1928-05-04 — Page 3

ADMINISTRATION OF SIR PAUL

CHATER'S WILL.

APPOINTMENT OF MR. J. T. BAGRAM SET ASIDE.

INVESTMENT IN ORDINARY SHARES NOT EMPOWERED.

FULL COURT'S DECISIONS.

Judgments were delivered yesterday morning by the Full.. Court (The Chief Justice, Sir H. Gollan, Sir Peter Grain and Mr. Justice Wood) in the appeal heard in February and March against the decision of Mr. Justice J. R. Wood in connection with the administration of the estate of the late Sir Paul Chater and hia appointment of Mr. J. T. Bagram to the Directorate of the Hong Kong Land Investment and Agency. Co., Ltd."

Both appeals, were dismissed, the Full Court upholding the decision of the Puiane Judge that the appointment of Mr. Bagram was not warranted and, that the codicil of the will of Sir Paul Chater did not give the power to his trustees to iqvest in ordinary shares.

Mr. Bagram's attempt to qualify for the appointment by set ting himself up in business was described as an ingenious way of getting the necessary qualification." His Lordship, however, added that there was no suggestion of sharp practice. Mr. Potter for the appellants said that it was done on the advice of a Home barrister and was not inspired by local counsel. MR. BAGRAM'S APPEAL.

The following is a full text of the judgment in the appeal against the decision of Mr. Justice Wood concerning the appointment of Mr.

THE HONG KONG DAILY PRESS, FRIDAY,

MAY

4th, 1928.

see no reason for thiking that it third place in which it appears. is used in a different senso in the

In clause 5 of his codicil of May MR. JUSTICE WOOD." 5th, 1990, alter reciting the power Mr. Justice Wood states:-I do to appoint a senior representative not adopt the view that the ground of a firm or corporation as per of Mr. Bagram is that the testator's

of the failure of the appointment" corporation, municipal, local, or It has been argued that the words manent and managing director of authority is to be held confined by companies of all kinds; I cannot otherwise" includes incorporated the company he appoints the senior its terms to an appointment by agree with this argument. I am of representative for the time being officin! title of the holders of an opinion that that expression is con- of Messrs. E. D. Sassoon and Co., that the appointment by name of administration or semi-publje char offer in succession. It seems to me fined to corporations of a municipal Ltd., as much director, but subject person who is within the class speci to a condition" with which in viewed will be an effective exercise of fact that special provision is made actor, particularly in view of the of the opinion I hold as to the persona holding the requisite quali-debentures, debenture stock, bonds, the power. That class consists of in clause 20 for investment in construction of the Memorandum Ecations at the time of the testator's mottages of railway or other of Association of the company, it death, I dffirm my judgment given companies incorporated and carry

in the court below

ing on business in the United King- dom and other places

Stocks and Shares.

is not necessary to deal. Then the clause goes

to provide that if... Home Counsel's Advice, Messrs. E. D.. Sassoon and Co., Mr. Potter said he would like Ltd.. do not full this condition, to state, in fairness to Jr. Bagram, be, if he "legally can do so

In the next placa it was argued points Sir Robert Ho Tung, by Hong Kong Finance and Invest should be interred from the pre- ap-with regard to the formation of the that a power to invest in shares name; but if Sir Robert Ho Tung ment Co., Ltd., which had quite sence of the word "stock" in the also does not fulfil the condition, properly been consented upon closing part of clause 20. In the he (the testator), if he legally that it was not formed by Mr. clause which we are considering the can do so appoints the plaintif Bagram for the express desire of testator has given his trustees power (3r. Bagram) as such permanent getting an advantage out of the to invest in preference shares pre- and managing director.

directorship. It was, in fact, formference atoch but so far as the ed on the express advice of leading language of the clause goes he I take the words "legally caning out the intentions of the testa ordinary stock and makes no reter- English counsel with idea of carry limits their power of investment to do so" to mean that if he can ap point an individual by name, then tor, if possible W

ence to ordinary shares, he appointa Sir Robert Ho Tung or failing him the plaintiff (Mr. Begram)

"Legally Can Do-So."

