Update | Court rules Nina Wang intended her foundation to hold fortune as a trustee, not beneficiary
Top court rejects attempt to make family-led foundation a beneficiary of Nina Wang’s fortune
Hong Kong's top court has rejected a final attempt by the Chinachem Charitable Foundation to take greater control of tycoon Nina Wang Kung Yu-sum's HK$83 billion estate, ruling the foundation is instead a trustee and must spend the cash only in accordance with her wishes.
The Wang-family-led foundation will not receive any part of her estate as an absolute gift, the Court of Final Appeal decided yesterday. The five judges ruled the foundation and the secretary for justice must come up with a "scheme" to fulfil Wang's last wishes, as spelled out in her will dated July 28, 2002.
The scheme would have two objectives: the establishment of a supervisory body and arrangements for the creation of a Chinese Prize, which will be the equivalent of the Nobel Prize.
The foundation, which is led by the family, lost its appeal against the Court of Appeal's earlier ruling that it was to manage the estate as a trustee, with discretionary power to distribute funds.
Patrick Hamlin, a specialist in trust and succession litigation with international law firm Withers, said that, as a trustee, "the foundation will be subjected to a higher degree of supervision by the court".
Lord Walker of Gestingthorpe said, having considered the effects of the imperative language and specific phrases used in the entire context of the will, it was clear that the will imposed a trust for charitable purposes.
The will said: "I wish to entrust 'Chinachem Charitable Foundation Limited' to the supervision of a managing organisation jointly formed by the Secretary General of the United Nations; the Premier of the PRC Government as well as the Chief Executive of Hong Kong Special Administrative Region."
In the appeal hearing, the court heard that the secretary general replied it was inappropriate for him to take up the role and the premier did not reply.
The judge said the clause was only "precatory" - meaning an expression of a wish - and that Wang regarded a new managing organisation as an important part of her plans for her estate. Accordingly, the court exercised its "inherent jurisdiction" to call for the formation of the supervisory body - made up of "individuals of unquestionable integrity, experience and judgment".
"The Department of Justice will probably draft [the scheme] in consultation with the foundation's lawyers," Hamlin said.
Wang's younger brother Dr Kung Yan-sum, chairman of Chinachem Group, cited a Chinese poem: "Unfazed by honour or insult; unruffled by staying or leaving," to describe his feelings after learning of the verdict.
He said the rulings would not affect the foundation's operation and that the government would agree the estate was for charitable purposes.
A spokesman for the department said it would continue to monitor the administration of the estate, and would liaise with the foundation and the estate's interim administrators on the implementation of Wang's will.