YEUNG MUN LAI JULIA v. YOUNG HILL LING AND ANOTHER

HCCA 879/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CAVEAT NO HCCA 879 OF 2014

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D E C I S I O N

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Introduction

1. There are 4 summonses before me.  In short, they boil down to 2 questions.

(a) Who should be the administrator for the estate (the “Estate”) of the deceased?

(b) Should the present caveat proceedings be stayed pending the determination of a probate action?

Background

2. The Deceased died intestate on 5 November 2012 at the age of 83.  His wife died before him about 18 years ago in 1996.  They had two children, Min Chi[1] and Julia.

3. Min Chi also died before the Deceased in 2011, and as such, he could not inherit half of the Estate.  Instead, by the per stirpe rule, his three children (Hill Ling, Hill Land and Hill Yu) would take up his share equally.

4. Julia on the other hand survived the Deceased and she herself therefore took half of the Estate.

5. Before the demise of the Deceased, Min Chi and Julia had a dispute in HCMH 59/2011 (the “Mental Health Proceedings”).  At the end of the day, on 27 April 2012, the Court decided to appoint an independent solicitor to act as the Committee for the Deceased who having been declared him as a MIP.

6. The Committee could only serve the Deceased for about half a year only.  At the date of the death of the Deceased, from the (first and) final account prepared by the Committee, there was a balance of about $2.6 million cash at bank, some shares, a safe deposit box with bank and the Palazzo property (held trust in the name of Beginfast Limited).

7. On 28 January 2014, Hill Ling/Hill Land lodged HCAG 1395/2014 to apply for the grant of the Deceased.

8. However, Julia entered a Caveat on 27 February 2014 under the present HCCA 879/2014 so that no grant of the Deceased could be issued without reference to her.

9. Thereafter, Julia took out a summons herein.  She prayed for inter alia, an order that HCAG 1395/2014 should be revoked (dismissed/withdrawn) and Hill Ling/Hill Land should provide her with all documents filed therein.

10. In her supporting affirmation, she recapped the parties’ dispute in the Mental Health Proceedings.  She also said that Hill Ling/Hill Land should not be granted administration of the Estate because they had an interest which conflicted with proper administration.  They took away more than 1 million in total from the Deceased’s account.  They stole 10 gold bars from the safety box of the Deceased.  Last but not least, the Palazzo Property (registered in the name of Beginfast Limited wherein Hill Ling/Hill Land were directors) should belong to the Deceased and they had not transferred the title to the Deceased, despite requests.

11. On 8 July 2014, I dealt with the first call-over hearing of Julia’s summons.  Upon discussing with Counsel for the parties, I gave usual directions for affidavit evidence and adjourned the matter for a further call-over hearing.

12. Hill Ling/Hill Land and their mother prepared 3 affirmations in opposition.  They set out the family background including the heath condition of Min Chi at the material times.  They said that the Deceased was extremely concerned about it and therefore authorized, among others, the payment of medical expenses of Min Chi.  Although Hill Ling/Hill Land did visit the safety box, there were no such 10 gold bars, as alleged, let alone the taking or steal of them.  As the Palazzo property, they in fact agreed to transfer it.

13. I dealt with the further call-over hearing on 5 September 2014.  I had 2 further summonses before me. Julia prayed that her earlier summons was to be adjourned sine die and leave be granted to her to commence a probate action.  Hill Ling/Hill Land asked for the appointment of an independent solicitor/administrator under section 36 Probate and Administration Ordinance (Cap 10).  Upon discussion, including that leave to issue probate action was not needed, I made no order to Julia’s new summons (save costs be reserved).  I also adjourned Julia’s earlier summons and the section 36 PAO summons to be heard together.

14. Julia later filed her affirmation in reply.  She said that she enjoyed a close relationship with her mother and the Deceased.  However, Min Chi and his wife always used different excuses to get money from them.  She produced various letters to support her propositions.  She explained the various properties transactions and repeated the “blatant” intermeddling on the part of Hill Ling/Hill Land.  She also doubted if the section 36 PAO summons was bona fide or not.

15. Regarding the section 36 PAO application, a separate set of directions for affidavit evidence was given.

16. Both sisters prepared the affirmations in support.  She proposed 4 solicitors in 3 different firms for the court’s choice.

17. Julia opposed it.  She said that she was familiar with the case.  She should not be “passed over” and that substantive legal costs had been involved in the MIP proceedings and those herein.

18. Early this year, parties did attempt to try mediation but regrettably in vain.

19. On 5 May 2015, Julia issued her probate action under HCAP 14/2015 (the “Probate Action”).

20. Two days later, she issued 2 further summonses to stay the 2 summonses (and proceedings herein) returnable before me on 18 May 2015.

Rulings and Discussions

21. Upon consideration of the evidence authorities and submissions from both counsel, Mr Hung for Julia and Mr Fung for Hill Ling/Hill Land, I have decided to appoint Julia as the administratrix for the Estate in principle in the circumstances.

22. I start to tackle the problem by seeing if this court could decide on the argument as to who should be administering the Estate.  If it was resolved, the Probate Action[2] would become redundant, and as such, there is no need to stay the present proceedings pending determination of the probate action.

23. In theory, I have 3 options.

(a) Julia,

(b) Hill Ling/Hill Land, or

(c) An independent solicitor.

24. Since Hill Ling and Hill Land and are not asking for them to be the administrators (and indeed, even if they would be asking it, with the apparent conflict of interest against them, their request are not to be accepted by the court), all the arguments advanced by Julia against them were therefore unnecessary or only bore little weight in my decision, such option can be easily deposed of.

