RE MARVIN LESLIE GIENGER

       HCCA 487/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CAVEAT NO. HCCA 487 OF 2006

______________________

______________________

_______________

D E C I S I O N

_______________

Application

1. This is a dispute between a daughter and a stepmother as to who should be appointed as the administratrix of the estate (“the Estate”) in Hong Kong of Mr. Gienger Marvin Leslie (“the Deceased”).

Background

2. The Deceased died intestate on 7 September 2000 in New York leaving the following persons entitled to share in the Estate:

(a)       Madam Chiong Kam Fong (“the Wife”), the Person Warning herein, who married to the Deceased on 14 May 1982 in Hong Kong,

(b)       Ms. Kris J. Gienger (“the Daughter”), the Caveator herein, born on 14 July 1962 by the Decesed and his former wife Madam Jeanette Marion Bache.

(c)       Mr. Ian Jordan Gienger (“the Son”) borne by the Deceased and the Wife on 4 November 1987.

3. The Son is now studying in the Status.  He takes a natural stand towards the present dispute between the Wife and the Daughter.

4. After the death of the Deceased, the Wife engaged Messrs. Angela Wong & Co. to apply for the letters of administration of the Estate, including liaising with the Inland Revenue Department (“IRD”) to pursue the estate duty clearance papers.  On the other hand, Messrs. Deacons, upon the instructions of the Director of Legal Aid (“DLA”), represented the Daughter in respect of the matter relating to the Estate.  Since the year of 2001, the Daughter has lodged continuing Caveats with the Probate Registry against the Estate.  In the meantime, the parties as well as their legal representatives also engaged in some correspondence with one another, including the validity of the marriage between the Deceased and the Wife, the size of the Estate, the identity of the administratrix or co-administratrices, and so forth.

5. On 15 July 2004, IRD issued the Certificate of Exemption of Estate Duty to the Wife, and the Schedule of Property (“the Schedule of Property”) attached thereto showed the followings:

	“Principal value of estate	$10,942,660.56
Less:	deductions Per “Schedule of Deductions Allowed” attached hereto	3,653,563.61
	Net principal value of estate	$7,289,096.95”

6. The Wife then lodged her application for letters of administration in respect of the Estate under HCAG 12266/2004 on 13 December 2004.  However, the Registry could not process this application because of the then Caveat filed by the Daughter in HCCA 3014/2004.  The Wife filed a draft Warning to be approved by this Court, but it became unnecessary when she decided to withdraw HCAG 12266/2004 and file another fresh application when the Son would have attained 18 years old in November 2005 in order to dispense with the need for a co-administratrix.

7. On 28 February 2006, Messrs. Boase Cohen & Collins, the present solicitors acting for the Daughter on legal aid, filed a new Caveat in the present proceedings HCCA 487/2006.  The Wife then served her Warning on 27 June 2006.  An Appearance to Warning was subsequently filed on 12 July 2006 by Mr. Boase Cohen & Collins who further issued a summons under rule 44(10) of the Non-Contentious Probate Rules (Cap. 10A) (“NCPR”) and section 36 of the Probate and Administration Ordinance (Cap. 10) for, among others, an order to appoint the Daughter as administratrix of the Estate.  The Wife disagreed.  I heard the substantive argument of the dispute on 17 January 2007.  Mr. Jeremy Bartlett of Counsel represented the Daughter and the Wife acted for herself.  Having heard from the parties, I reserved my decision to be handed down.  I now do so.

Ruling

8. Upon consideration of all the evidence authorities and submissions put before me, I have decided that the Daughter’s application is to be refused.  My reasons appear in below.

The Law

9. It is not disputed that this Court does have a wide discretion in choosing the appropriate administrator(s) as he deems necessary or convenient in the circumstances.  Section 36 PAO states that:

“36.      Appointment of administrator of intestate’s estate

             Where a person dies wholly intestate as to his estate or leaving a will affecting estate but without having appointed an executor thereof willing and competent to take probate, or where the executor is, at the time of the death of such person, resident out of Hong Kong, or where it appears to the court to be necessary or convenient to appoint some person to be the administrator of the estate of the deceased person or of any part of such estate, other than the person who, if this Ordinance had not been passed, would by law have been entitled to a grant of administration of such estate, the court may, subject to section 25, appoint such person as the court thinks fit to be such administrator, on his giving such security, if any, as may be required under this Part or as the court may direct, and every such administration may be limited in such manner as the court thinks fit.”

10. Further, when it is noted that the terminology employed in our section 36 PAO is a bit different from the equivalent provision in England, namely section 116 Supreme Court Act 1981, the following extracts from two English textbooks supplied by Mr. Bartlett do give some useful hints to this Court in exercising his discretion:

(a)    “(vii)  Discretionary Grants

……

181.  Special circumstances.  No broad rule of law can be laid down as to what are special circumstances enabling the court to pass over a person otherwise entitled to a grant; each case must be decided upon its own merits.  One object which the court keeps in view is the expeditious and economical administration of estates of deceased persons.  Special circumstances are not necessarily limited to circumstances in connection with the estate itself or its administration, but can be any other circumstances which make it necessary or expedient to pass over the executor ……”

(Halsbury’s Laws of England, 4th Edition Re-issue, Volume 17(2) at page 105)

(b)   “Passing over an executor

An executor may be passed over on account of his bad character, attempts to avoid tax, his neglect of his duties, where he has intermeddled and refuses to take a grant, because of his absence abroad, imprisonment, ill-health, unsoundness of mind, incompetence to take probate, disappearance; or where the estate is insolvent.  All these constitute “special circumstances” within the section.”

