ERIC EDWARD HOTUNG v. HO YUEN KI AND OTHERS

ERIC EDWARD HOTUNG v. HO YUEN KI AND OTHERS

The court found the plaintiff failed to prove on the balance of probabilities that he had communicated and established an intention to reserve an express power of revocation or the other pleaded conditions; transfers/allotments were intended to create trusts for the children (no resulting trust in the plaintiff except in respect of one pre-existing HEL share), so LARCO s6(1)(c) did not invalidate the written declarations; accordingly the rectification/mistake claim failed and the plaintiff's claim was dismissed save for a declaration that the 1st defendant holds one HEL share on trust for the plaintiff.

Citation
ERIC EDWARD HOTUNG v. HO YUEN KI AND OTHERS
Parties
Plaintiff: Eric Edward Hotung; 1st Defendant: Ho Yuen Ki; 2nd Defendant: Anthony Eric Ryan Hotung; 3rd Defendant: Sean Eric McLean Hotung; 4th Defendant: Hillhead Limited; 5th Defendant: Sheridan Patricia Hotung Shea; 6th Defendant: Gabrielle Marie Hotung
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
4 March 2005
Case Number
HCMP2820/2002
Procedural Posture
Trusts; Rectification; Declaration of Interest in Company Shares / Judgment (trial, Court of First Instance)
Outcome
Plaintiff's principal claims dismissed; declaration that 1st defendant holds one share in Hotung Enterprises Limited on trust for the plaintiff
Legal Topics
Revocability of Trusts, Resulting Trust, Rectification of Instruments, Secret Trusts, Disposition of Equitable Interests (larco S6(1)(c)), Blank Instruments of Transfer
Source Language
EN
Trusts Equity Property Law Company Law Civil Procedure Revocability of Trusts Resulting Trust Rectification of Instruments +3 more

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Parties

Eric Edward Hotung

Plaintiff

Ho Yuen Ki

1st Defendant

Anthony Eric Ryan Hotung

2nd Defendant

Sean Eric McLean Hotung

3rd Defendant

Hillhead Limited

4th Defendant

Sheridan Patricia Hotung Shea

5th Defendant

Gabrielle Marie Hotung

6th Defendant

Procedural Posture

Trusts; Rectification; Declaration of Interest in Company Shares / Judgment (trial, Court of First Instance)

Legal Issues

  1. 1 Whether the settlor intended the declarations of trust to be subject to conditions including an express power of revocation
  2. 2 Whether the declarations of trust should be rectified or set aside for mistake or because they do not reflect the settlor's intention
  3. 3 Whether a resulting trust arose on the transfers/allotments such that section 6(1)(c) LARCO required writing and invalidated the dispositions

Ratio Decidendi

The court found the plaintiff failed to prove on the balance of probabilities that he had communicated and established an intention to reserve an express power of revocation or the other pleaded conditions; transfers/allotments were intended to create trusts for the children (no resulting trust in the plaintiff except in respect of one pre-existing HEL share), so LARCO s6(1)(c) did not invalidate the written declarations; accordingly the rectification/mistake claim failed and the plaintiff's claim was dismissed save for a declaration that the 1st defendant holds one HEL share on trust for the plaintiff.

Court Disposition

Plaintiff's principal claims dismissed; declaration that 1st defendant holds one share in Hotung Enterprises Limited on trust for the plaintiff

Orders

  • Plaintiff's claims dismissed except declaration that 1st defendant holds one HEL share on trust for the plaintiff absolutely
  • Parties to file written submissions on costs within 21 days; if a hearing on costs is required parties to fix date promptly