41

Fe

His Lordship No there is no suggestion of that kind. There if the testator desired to give his It is difficult to understand why, was, be. continued, no suggestion trustees power to invest in ordia- I am of opinion that the power of sharp practice the only questionary shares he did not say so. to appoint a successor to himself being one of law. It seemed to bim has expressly distinguished prefer as permanent and managing directo, be a very ingenious way of tryence sharce from preference stock, tor of the Company was confined ing to quality but it was perfectly and in other cases he does not cm- to the appointment as nominee, of honest. the senior representative in Hoog Kong for the time being of any time after the death of Sir C. business and having an office in the firm or corporation carrying on Chater, there shall cease to be a Colony; and that the appointment act as one of such permanent and nominee of his, duly appointed, to of the plaintiff, Mr. Bagram, as managing directors, then the com-ranted by the power given to Sir an individual by name, is not war pany may appoint one of its direc Paul Chater and is therefore bad. tors to act as managing (but not a permanent) director conjointly an individual by name, provided If, however, an appointment of

$10,000 Per Annum.

J. T. Bagram as permanent direc-with Jardine's senior representa-he is in fact the senior representa tor of the Hong Kong Land' In- tive. vestment and Agency Co., Ltd. The appellants were The Oficial Trustee of Bengal and Mr. J. T. Bagram, who were represented by Mr. H: G. Sheldon and Mr. Eldon Potter, K.C. respectively. Mr. C. G. Alabaster, K.C., was for Mr. W. E. L. Shenton (executor of the estate) and Mr. F. C. Jenkin for the Hong Kong Land Investment & Agency Co., Ltd. (respondents).

Decision 01 Full Court

Sir Henry Gollan said: The facts necessary to a consideration of the questions arising for decision on this appeal appear on pages 81 to 85 of Mr. Justice Wood's judg- ment, which is reported in 22 H.K.L.R. and ated not therefore bo set out again.

As the learned judge has pointed

tive of a firm or corporation carry ing on business and having an offer It is not quite clear to which in Hong Kong is good, still I think it would appear to be to the one nominee, E. 2, supru, refers, but that this qualification must have

been in existence on May 25th, appointed to act during Sir C. the day, of Sir Paul Chater's death Chuter's absence, temporary or end the date from which the cod permanent, from Hong Kong. The "penss As appears from tho appointment. of writing under Sir C. Chater's hand

nominee by evidence, this was not the case." in pae which only comes into opera tion on the latter's death, and there consequently can be no ques- tion of such a nominee resigning

SIR PETER GRAIN'S JUDGMENT.

said: I entirely agree with the In his judgment, Sir Peter Grain

or vacating his offer under the judgment and the reasons given for Articles of Association of the com- pany during Sir C. Chater's luch judgment of the learned Chief

(F). If at any time the senior representative of Jardine's and Sir C. Chater or his nominee shall both cease. to be permanent and manag ing directors, the company may appoint two of its directors to be

aging but not permanent. As permanent and managing draw the very considerable annual directors are not only entitled to

Justice in this matter." of Association of the Hong Kong By clause 1, of the Memorandum Land Investment and Agency Co., Ltd., Sir Paul Chater, who was one of the original and permanent and managing directors of the com- pany is given certain powers of appointment of his successor, in the event of his death,

ADMINISTRATION OF THE CHATER ESTATE,

power, in express terms, to take shares paid up or partly paid up (clause 17, C. and F. of the willys and if he had wished to give them, under clause 20, a similar discre tion, this could have been conferred

APPEAL AÏLOWED "ONLY » Oy on them in clear terms.

ONE POINT.

of the late Sir Paul Chater which formed the subject of an appeal The administration of the estate

before a Full Court on February 27th, was allowed only on one point, according to the decision given yesterday at the Supreme Court by Sir Henry Gollan, Chief

Justice.

