1968 No. 155
IN THE SUPREME COURT OF HONG KONG
Coram: Morley-John, J. in Chambers
1. The plaintiffs, the Hong Kong & Shanghai Bank Hong Kong (Trustee) Ltd. by an originating summons seek the determination of thecourt on certain questions or matters arising in the administration of the estate of Antonio Eduardo Botelho de Sousa. The two questionsare:-
2. From the affidavits in this case it is clean that an auction business was carried on by the deceased’s father before the outbreakof the Pacific War and that this business was in the firm name of China Auction Rooms conducted in the premises known as the FrenchBank Building and this business was terminated at the outbreak of the war in Hong Kong on the 7th of December 1941. The father ofthe deceased died in Hong Kong intestate on or about the 17th of January 1942. That after the re-occupation of Hong Kong in 1945an auctioneering business was started by the deceased on the same premises as the business initially carried on by the deceased’sfather but it was first carried on under the firm name of Service Auction Rooms, that a few years later the name was changed to DeSousa’s Auction Rooms. This business was carried on by the deceased until his death in Hong Kong on the 18th of April 1966. By Clause3 of the deceased’s will he bequeathed to his brother Luis Eduardo de Sousa and his nephew Roberto Eduardo de Sousa the goodwillof his business of auctioneers under the style or firm name of A.E.B. de Sousa otherwise known as De Sousa’s Auction Rooms with aproviso that in the event of either Luis or Roberto ceasing to be a permanent resident of the Colony the gift would go solely tothe other of them so remaining a permanent resident in the Colony.
3. Luis de Sousa immigrated to the United States of America in or about 1965, however in May 1966 having received a copy of the deceased’swill, he wrote to the plaintiffs on the 4th of May confirming that he was no longer a resident in Hong Kong but followed that witha letter dated the 8th of May 1966 in which he said that in his bereavement he wrote that he was not now residing in Hong Kong butthat in fact he was a native of Hong Kong and that he wished to return to Hong Kong to run and continue the business of De Sousa’sAuction Rooms. As a result of this letter, the plaintiffs in December 1965 caused the matter to be referred to this court on thequestion of Luis de Sousa’s residence. In these proceedings Luis de Sousa swore an affidavit in America before a British Pro-Consulin which he stated, inter alia, that he contested the portion of his late brother’s will which contained the condition that he shouldremain a permanent resident of Hong Kong in order to be eligible to receive the bequest. He said that the deceased carried on thebusiness with the approval of the de Sousa’s family and said that that business was never wound up or liquidated, and as the deceased’sfather died intestate, he claimed that as the deceased surviving brother together with the other issue of the deceased father hehad an equal right in the disposal of the goodwill of the family business.
4. By an order of the court made on the 17th February 1968 the court was of the opinion that Luis Eduardo de Sousa ceased to be a permanentresident of the colony of Hong Kong in December 1965 and that without prejudice to the question whether or not the subject matterof the said bequest had vested in the plaintiffs the said Roberto Eduardo de Sousa was solely entitled to the said bequest to theexclusion of the said Luis Eduardo de Sousa. It is now as what I might call the second leg of the Luis Eduardo de Sousa’s argument,that is, that because the father of the deceased died intestate that he and the rest of the issue of the father of the deceased areentitled to a share in the goodwill of the family auction business, that the plaintiffs have sought the court’s determination onthe question that they have.
5. At the time of his death the father of the deceased left ten issue surviving him, namely:-
On the 1st of April 1968 the plaintiffs’ solicitors wrote to the surviving issue of the father of the deceased explaining the positionand enquiring whether any of them supported the further claim of Luis Eduardo de Sousa. Mrs. Jacqueline Ribeiro, Miss Laura de Sousa,Miss Aurea de Sousa, Miss Mary Emilia de Sousa and Mr. Roberto Eduardo de Sousa replied that they did not support the further claimof Luis Eduardo de Sousa and that they did not wished to be joined in any court proceedings in respect of this claim. The two infants,F. de Sousa and D. de Sousa, by their guardian ad litem have stated that they would leave the matter to the court. Luis Eduardo deSousa reiterated his claim and further supported his claim in a letter undated. J.E. de Sousa at a very late stage sent an affidavitin which he merely supported his brother’s claim (that is the claim of Luis Eduardo de Sousa) and this affidavit was received bypost on the 19th of July 1968. F.A. de Sousa has not replied to the letter from the plaintiffs’ solicitors despite a reminder havingbeen sent on the 27th April 1968.
6. As a result of the above the defendants in these present proceedings are J.E. de Sousa, first defendant (at the time that he wasmade first defendant the plaintiffs’ solicitors had received no reply to their letters); F.A. de Sousa, second defendant; F. de Sousaand D. de Sousa, infants by their guardian ad litem Mrs. Elsie de Sousa, third defendants and Luis Eduardo de Sousa, fourth defendant.None of the defendants have entered an appearance in these proceedings.
7. The first question that I am asked to decide is whether the auction business carried on by the said deceased during his life timewas in fact and in truth his own business and if so whether the same had vested in the plaintiffs as executors of the will of thesaid deceased. Having perused all the affidavits in this case and listened to Mr. Charles Ching, counsel for the plaintiffs, I amsatisfied that the auctioneering business carried on by the father of the deceased terminated at the outbreak of The War on the 7thDecember 1941. This is stated by Roberto Eduardo de Sousa and his contention is supported by Luis Eduardo de Sousa in his letterundated referred to in the affidavit of John Neville Cotton dated 13th June 1968 and marked ‘G’ and although in his affidavit datedthe 1st December 1967 referred to in the said affidavit of John Neville Cotton and marked ‘C’ Luis Eduardo de Sousa says that thebusiness was never liquidated and never wound up, I am satisfied that at the death of the father of the deceased on the 17th of January1942 the said business had ceased to operate. I am satisfied that after the reoccupation of Hong Kong in 1945 the deceased starteda new business. Maybe when he started his business he may have benefitted from any goodwill which may have lingered on from his father’sbusiness which ceased nearly four years previously and at that time the surviving issue of the deceased’s father may have had a claimto that goodwill at that time but what would have been the value of that goodwill is impossible now to say. However, no such claimwas made and the deceased then built up his new business over a period of some twenty years, and during that time no claim was madethat the business was not in fact and in truth the deceased own personal business, and at the time of his death I am satisfied thatthere was no connection between that business and the business of his late father which ceased in December 1941. I believe RobertoEduardo de Sousa when he said in his affidavits of the 16th of February 1968 and 27th of July 1968 that the profits of the said businesswere for the deceased’s own account and that at no time did any other issue of the deceased’s father ask for or obtain any sharein the profits of the said business and that any reference to a family business that he has made should be interpreted as meaningthat three successive generations of the de Sousa family have been engaged in the business of auctioneering and that the auctionbusiness could be considered a family business in the traditional sense.
8. This being so I am of the opinion that the auction business carried on by the deceased during his life time, such business beingthe subject matter of a bequest made under Clause 3 of the will of the said deceased, was in fact and in truth his own business andtherefore I am satisfied that the same has vested in the plaintiffs as the executors of the will of the said deceased.
9. This being so the alternative question is no longer relevant.
10. Costs on Solicitor and own client basis to be paid out of estate.
Mr. Charles Ching (Philip …(illegible)) for plaintiffs