HSBC Trustee (CI) Ltd v Siu Hing Kwong

CourtRoyal Court
JudgeSir Michael Birt,Jurats Grime,Sparrow
Judgment Date06 March 2018
Neutral Citation[2018] JRC 51A
Date06 March 2018

[2018] JRC 51A

Royal Court



Sir Michael Birt, Commissioner, and Jurats Grime and Sparrow.

In the Matter of the KSH no. 4 Trust, the KSH no. 5 Trust, the KSH No. 6 Trust and the GK and JK Trust

HSBC Trustee (CI) Limited
(1) Siu Hing Kwong
(2) Walter Ping Sheung Kwok (on his own behalf and as representative of his unborn issue)
(3) Thomas Ping Kwong Kwok (on his own behalf and as representative of his unborn issue)
(4) Adam Kai Fai Kwok
(5) Kimberly Hew Chee Kwok
(6) Dominic Kai Kuan Kwok
(7) Raymond Ping Luen Kwok (on his own behalf and as representative of his unborn issue)
(8) Edward Ho Lai Kwok
(9) Joyce Kwok
(10) Christopher Kai Wang Kwok
(11) Geoffrey Kai Chun Kwok (on his own behalf and as representative of his unborn issue)
(12) Jonathan Kai Ho Kwok (on his own behalf and as representative of his unborn issue)
(13) Lesley Wai San Kwok (on her own behalf and as representative of her unborn issue)

Advocate N. A. K. Williams for the Representor.

Advocate J. D. Kelleher for the First Respondent.

Advocate N-L. M. Langlois for the Second Respondent.

Advocate J. M. P. Gleeson for the Third to Sixth Respondents.

Advocate S. J. Alexander for the Seventh to Tenth Respondents.

The Eleventh, Twelfth and Thirteenth Respondents did not appear and were not represented.


HSBC Trustee CI v Kwong [2017] JRC 214A .

R v Legal Aid Board ex p Kaim Todner (a firm) [1999] QB 966 at 977.

The Fabric of English Civil Justice.

Jersey Evening Post Limited v Al Thani [2002] JLR 542 .

Scott v Scott [1913] AC 417 .

L v L [2016] 1 WLR 1259 .

Trusts (Jersey) Law 1984.

In the matter of M and Other Trusts [2012] JRC 127 .

The C Trust [2010] JRC 001 .

H v News Group Newspapers Limited [2011] 1 WLR 1645 .

Re S Settlement 2001/154 .

Civil Procedure Rules.

Re Delphi Trust Limited 16 ITELR 885 .

Re The G Trusts [2017/371] .

Re Trusts of X Charity [2003] 1 WLR 2751 .

3 Individual Present Professional Trustees of 2 Trusts v An Infant Prospective Beneficiary [2007] EWHC 1922 (Ch) .

V v T [2014] EWHC 3432 (Ch)

MN v OP [2 March 2017 unreported].

Re Esteem [1995] JLR 266 .

Re Bhandher [1998/152] .

Civil Procedure 2017 Vol. 1.

PJS v News Group Newspapers Limited [2016] UKSC 26 .

Blunkett v Quinn [2004] EWHC 2816 (Fam) .

Appleton v Gallagher [2015] EWHC 2689 (Fam)

Trust — reasons for the publication of 15th December 2017 judgment


On 15 th December, 2017, the Court issued a judgment HSBC Trustee CI v Kwong [2017] JRC 214A (“the Judgment”) giving its blessing to a decision which the Representor (“the Trustee”) proposed to take in respect of four trusts governed by Jersey law (“the Trusts”). We were informed that the Second Respondent (“Walter”) is appealing against the Judgment and the matter is due to come before the Court of Appeal in May.


An issue has arisen as to whether the Judgment should be published. In the ordinary way, although the hearing was in private, it would be published in anonymised form. However, as described below, the parties agree that it is not possible in this particular case effectively to anonymise the Judgment. Accordingly, the choice is between not publishing the Judgment at all or publishing it as delivered including identification of the parties.


It is that matter which we consider in this judgment. Words and expressions defined in the Judgment have the same meaning in this judgment.


The background is fully described in the Judgment. In short, the family has considerable wealth. Some is reflected in shares in a Hong Kong company referred to in the Judgment as “the Main Company” or “SHKP”. The family also has interests in other assets and the Judgment is concerned only with such other assets.


The Trusts were established in 2009 by the First Respondent (“the settlor”). She and her late husband had three sons, namely Walter, the Third Respondent (“Thomas”) and the Seventh Respondent (“Raymond”). Each of the sons also has children.