The appellant was the Hon. Mr. WE. L. Shenton (executor), of Messrs. Deacons, the respondents being the official trustee of Bengal, Mr. J. T. Bagram, and Mr. E Messrs. Deacons. Sadick, a clerk in the employ of

appeared for the executor, Mr.

Mr. C. G. Alabaster, K.C... Eldon Potter, K.C., and Mr. B. G. Bengal, and Mr. F. C. Jenkin on Sheldon for the official trustee of behalf of Mr. Bagram.

the seniortion that its terms the trustees

In my opinion, therefore, both on the authority of "In re Willia" and on the language used by the testator, the trustees have no power to invest the moneys of the estate .n ordinary shares.

Evidence was tendered to show change stock

bat on the Hong Kong Stock Ex- nonomous terms, that no public and"shares" are company, registered in Hong Kong has in fact converted suy part of it capital into ordinary stock and that the testator, who was the most ife of the Colony and interested in prominent figure in the commercial post of the big local registered com.

any must be taken to have used he expression ordinary shares."

Outs Both Ways. ·

But that is an argument which cuts both ways, assuming that ex- trinsic evidence is admissible in a ease like the present, where the words actually used, are not biguous, and the context goes to

the will is used in its ordinary and show, as has been pointed out, that the expression "ordinary stock." in primary sense. The testator knew local commercial conditions and usages intimately, and must have

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Full Judgment.. first portion of this appeal is con- Sir Henry Gollan said:-The cerned with the construction of out more than once in the course

clause 20 of the testator's will, of his judgment, the validity or otherwise of the appointment of

which contains his directions to his Mr. Bagram, one of the plaintiff remuneration of 810,000 and such that in the event of his death he. The appellanta here seek a declara the term "stock", was locally used These powers are as follows: trustees for investment of moneys. been acquainted with the fact that and appellants in these proceed further mums na may be determix is entitled to appoint

to mean shares whether paid which should be placed on clauseing under article 05 (a) but also Hong Kong for the time being of nary shares of certain incorporated argued that he used the expression 1. of the Memorandum of Associa percentage on the net profits of tion of the Hong Kong Land In the company which has in some such firm or corporation carry on It is suggested that such a power sense deliberately; and that where any firm or corporation (so long as companies specified in the clause."ordinary stock" in its ordinary vestment and Agency Co., Ltd.

years amounted to a large sum, it business and have un cffice in Heng is to be found in either or both he intended that his trustees should (hereafter referred to as the com- is obvious that the company is very Kong), to, he a permanent and of two phrases therein. The first is have the power to hold shares, as pany), and it is to a consideration much interested in the interpreta- managing director of the company of the proper meaning of that tion of the powers given to the lata appointed by writing under his

them that power in express terms distinguished from stock, he gave clause that I propose principally Sir C. Chater, because if his ap- hand during his life or by his will to direct my attention.

pointment of the plaintif (Mr. or codicil."

as under clauso 17, C. and F. Bagram) is not good, the per- centage ceases to be payable as far Ls one permanent and managing directorship is concerned.

ings, depends on the constructioned by the company in general meet representative in the Colony of are empowered to invest in ordi- up or not, and we can bully pa|| HELL-BENT FER HEAVEN

Senior Representatives. (A). The clause nominates as permanent and managing diree

tora:-

It will be observed that during 1. The senior representative, his, absence, temporary or per- resident for the time being in manent, from Hong Kong Sir C. Hong Kong of Messrs. Jardine, Chater, as appears from A 9, Matheson and Co., Ltd. (here pro, may appoint either the after referred to as "Jardine's"), senior representative of a firm or so long as Jardine's carry on corporation, or an individual. ·* business and have un office in Hong Loan.

