on an Australian High Court case should be applied in Hong Kong, in view of the position in e.g. England and Canada.

Other legal arguments put forward by the plaintiff's counsel (and disposed of by the judge) include “half-secret trust, sham agreement, mistake, timing of execution by the trustee, the second rule in Barry v Butlin, uncertainty and administrative workability.