TAM MEI KAM v. HSBC INTERNATIONAL TRUSTEE LTD AND OTHERS

HCMP 2981/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2981 OF 2004

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HCB 3777/2011

IN THE HIGH COURT OF THE

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO. 3777 OF 2011

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D E C I S I O N
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1. Madam Tam has filed three applications on 25 March 2015, two in HCMP 2981/2004 and one in HCB 3777/2011. The applications are for or related to payments of maintenance to her.

The 1^st application

2. The 1st application in HCMP 2981/2004 seeks two reliefs of special maintenance.  The first one is for HK$301,000 to save her from being evicted by her landlord.  The second is HK$170,500 being expenses for funeral and related religious service for her deceased 2nd son, Mr Mui Tak Ming.  Mr Mui died of carcinoma on 21 March 2015.  Madam Tam filed her 3rd affirmation to support this application.

3. Dealing with the 2nd relief first, Madam Tam confirmed that her 2nd son was the only financial support of his family and he was only able to make ends meet.  In fact, he had been relying on Madam Tam for help for a long period before his death because of his illness.  His children were only able to earn several thousand dollars per month and could not contribute to the family.  Mr Mui is also survived by his wife but there are no assets or money in his estate.  Madam Tam also confirmed in her 3rd affirmation that the other members of her family were unable to contribute to the funeral and religious service expenses.

4. Madam Tam also said that her deceased daughter Ms Anita Mui would certainly have shouldered these expenses were she still alive.  I have no doubt about that.  I am also of the view that such expenses do form part of the reasonable financial provision for Madam Tam under section 3(2) of the Inheritance (Provision for Family and Dependents) Ordinance, Cap 481 (“the Inheritance Ordinance”) (as referred to below).

5. Madam Tam has produced some receipts showing the expenses for funeral and related Chinese religious service totalling HK$170,500 had been incurred of which HK$150,700 is still unpaid.  I am satisfied that these expenses are reasonable for a decent funeral with religious service.

6. All other parties in these proceedings adopt a neutral stance in relation to this claim. 

7. In the light of Madam Tam’s need to arrange a decent funeral and religious service for her deceased 2nd son, I allow this application for special maintenance at HK$170,500. 

8. For the payment of this sum, I direct the 1st respondent to issue one crossed cheque for HK$89,000 payable to Luk Fook Funeral Services and another crossed cheque for HK$61,700 payable to Shang Sin Chun Tong and hand them to Madam Tam for her to discharge the outstanding funeral and religious service expenses.  For the balance of HK$19,800, the 1st respondent can pay it to Madam Tam in the usual course of payment.

9. Regarding the 2nd relief in this application at HK$301,000 to save Madam Tam from being evicted by her landlord, she had already applied for maintenance for the same purpose on a previous occasion earlier this year.  I dealt with that application in paras 6 to 11 of my decision dated 15 January 2015 as follows:

“6. Regarding arrears of rent, I allowed the applicant a monthly rental of HK$20,000 in my decision of 21 February 2014. However, the applicant ignored my order and entered into a tenancy for HK$43,000 per month.

7. The applicant also did not apply the monthly sum of HK$20,000 as allowed in my order to pay rent. The HK$43,000 per month rental up to August 2014 was paid by one Mrs Li, a friend of hers to her landlord for her benefit. Mrs Li could not afford this sum from September 2014 onwards and the applicant simply let the payment be outstanding. She has been sued by the landlord for arrears of rent from September 2014 to January 2015 totalling HK$215,000.

8. The applicant said in her 2nd affirmation in support of the application that my order allowing her HK$20,000 rental per month was unrealistic. She said she had the needs to cater for pets, to continue her lifelong lifestyle and to live near St Paul’s Hospital, the food market and her familiar restaurants. For these reasons, she needed a bigger flat in Happy Valley. Hence, she entered into the tenancy for her present accommodation.

9. The applicant has ignored what I said in paragraphs 32 and 34 of my decision dated 21 February 2014 where I said:

‘32. … I agree with Barma J (as he then was) that it is reasonable to expect Madam Tam as a bankrupt to make some adjustments to her lifestyle after her bankruptcy by economising on her expenditure whenever possible (Re Tam Mei Kam (a bankrupt) [2012] 4 HKLRD 345 at para 24).