These powers appear to me to be quite definite and free from am- biguity.

funds or securities of any corpora tion, municipal, lccal or otherwise; and the second is "in or upon the debentures, debenture stock, bends, mortgages, preference shares, pre- company incorporated in the United ference stock, ordinary stock of any Kingdom er elsewhere."

in or upon the stocka or, funds or

It has been argued in the first that the word securities in the place, on behalf of the appellants, passage quoted above, should be trented as meaning investments.

are not ambiguous and there is no In my opinion the words used thing in the language of the in- circumstances to show that the strument or in the attendant

term ordinary stock" is employed in other than its popular and com- ter of law, the evidence tendered non ecnse and, therefore, as a wat to show that it has, another mesning. is not admissible.

asks that the decision below, on The second part of the motion

clause 6 in the summons, be re

Namely that Sir Paul Chater has powers in writing under his hand during his lifetime or by his will or codicil to appoint a senior re- presentative of a firm or corpora tion carrying on business and hay ing an office in Hong Kong as successor to himself to the office of a permanent and managing direc that the term " securities," as used Mr. Justice Farwell has beld tor in the event of his death. It in the wili which he was asked to is also a reasonable requirement. construc, bore its well defined, The business carried on by the primary meaning of money secur Hong Kong Land Investment Conted on property, and did not ex-

any was and is a business of some tend to stocks and shares in rail-titled pending the appropriations magnitude and ode that required way and other companies. business knowledge and business its directors to have considerable training, hence the senior repre

Only A. Temporary.. One, ^u

•

versed. The clause deals with the income to which certain cestui que trustments under the will are en-

intended for them. It was agreed in the court below that these per- sons were entitled to receive an in- come calculated according to a con-

of Dartmouth," 7. YES 180. The rule in the ease of "Howe v. Earl ventional rate of interest under the

that rule after hearing argument Following the decision in the case

The Required Qualidations. 3.-Sir O. Chater, during his "I take this to mean that Sir C. life. But in his absence tem Chater could either appoint "A.B." porary or permanent" from Hong an individual by name, or else any Kong, Sir C. Chater may appoint such senior representative without a nominee, who may be the senior naming him except by reference to but only the senior representative his position in a firm or corpora resident for the time being in tion; otherwise there would have

"Capricicus And Unintelligible," the Colony of any firm or cor- been no feed to give express power sentative of a firm or corporation.

In " In re Rayner" the testator poration carrying on business to appoint an individual,

declared that "alb moneyh liable to and having an office in Hong power to appoint a nominee by reveature with two managing dires. be invested in euch securities as my The The company started its business be invested under this, my will, may Kong, or may be an individual. ference to the person who from time (B). The senior representative to time fills the "position of the tors of considerable business and trustees in their absolute discretion judge in the court below applied! both or either of them resign under corporation is obvious to anyone Memorandum, of Association was so trustees to continue or leave any directed to the rate of interest only. of Jardine's and Bir C. Chater may senior representative of a firm or mind what one shall think it; and I authorise my article 04 of the Article of Associa- acquainted with the condition of same business and commercial moneys invested at my death in or tion of the company, or either or affaire in Hong Kong where the

upon the same securities." both of their offices may become personnel of a business concern ability should be guaranteed. ·

As pointed out Mr. Justice Ster-H.L. LE. P. 47, ho directed, that "Gubbay v. Gubbay" (1923), 12. vacant under the operation of varies so constantly as a result of

ling at the appeal:- It, in the the rate of eight per cont, per article 07.

retirement, absence an leave, or

The Memorandum of Association second of these sentences, the word annum should be applied to the (C). Bir C. Clater is given sicknesso. power to nominate and appoint by On the other hand the power to their permanent managing directors would be that if the testator at the is matter has here assumed ar

therefore in order to insure that secured on property, the result of the cestui que trust,

securities is limited to money calculation of the maximum elsim writing under his hand during his appoint which is to become opera should have these qualifications in time of his death had standing in entirely new aspect. It has bem life or by his will or codicif the tive on death, (see C. supra) is powered Sir Paul Chater to ap his own name two parcels of shares, noticed for the first time on appeal senior representative for the time confined to a senior representative; point as bie successor & senior re one being an investment of bis own that the testator himself has pro being of any firm or corporation nothing is said about the appoint presentative of a firm or corners while the other was only security vided in clause 7 of he will express (so long as such firm or corpora ment of an individual. I take the tion in-Hong Kong and only a tion carry on business and have an power to be confined to the ease itsenior representative of Arm toes would be at liberty to retainly for the disposition of all the net

