Court of Final Appeal Deems Hong Kong Family Foundation a Trustee
On May 18, 2015, the Court of Final Appeal in Hong Kong, in Final Appeal No. 9 of 2014, made the final
judgement concerning the will and ensuing legacy of Nina Wang, who, before her death in 2007, was
Asia’s richest woman. The value of the assets involved in the estate is approximately US $4.2 billion. The
Court considered whether the Wang family-led Chinachem Charitable Foundation Ltd. (the “Foundation”) was a beneficiary under Ms. Wang’s will and could use the properties bequeathed to it as an absolute gift, or whether the Foundation was a trustee and must use the properties in accordance with the directions in the will. The Court held that the Foundation was a trustee, in the process limiting its ability to freely use the funds. The appeal was delayed by five years due to protracted contentious probate proceedings arising out of the allegation that Ms. Wang’s 2002 will was superseded by another will made in 2006 in favour of her personal feng shui consultant, Tony Chan.
The facts are interesting. In 2002, Ms. Wang executed a “homemade” will with the help of her sister but
no lawyer. In Clause 1 of her will, Ms. Wang set out that “All of my properties shall be bequeathed to [the
Foundation].” Clause 2 states as follows: “[1] I wish to entrust [the Foundation] to the supervision of a
managing organization jointly formed by the Secretary General of the United Nations; the Premier of the
PRC Government as well as the Chief Executive of the Hong Kong Special Administrative Region. [2]
Under its supervision, [i] not only must [the Foundation] continue all the projects which it has undertaken
since its establishment to enable their developments continuously, but [ii] it must also continue to achieve
the purpose of setting up a fund and a Chinese prize of worldwide significance similar to that of the Nobel
Prize.”
In order to interpret the role of the supervisory body referred to in Clause 2(1) of the will, the Court
considered whether the language was imperative and sufficiently clear in depicting Ms. Wang’s intentions.
It also attempted to read the will in context and as a whole. After referring to a line of relevant case law,
including UK and Canada cases, the Court concluded that the “most appropriate legal terms [to apply to
the will] are those that most naturally and simply give effect to Nina’s intentions.” It therefore held that
Clause 2(1) was only precatory and that the “correct interpretation of Clause 2(2) is that it imposes a trust
for charitable purposes.”
After determining that the Foundation was a trustee, the Court concluded that establishing a “managing
organization,” as referred to in Clause 2(1), was within the inherent jurisdiction of the courts’ schememaking power over the administration of charitable trusts because “there is a strong public interest in this
important benefaction having a clear and sounder legal basis than the language of Nina’s home-made
will.” The Court recommended that a scheme allowing for the administration of the charitable trust in Ms.
Wang’s will be prepared and submitted to the High Court for approval.
This case illustrates the importance in drafting a clear will, particularly when the will involves a large
donation, in order to ensure that the wishes of the testator are met. Although this case is in a different jurisdiction, it is interesting to see how the legal principles involving special purpose charitable trusts in the context of an estate gift to a charity are interpreted based on cases in the Commonwealth.