The general approach to distribution of the family wealth has been that 55% should be held for the settlor and 15% for each of the families of Walter, Thomas and Raymond. The settlor has indicated that upon her death, she would wish the 55% to be distributed equally between the three branches of the family. Much of the family wealth is held in trusts.


Difficulties have arisen between Walter and his two brothers. An agreement was reached in a document known as the Heads of Agreement (and defined at paragraph 12(v) below) dated 27th January, 2014 whereby it was agreed that 15% of what was described as the “Family Assets” should be paid to a trust which would be for the benefit of Walter and his family and certain properties were specified for allocation to that trust as part of that 15%. There was provision for a top up if the specified properties came to less than 15% of the Family Assets.


In the circumstances described in the Judgment, it has not so far proved possible to give effect to this part of the HOA. Accordingly the settlor has requested the Trustee to make various distributions. Her request refers to the assets of the Trusts and certain Canadian assets (together “the Relevant Assets”) and has requested the Trustee to distribute 15% of the Relevant Assets to trusts for the benefit of Walter, Thomas and Raymond (and their families) respectively. The request also specified certain assets to be allocated for the benefit of each of Walter, Thomas and Raymond. Those to be allocated for Walter comprised the assets allocated to him in the HOA.


Having considered the matter and instructed its own financial experts, the Trustee has decided that it will accede to the settlor's request. Thus it will distribute the specified assets to trusts for the benefit of Walter, Thomas and Raymond (and their families) respectively and there will be top up payments so that each branch receives 15% of the Relevant Assets.


Because Walter did not agree to its proposal, the Trustee sought the Court's blessing on the basis that the decision to make the proposed distributions amounted to a momentous decision. The Court heard the matter over three days. The settlor, Thomas and Raymond all supported the Trustee's decision whereas Walter opposed it on various grounds which are set out in the Judgment.


Ultimately, for the reasons set out in the Judgment, the Court gave its blessing to the proposed distributions.


The family has a high profile in Hong Kong. There is regular media coverage of their activities. In particular, despite the fact that the present proceedings were held in private, the Hong Kong media are already aware of many details in connection with the Trustee's application and have published information about the application. We have been shown extracts from newspaper reports in Hong Kong. We do not propose to repeat all that is contained in that coverage but it includes the following matters:-

  • (i) details of the creation of the Trusts by the settlor and the beneficiaries of those four trusts;

  • (ii) the 55/15/15/15% division of assets following the death of the Father;

  • (iii) the fact that the Trusts are concerned only with private assets, not with shares in SHKP;

  • (iv) that there are four holding companies (which are named) and that the underlying assets comprise some 300 companies, with the current percentage holding of each of the Trusts in the holding companies being described;

  • (v) that in 2013 Walter issued a draft writ of summons against the principal members of his family and that agreement was then reached in the Heads of Agreement (“HOA”) dated 27 th January 2014;

  • (vi) that under the HOA Walter agreed to accept a one-off distribution of 15% of the Family Assets and that he had chosen certain US assets (some of which were named) and the Holiday Inn Express in Hong Kong, all of which were to be held in a new private assets trust;

  • (vii) because conflicts between the principal members of the family had not been resolved, the Trustee (which was named) had sought directions from this Court, that the hearing lasted for three days commencing 9 th August 2017 and that various lawyers had been instructed (their names being specified). The report also contained a picture of the Royal Court building and of the Commissioner;

  • (viii) details of the properties to be allocated to Thomas and Raymond, although it was erroneously suggested that this had occurred already;

  • (ix) details of the grounds upon which Walter was opposing what was proposed, including the fact that property prices in Hong Kong had risen by nearly 30% which would result in unfairness to him (because he had taken US properties), that the 15% distribution should be based on a current valuation, that he did not accept the accuracy of the reports of the property valuer and accountants selected by the settlor, that his consent was needed before properties could be allocated to Thomas or Raymond, his suggestion that, at her advanced age, the settlor would not know how to distribute the trust funds and that accordingly was acting under the influence of someone behind the scenes; and that the total value of the Family Assets had to be re-assessed; and

  • (x) that litigation in Hong Kong could not be ruled out if Walter's demands were rejected by the Court.


There are a number of inaccuracies in the reports. These include:-

  • (i) It is suggested that Walter is seeking to overturn the HOA whereas in fact his complaint is that the Trustee is not fulfilling the HOA and that the principal family members have not complied with their obligations under the HOA.

  • (ii) It is said erroneously that Walter is claiming a difference initially estimated at approximately HK$7 billion.

  • (iii) There is an implication in one of the reports that it was...

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