Legal Framework for Civil Society and Law Reform

Case Notes: Asia Pacific

The International Journal
of Not-for-Profit Law

Volume 4, Issue 4, June 2002

Hong Kong

Interpretation of Trust Terms to Prevent Failure of Trust

A trust established under a will in 1955 provided for the application of the trust income in furtherance of such charitable objects “in the British Colony of Hong Kong as… the Governor for the time being of the said Colony may specify as deserving causes”. Following the transfer of sovereignty over Hong Kong to China on 1 July 1997, the trustees applied for a declaration that that the trust had not failed. The court granted the declaration sought, holding that:

  • the expression “British Colony” in the will was purely descriptive of the place which the testator wished to benefit, and did not clearly and unequivocally indicate that the gift was determinable on the change in sovereignty
  • the fact that the office of Governor ceased to exist on 1 July 1997 did not cause the trust to fail, since the breakdown of the particular machinery through which the donor intended the gift to be put into effect would not defeat the gift (applying Moggridge v. Thackwell, (1802) 7 Ves 36);(HSBC Trustee ( Hong Kong) Ltd v. Secretary for Justice, [2000] 1 HKLRD 31) PB