…

34. Regarding rental, Madam Tam said at the hearing that she was negotiating for a new tenancy for premises with a usable floor area of about 1,000 to 1,100 sq ft. However, I have on 6 January 2014 already directed that she should look for new premises with about 500 sq ft usable floor area only’

10. The applicant is a bankrupt. She should economise on her expenditure. I see no reason why she has to live near the food market and her familiar restaurants. There are also smaller and cheaper residential premises in Happy Valley which are just as close to St Paul’s Hospital as her present accommodation is. She should also modify her life style and her mode of keeping pets to fit into smaller premises.

11. On the whole, I see no justification for this claim for HK$215,000 and I dismiss it.  The applicant will have to face the adverse consequence of not paying rent which is of her own making.”

10. I cannot see any change in Madam Tam’s circumstances except that her landlord has already obtained a writ of possession against her and the bailiff has given her final notice to deliver up vacant possession of the premises by 8 April 2015.  However, this is not a change of circumstances but a development only to be expected.  Hence, there is no basis for me to order payment of maintenance for her to discharge the outstanding rent.  To do so would also be to nullify my order dated 15 January 2015 without justification.

11. I also consider that this is the occasion for Madam Tam to look for new accommodation of a rental of about HK$20,000 per month.  Madam Tam should also have the resources to remove to new accommodation and to pay the deposit for the same as she has been receiving HK$20,000 per month for payment of rental since March 2014 but she has not applied the same for such purpose.  I therefore dismiss her application for further rental allowance at HK$301,000.

The 2^nd and 3^rd applications

12. Madam Tam’s 2nd application under HCMP 2981/2004 as supported by her 4th affirmation is for two lump sums of HK$35,195,322 and HK$20,488,771.  They are for her 15 years of maintenance and hospital and medical expenses respectively.  Alternatively, she asks for HK$1,981,320 being maintenance for her for 13 months from April 2015 to April 2016 when she expects that her bankruptcy would be discharged.

13. Madam Tam’s application in HCB 3777/2011 can be considered together with this application for payment of lump sums.  The application in HCB 3777/2011 is for the Income Payments Order (“IPO”).  I made on 21 February 2014 to be varied to the extent that the monthly payments of HK$102,000 to her trustees in bankruptcy from April 2015 to March 2016, and the payment of HK$105,570 for April 2016 should be paid by her to her trustees directly and not by the 1st respondent in HCMP 2981/2004 on her behalf.  

14. This application is predicated upon the success of her application for payment of lump sums.  She stated in her 5th affirmation that if she should succeed in getting a lump sum of HK$35,195,322 for 15 years of her maintenance, which would include the monthly payments to her trustees under the IPO from April 2015 to April 2016, the IPO should then be varied so that the monthly payments would be paid by her to her trustees instead of by the 1st respondent on her behalf. 

15. These two applications are opposed by all other parties.

16. Regarding the lump sums application, Madam Tam said in her 4th affirmation that her application is in accordance with sections 4(1)(b), 5(1), 5(3), 8(1) and 8(3) of the Inheritance Ordinance.  I however consider that sections 3(1)(iv), 3(2)(b) and 4(1)(a) are also relevant.

17. These sections provide:

“3. (1) Where after the commencement of this Ordinance a person dies-

(a) domiciled in Hong Kong; or

(b) having been ordinarily resident in Hong Kong at any time in the 3 years immediately preceding his death,

and is survived by any of the following persons-

…

(iv) a parent of the deceased who immediately before the death of the deceased was being maintained, either wholly or substantially, by the deceased;

that person may apply to the court for an order under section 4 on the ground that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant.

(2) In this Ordinance, ‘reasonable financial provision’ (合理經濟給養)-

…

(b) in the case of any other application made by virtue of subsection (1), means such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance.