(Executors, Administrators and Probate, Williams, Mortioner and Sunnucks, Sweet & Maxwell 2002, at page 353 paragraph 26-05)

The Reasons

11. Mr. Bartlett agreed that the Wife did have a prior right than the Daughter to obtain the Grant to the Estate pursuant to rule 21 NCPR.  Hence, burden lies on the Daughter to persuade this Court that the Grant should be issued to her instead.

12. The major complaint of the Daughter was the delay on the part of the Wife for about 6 years without applying for the Grant or taking steps to issue Warning to her.  I respectfully disagree.

(a)       Shortly after the death of the Deceased, the Wife instructed solicitors to apply for the Grant.  At that time, estate duty was still payable to the Government and as such, estate duty clearance papers had to be obtained before one could lodge papers with the Probate Registry.  Bearing in mind IRD’s obligation to protect public revenue as well as judging from the Schedule of Property, in particular 199,900 shares in Technology Interface Limited (TIL) in the amount of $5,441,834.07, eighteen items of debts due by the Deceased for $3,608,893.61 and the rejection of a claim of $1 m by the Wife over the Estate, I am not persuaded that a few years’ effort amounts to delay on the part of the Wife or her then legal adviser.

(b)       Once the estate duty clearance papers had obtained, the Wife did apply for the Grant.  Out of the concern of legal costs, she decided to take up the task on her own.  She faced 2 hurdles, the Caveat lodged by the Daughter and the need for appointment of a co-administrator because the Son was still a minor.  She did lodge a draft Warning for the Court’s approval.  She did inform this Court that she would withdraw that application and filed a fresh one a few months later when the Son would have attained the age of 18.  It explains how the time was taken.

(c)    The parties had tried to communicate and discuss the matter, but regrettably failed to reach any settlement.  The time spent in this respect should be taken into account.

13. Mr. Bartlett also referred me to other factors making the Wife unsuitable to be the administratrix, including the fact that she was residing in PRC, dealings with the Estate (including TIL) over years and personal animosity with the Daughter.  It suffices for me to conclude that these matters are insufficient to persuade me to deprive the Wife of her prior right to administer the Estate.

(a)   It is certainly for the Wife to prove, in her future application for Grant of the Estate, that she is residing in Hong Kong and not simply having a correspondence address in Hong Kong.  Nonetheless, residing outside Hong Kong, even if established, cannot amount to be a factor that this Court should take to refuse the Wife’s application for grant.  Applicants residing outside Hong Kong and/or making application through attorneys are not uncommon.  Usually, the beneficiaries’ position will be protected by the requirement of 2 surety guarantees as per rule 38 (c) and (f) NCPR.

(b)   Dealings with the Estate, short of any evidence of taking personal advantages, are not justification to refuse the Wife to have the Grant.  It is not disputed that TIL constitutes a major part of the Estate.  A private company has to be run in order to survive and preserve its value.

(c)   Personal animosity appears to be two-sided.  It remains to be a neutral factor.

14. Finally, Mr. Bartlett also asked me to appoint the Daughter as the administratrix for the Estate because it was expeditious and economical to do so.  With respect, I disagree.

(a)   She is now legally-aid.  However, there is no evidence before me that DLA will assist her in the application of the Grant as well as administration of the Estate.

(b)    There is also no evidence before me that the Daughter has the necessary resources to hire her own solicitor take up the matter.

(d)    The Schedule of Property issued by IRD is the prima facie evidence of the value of the Estate.  It was prepared by IRD who relied on the information provided by the Wife.  It appears to me that the Daughter has been disputing such information.  Would she continue the process by relying on the Schedule of Property or that new schedule is to be prepared on her own?

(e)    The Wife has decided to take up the application for Grant and administration of the Estate herself.  Though she is not legally trained, I am satisfied that she does have a reasonable ability to handle the matter.  At the hearing, she did briefly described correctly to me the procedures to be taken in the administration of the Estate.

Conclusion

15.  In the circumstances, I order that:

(a)   The Summons filed herein on 12 July 2006 is dismissed.

(b)   The Caveat filed by the Daughter herein on 28 February 2006 shall cease to have effect.

(c)   Letters of Administration in respect of the Estate of Gienger Marvin Leslie is to be granted to Madam Chiong Kam Fong, if entitled to.

(d)   Once the Probate Registry will have issued the Letters of Administration, Madam Chiong Kam Fong shall forthwith give notice to Ms. Kris J. Gienger.

(e)    There is an order nisi that Ms. Kris J. Gienger shall bear the costs of Madam Chiong Kam Fong in relation to the present Caveat Proceedings and Summons filed herein on 12 July 2006 including all costs reserved, to be taxed if not agreed.

(f)    Ms. Kris J. Gienger’s own costs are to be taxed in accordance with Legal Aid Regulations.