for an advance of money, the trus office in Hong Kong) to be a per- expressly mentions, i.c.. the ap- or corporation." manent and managing director of pointment of a senior representa-

the former. I think that such from the estate, until the sale call rents, profits, and income arising It is true that Sir Paul Chatery the company and on Bir d

tive na such and 'not asan during his lifetime, could appoint course would be capricious" anding in, and conversion thereof. Chater's death the senior repre-individual.

under certain circumstances an

without any intelligible motive on sentative. so nominated and ap- pointed as aforesaid and the senior if the power of appointment given would be only a temporary one.

It will further be observed that individual but such appointment the part of the testator, who, it is to be remembered, was a business. representative of Jardine's, are to

But in the case now before us. Sir man." be permanent and managing directo Sir C. Chater, which is only to Paul Chater by his will, did not become operative on his death is appoint a senior representative of

tora.

1

**

13

"Securiles" Defined.

In the clause which we are being

Appeal Allowed On One Point

The task therefore of applying any rule of law does not arise. There is no necessity for us to answer the question here raised in

(P) 1-If Jardine's at any time confined to the senior representa a firm 0* corporation" but appoint asked to conutrue, t word detail. It is enough to say that

cease to carry on business or have tive of a firm or corporation thened an individual" by name, viz., securities" appears three times the matter is governed by clause an office, in Hong Kong, or 2. If the permanent and managing direc: Mr. John Theophiles Bagram, who in different collocations: -(1)7 of the will and if, after the in-

tor who follows immediately after their senior representative resign Sir O: Chater will occupy exactly was not even at the time of the Public Stocks or Funds or Gov. dication, the parties are unable to or vacates his office as mentioned the same position as his brother of firm or corporrtion. This by Kingdom, etc. (e) "Purchase or apply to the court for directions appointinent a senior representative ernment Securities of the United agree, they may then, if so advised, above, the company may from time to time appoint one of its directors permanent managing directore the memorandum of Association he Mortgage of any freehold, leasehold to act as a managing (but not a he will be the senior representative had no powers to do as he was or chatter real securities in the allowed accordingly. The costs of On this point the appeal munt, be permanent)-director. conjointly of a firm or corporation carrying

all parties here and below shall be on business and having an office in Hong Kong.

paid as between solicitor and client, from the estate.

with Bir C. Chater or his nominca. (E). If Sir C. Chater resigns under article 94 or vacates his office It is also interesting to notice under article 97 (1), or 2. If his that Sir C. Chater appears to have nominee aforesaid shall, during thought that his power of appoint Sir. C. Chater's life-time resign or ment of a nominee sa permanent vacate his office and Sir Chator and managing director of the com- shall not, as soon as conveniently pany was confined to the appont may be thereafter, duly appoint meat of a senior representative as another nominee, or 3. If, at any auch

only empowered to appoint a senior United Kingdom," etc. (3) Blocks representative of firm or cor- or funds or securities of any cor- poration.

poration municipal, local or other I am therefore of opinion that wise in the United Kingdom, etc. the appointment in the will of Bir.

A noto attached to the judgment Catchick Chater, of Mr. John ferred to I think there can be notirely concur in the judgment de In the first two places above re by Sir Peter Grain states-en- Theophilus Bagram is null and doubt that the word securities" livered by the learned Chief Justice. void ab initio and that this appeal is used in what Mr. Justice Farwell Mr. Justice Wood states:-I con-

be dismissed with costs as states in In re Rayner" supra, calle ita cur in the judgment delivered by in the Judgment of the learned well defined primary meaning of my brother, the learned Chief Chief Justice

money secured on property."

Justice.

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