4. (1) Where an application is made for an order under this section, the court may, if it is satisfied that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant, make any one or more of the following orders-

(a) an order for the making to the applicant out of the net estate of the deceased of such periodical payments and for such term as may be specified in the order;

(b) an order for the payment to the applicant out of that estate of a lump sum of such amount as may be so specified;

5. (1) Where an application is made for an order under section 4, the court shall, in determining whether the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is such as to make reasonable financial provision for the applicant and, if the court considers that reasonable financial provision has not been made, in determining whether and in what manner it shall exercise its powers under that section, have regard to the following matters-

(a) the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;

(b) the financial resources and financial needs which any other applicant for an order under section 4 has or is likely to have in the foreseeable future;

(c) the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;

(d) any obligations and responsibilities which the deceased had towards any applicant for an order under section 4 or towards any beneficiary of the estate of the deceased;

(e) the size and nature of the net estate of the deceased;

(f) any physical or mental disability of any applicant for an order under section 4 or any beneficiary of the estate of the deceased;

(g) any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant.

…

(3) Without prejudice to the generality of paragraph (g) of subsection (1), where an application for an order under section 4 is made by virtue of section 3(1)(iv), the court shall, in addition to the matters specifically mentioned in paragraphs (a) to (f) of that subsection, have regard to the age of the applicant and the contribution (if any) in money or money’s worth made by the deceased towards the needs of the applicant immediately before the death of the deceased.

…

8. (1) Where the court has made an order under section 4(1)(a) (in this section referred to as “the original order” (原有命令)) for the making of periodical payments to any person (in this section referred to as “the original recipient” (原收受人)), the court, on an application under this section, shall have power by order to vary or discharge the original order or to suspend any provision of it temporarily and to revive the operation of any provision so suspended.

…

(3) Where the original order provides that any periodical payments payable thereunder to the original recipient are to cease on the occurrence of an event specified in the order (other than the remarriage of a former wife or former husband) or on the expiration of a period so specified, then, if, before the end of the period of 6 months from the date of the occurrence of that event or of the expiration of that period, an application is made for an order under this section, the court shall have power to make any order which it would have had power to make if the application had been made before that date (whether in favour of the original recipient or any such person as is mentioned in subsection (2)(a) and whether having effect from that date or from such later date as the court may specify).”

18. Madam Tam’s reference to section 4(1)(b) is to show that the court can order maintenance in a lump sum under that section rather than in periodical payments under section 4(1)(a).  Section 5(1) stipulates the matters that the court should consider in deciding an application for maintenance either for periodical payments or for a lump sum.  Section 5(3) stipulates the additional matters to be considered when the person sought to be maintained is a surviving parent of the deceased.  For sections 8(1) and 8(3), they empower the court to vary or discharge a periodical payments order.

19. I would however consider that section 3(2)(b) is the most important provision for consideration in the lump sums application.  That section prescribes what is reasonable financial provision for Madam Tam to receive for her maintenance.

20. Madam Tam in her 4th affirmation produced a Chinese medical certificate issued by a registered traditional Chinese medical doctor dated 17 March 2015 and an English medical certificate by a cardiology specialist.  Both certificates opine that Madam Tam may live for another 15 years or more.  It is on the strength of these certificates that Madam Tam seeks lump sums for maintenance and hospital and medical expenses for 15 years commencing from April 2015.

21. In addition, she has also produced a bundle of invoices issued by St Paul’s Hospital to her covering the period from 11 December 2013 to 15 February 2015.  The invoices show that the total hospital and medical expenses incurred by her in this period was at HK$1,061,837.  She used this figure as her latest yearly expenses and extrapolated to the next 15 years with 3.5% annual inflation and came to the lump sum of HK$20,488,771. 

22. Regarding the two medical certificates, I cannot accept the opinions therein by the doctors as expert evidence as Mr So for the 1st respondent has rightly pointed out that the certificates have not complied with O 38 rr 37A and 37C(1) and cannot be admitted in evidence.

23. O 38 rr 37A and 37C(1) provide:

“37A. An expert report disclosed under these rules must be verified by a statement of truth in accordance with Order 41A.

…

37C. (1) An expert report disclosed under these rules is not admissible in evidence unless the report contains a declaration by the expert witness that –

(a) he has read the code of conduct set out in Appendix D and agrees to be bound by it;

(b) he understands his duty to the Court; and

(c) he has complied with and will continue to comply with that duty.”