25. At one stage, I thought that an independent solicitor was a good choice. In the Mental Health proceedings, it was indeed the choice of the court.  Both Julia and Min Chi were not preferred.  So, should the same approach be adopted herein, again?

26. On second thought, bearing in mind that the following factors, I have decided to rule otherwise.

27. Both Julia and the children of Min Chi (i.e. Hill Ling/Hill Land and their sibling) will take equal share of the Estate.  Under rule 21(1) (ii) of Non-Contentious Probate Rules (Cap. 10A), they enjoy and prior right to the entitlement of grant.

28. Is it then “necessary or convenient” in the present case to appoint an independent solicitor to “pass over” Julia and to take up the administration?

29. Both counsel referred me to the authority of Re Estate of Loo Che Chin [2013] 2 HKLRD 739, Jeremy Poon J. I have no hesitation to adopt the followings as summed up by the learned Judge.

“13. Now, it is well-established that friction or hostility between an executor and a beneficiary alone, without more, is of itself not a good reason for removing the executor. No corrupt or improper motive is to be imputed to the executor even if mutual hostility, without more, is established: Earl of Portsmouth v Fellows. However, if the hostility is grounded on the mode of administration, then it is a factor that cannot be ignored: Letterstedt v Broers, Hunter v Hunter, Kershaw v Micklethwaite. This is a relevant factor because the expeditious and economical administration of the estate is always one of the objects that the Court keeps in mind: Chang Man v Ma Shou Yung. Thus, if by reason of the hostility, the executor is rendered unfit to perform his duties as executor, he may be removed: Lefkowitz v Bank of New York. Such inability to perform his duties as executor may be proved if it can be demonstrated that he would, say, by reason of the hostility, (a) administer the estate in a manner not in accordance with the law: Re Estate of Chan Hung Mou; or (b) obstruct the due administration of the estate: Kershaw. The Court may also pass over the executor if the breakdown of relations has caused or has the potential to cause difficulty in the administration of the estate: Kershaw.”

30. With the above in mind, it is indisputable that there are some friction and hostility between Julia and Hill Ling/Hill Land.  However, they are not grounded on the mode of administration but mainly on the fact that Julia has been trying to recover monies and properties belong to the Estate.

31. It is also expeditious and economical for Julia to take up the administration.  She (and her legal representatives) has been familiar with the all proceedings and stance of Hill Ling/Hill Land.  A new appointment of an independent solicitor will definitely incur costs in perusing papers, investigations, and assessment and so forth.

32. More importantly, one does not forget the appointment of the Independent Committee by the court in the Mental Health Proceedings.  It has achieved no fruitful result in the “recovery” of monies or properties for the Estate.  Further, time and costs have also spent herein for settlement, but again, in vain.  I hate to say so, unless parties could really put their heads together bearing in mind factors like amicable relationship of a family, proportionality, give and take on different matters, it is more likely than not that their dispute, including the scope of the Estate have to be put before the court for adjudication through administration action (Order 85 of the Rules of High Court (Cap. 4A).

33. Mr Fung further tried his very best to advance a number of reasons against the appointment of Julia as the administrator.  However, I either do not accept them or find them insufficient to deprive Julia of her entitlement to the grant.

34. It was said that Julia had not asked (expressly) for a grant to be issued to her in her summons.  I disagree.  This court looks at the substance rather than form only.  If one considers her stance as a whole, including the taking out of the Probate Action and the relief prayed therein, it can never be denied that Julia wants herself to be appointed so that she would recover the monies and property having misappropriated, for the Estate.

35. It was also said that Julia was delaying the administration.  I do not accept such proposition.  There might be instances where this court does not agree entirely how Julia or her legal representatives have conducted the case, it does not necessarily mean that she is trying to delay the matter especially when she is “biggest” beneficiary under the Estate.

36. Last but not least, Julia was said to be in conflict with the Estate because she had a claim of over 400,000 against the same.  It might be so.  However, like friction and hostility, it per se and without more cannot be a conclusive factor to deprive one’s entitlement to grant.  More often than not, only members of the family will pay for the deceased, like medical or funeral expenses, out of their own pocket and they therefore have to incur claims to the estate.  In the present case, I also note that the Committee has considered the sums claimed by Julia together with her explanation and supporting documents.  Probably, but for the lack of forthcoming consent from Hill Ling/High Land, such claim would have been settled from the accounts of the Deceased.

37. With the choice of Julia, the stay applications become unnecessary and are to be declined.

Costs

38. I do not have the benefit of parties’ assistance on the question of costs but no doubt, costs remains a matter within the discretion of the court to be exercised judicially.  Costs usually follow event unless there is good reason(s) justifying departure.

39. In the present case, Julia won before me.  However, I take the view that there should be no order as to costs.  She should have made her stance clearer in the first summons issued herein. Quite some allegations against Hill Ling/Hill Land were included in her evidence. Not only that these arguments would not be able to be resolved by affidavit, they are indeed not needed because the siblings have not asked themselves to be the administrators.  However, time and costs have been spent on the allegations. Last but not least, the applications for stay have been issued late and were refused at the end.

Conclusion

40. To conclude, I make the followings orders.

(a) HCAG 1395/2014 be withdrawn.

(b) For the avoidance of doubt, the Caveat filed on 27 February 2014 herein shall cease to have any effect.

(c) Subject to the filing of all necessary papers required, grant to the estate of the Deceased be issued to the Caveator (Madam Yeung Mun Lai Julia), if entitled to.

(d) The summons filed by the Person Warning on 29 August 2014 is dismissed.

(e) The 2 summonses filed by the Caveator, both on 7 May 2015 are dismissed.

(f) There is no order as to costs of the proceedings and all summonses before the court, including costs reserved. This is an order nisi and will be made absolute after 14 days.