Posts Tagged ‘conditional gifts’

Father’s gift of property to son: Conditional on son’s caring for father?

August 15, 2020

In Yeung Hock Wai v Chan Wai Man ([2020] HKCFI 1693) a father gave his son a 25% interest in two properties owned by the father (‘the properties’). The son pre-deceased his father.

After the son’s death the father (the father’s estate after the father’s death) claimed that the gift to the son was conditional and that, as the son had failed to satisfy the conditions, the father was entitled to recover the son’s interest in the properties.

The father alleged that the son had accepted that the gift to him was conditional on: (i) the son caring for the father; and (ii) the son working in the father’s business.

Bebe Chu J held that:

  • the gift was unconditional ([135]);
  • even if the father had attempted to impose the conditions on the gift to the son, the conditions were ‘precatory words’ not intended to have legal effect ([150]);
  • if the conditions were intended to have legal effect, they were void for uncertainty (so that the gift would still be unconditional) ([162]);
  • if they had been intended to have legal effect and been sufficiently certain, the conditions would not need to satisfy the formalities requirements in CPO s. 3(1) ([166]);
  • it was accepted on behalf of the son’s estate that if the conditions had been legally effective then, since they had not been complied with, the son’s interest in the properties would be held on ‘constructive or resulting’ trust for the father ([166]);
  • the trust would be a ‘type 2’ constructive trust under the Paragon Finance classification so that the Limitation Ordinance would apply and the father’s claim was brought outside the six year limitation period ([174]);
  • in any event the claim would be barred by the doctrine of laches (the son’s widow was prejudiced by the delay in bringing the claim ([176]).

Michael Lower