Trust Law — Court of First Instance grants declarations of sole beneficial ownership over valuables stored in safe deposit box in joint title
Trust Law
Background
In 2008, tragedy struck the life of the 1st Plaintiff when her late husband passed away, leaving her as the sole caretaker of two young children aged 11 and 13. Recognizing the unpredictability of life, she sought the assistance of her brother, the Bankrupt, to jointly hold a safe deposit box (“the Deposit Box”). This arrangement was intended to ensure that if unforeseen events were to occur, such as her sudden passing or incapacitation, her brother could access the contents of the Deposit Box and return the same to her children.
However, in November 2020, an unexpected turn of events took place. The Bankrupt was declared bankrupt, and as a consequence, the Deposit Box was frozen due to the Bankrupt’s failure to disclose it to the trustees-in-bankruptcy. The 1st Plaintiff only became aware of the frozen status when she attempted to access the Deposit Box.
This case centered on the true ownership of the valuables stored within the Deposit Box – which included watches, jewelry, and cash worth over HK$3 million. The 1st and 2nd Plaintiffs maintained that these valuables exclusively belonged to them and held nothing in common with the Bankrupt.
The 1st and 2nd Plaintiffs had the burden of rebutting the legal presumption that the contents of the Deposit Box are owned by the co-owners jointly, whilst facing opposition from the trustees-in-bankruptcy, responsible for managing the Bankrupt’s estate.
The Court’s Decision
The Court meticulously scrutinized the circumstances surrounding the joint opening of the Deposit Box, and the documentary evidence presented by both parties. The credibility of all involved was weighed, including not only the 1st and 2nd Plaintiffs but also the Bankrupt, against a wide range of issues – from personal backgrounds to spending patterns, and the management of personal and financial affairs.
The Court dismissed the concerns raised by the trustees-in-bankruptcy and found the evidence presented by the 1st and 2nd Plaintiffs to be compelling and sufficient.
Remarkably, unlike previous cases of a similar nature, the Court held that the 1st and 2nd Plaintiffs should not be liable for costs, as they have done nothing wrong in setting up and maintaining with the Deposit Box as a trust arrangement. The Court acknowledged their plight, remarking that it was regrettable that they had to incur legal costs to reclaim their possessions. The Court further that their conduct in the proceedings did not warrant any adverse costs order.
Equally, the trustees-in-bankruptcy’s stance was not deemed unreasonable, as they were acting within their bounds. After careful consideration of all aspects, the Court concluded that it was appropriate to make no order as to the costs of the action.
| Ted Chan
Ted Chan was instructed by Messrs. Edmund W.H. Chow & Co. to present the 1st and 2nd Plaintiffs in Yan Yuen Ching & Anor v. Tan Tsz Kin & Ors [2023] HKCFI 1986. Ted has a broad civil and criminal practice. He has appeared in the High Court, the District Court (including the Family Court) and the Magistrates’ Court (including the Juvenile Court). He is also a CEDR accredited mediator and has been involved in mediations of a wide variety of disputes, such as matrimonial, nuisance, building management, contract, etc. Find out more from Ted’s profile. |
This article was first published on 16 August 2023.
Disclaimer: This article does not constitute legal advice and seeks to set out the general principles of the law. Detailed advice should therefore be sought from a legal professional relating to the individual merits and facts of a particular case. The photograph which appears in this article is included for decorative purposes only and should not be taken as a depiction of any matter to which the case is related.