These medical certificates do not have the necessary statement of truth or declaration by expert.  They are thus not admissible.  There is therefore no expert evidence of Madam Tam’s longevity.

24. However, even if there is admissible evidence that Madam Tam may live long, there is still the question of whether a reasonable financial provision for her should be by way of the existing periodical payments or by the lump sum sought by her.

25. A reasonable financial provision should be a provision that is reasonable in all the circumstances of this case for Madam Tam to receive for her maintenance.

26. All the circumstances of this case must include those of other beneficiaries.  There are five other beneficiaries whose interests have not been satisfied.  Four of them are Madam Tam’s grandchildren for whom Madam Tam says that no objection would be made to this application.  The 5th beneficiary is the 3rd respondent which is the final repository.  Mr So for the 1st respondent confirmed that its position is similar to that of a residuary legatee.

27. Madam Tam is now 92 years old.  To pay her a lump sum as maintenance for 15 years may prejudice the interest of the 3rd respondent in case the lump sum should turn out to be an overpayment.  This is so with/without the medical opinions that Madam Tam tried to adduce.

28. On the other hand, the existing periodical payment at HK$158,000 per month is a reasonable financial provision for her in all the circumstances of this case.  The fact that she is only getting Hk$50,000 out of HK$158,000 is because of her bankruptcy which necessitated HK$108,000 to be given to her trustees in bankruptcy under the IPO.  However, I cannot order a lump sum to cover a long period of maintenance for her so as to relieve her from her difficulty which is consequential from her bankruptcy.  I have observed above that it may prejudice the interest of the 3rd respondent.

29. Furthermore, I cannot deal with Madam Tam’s claims on the assumption that her bankruptcy would definitely be discharged in April 2016.  There are still 13 months to go.  It is too early to say if anything might happen in the meantime that could delay her discharge. 

30. In the premises, I cannot entertain this application for a lump sum to cover her maintenance for 15 years.

31. Regarding the claim for hospital and medical expenses, such expenses are currently paid by the 1st respondent when incurred by Madam Tam.  This arrangement has worked satisfactorily.  There is no reason for change.  However, Madam Tam asks for payment of a lump sum of HK$20,488,771 as her estimate of such expenses for the next 15 years.  I am of the view that the reasoning against the payment of the 15 year maintenance claim also applies here.  I therefore will not entertain this claim either.

32. Regarding her alternative claim for a lump sum of HK$1,981,320 as her maintenance from April 2015 to April 2016, I think the amount of this claim is slightly exaggerated.  Putting aside the slight exaggeration, I cannot see how such lump sum can benefit her because it includes the monthly sums payable to her trustees in bankruptcy.  If she gets the lump sum and pays off her trustees duly, she will still be left with HK$50,000 per month.  Her deficiency will remain the same.  I therefore decline this alternative claim as well.

33. Finally, her application made in HCB 3777/2011 is predicated upon the success of the lump sums application.  The failure of that application thus defeats this application as well.

34. In the premises, I dismiss the 2nd application in HCMP 2981/2004 and the application in HCB 3777/2011.

35. I would also say that if Madam Tam would like to appeal against this decision, I do not think she would need leave to be granted first.  The reasons are those that I have given in two decisions in these proceedings on 23 May 2014 and 26 January 2015.

Costs orders nisi

36. Since Madam Tam has only succeeded in a small claim which is not really opposed, I would make a costs order nisi that she has to pay 80% of the costs of these applications to the other parties (save and except the 4th respondent) to be taxed.

37. Regarding the 4th respondent, I understand that his interest as a beneficiary to the estate of Ms Anita Mui has been satisfied completely.  Hence, his interest would not be affected by Madam Tam’s applications.  There is therefore no need for him to attend to these applications.  I would also add that the service by Madam Tam of her applications on the solicitors for the 4th respondent without more does not justify his incurring costs to oppose them as his interest would not be affected.  His solicitors should be aware of this.  Likewise, his intent to assist the court would not justify an order requiring Madam Tam to pay him the costs for providing such assistance.  Therefore my costs order nisi for him is no order as to costs.  If the 4th respondent still wishes to have costs of these applications, his solicitors should furnish the grounds within the next 14 days.