WU SHUK CHUN v. KWONG OI LIN AND OTHERS

HCMP 2301/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2301 OF 2006

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D E C I S I O N

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Introduction

1.  This is an application by a beneficiary for directions for administration of an estate.

Background

2.  I refer to the background of the present proceedings as set out in paragraphs 2 to 11 of the Decision herein handed down by me on 23 October 2007.

3.  To reiterate briefly, the Deceased died testate on 5 December 2001 leaving his Estate to be distributed according to his Will, including a whole building to be divided by his concubine and children.  Probate was granted to the 1^st and 2^nd Defendants on 30 October 2003.  However, among others, due to the problem of the drafting of a Deed of Mutual Covenant, each individual floor of the Building has not been conveyed to the beneficiaries under the Will.

4.  On 7 November 2006, the Plaintiff commenced the present proceedings.  Her application for pre-emptive costs order was not successful and dismissed by me on 23 October 2007.  Subsequent to that, she issued a further summons for other directions and amended the Originating Summons.

“2.  The 1^st and 2^nd Defendants do within 14 days from the date of the Order to be made herein furnish full and proper audited particulars and accounts of the Estate of WOO Kin Hang (胡乾鏗) alias WU (or WOO) Kin (胡乾), now deceased (“the Deceased”), and the investments thereof together with originals or true copies of all relevant documentary evidence in support including but not limited to all relevant invoices and receipts to the Plaintiff’s solicitors and verify the same by affidavit pursuant to Section 56 of the Probate and Administration Ordinance (Cap. 10) and/or otherwise and serve such affidavit on the Plaintiff’s solicitors;

3.  The 1^st and 2^nd Defendants do within 14 days from the date of the Order to be made herein produce a draft Deed of Mutual Covenant for the building known as “No. 277 Castle Peak Road” (“the Building”) and serve the same on (1) the Plaintiff’s solicitors; and (2) the 3^rd to 12^th Defendants for their comments and consideration;

4.  Costs of this Summons be provided for.”

(Summons filed on 23 November 2007)

“1.  An Order that the 1^st and 2^nd Defendants do within 14 days from the date of the Order to be made herein exhibit by an affidavit filed in this Honourable Court and served on the Plaintiff’s solicitors a true and perfect inventory and account of the movable property of the Estate of WOO Kin Hang (胡乾鏗) alias WU (or WOO) Kin (胡乾), now deceased (“the Deceased”) and the investments thereof together with true copies of all relevant documentary evidence in support including but not limited to all relevant invoices and receipts and verify the same by the said affidavit pursuant to Section 56 of the Probate and Administration Ordinance (Cap. 10) and/or otherwise.

2.  An Order that the 1^st and 2^nd Defendants do within 14 days from the date of the Order to be made herein exhibit by an affidavit filed in this Honourable Court and served on the Plaintiff’s solicitors a progress report of the vesting of the immovable property of the Estate of the Deceased together with true copies of all relevant correspondence, stating the expected date of completion of the vesting, and verify the same by the said affidavit.

3.  Further or in the alternative, an Order that the 1^st and 2^nd Defendants do within 14 days from the date of the Order to be made herein assent and vest in the Plaintiff the property known as “Fourth Floor, No. 277 Castle Peak Road”.

4.  Further or in the alternative, administration of the Estate of the Deceased.

5.  Further and/or other reliefs and/or directions.

6.  That provision may be made for the costs of this application.”

(Amended Originating Summons filed on 3 April 2008)

5.  To sum up, the Plaintiff asks for:

(a)  an account of the Estate,

(b)  a progress report on the administration: past, present and future,

(c)  a draft DMC,

(d)  other relief as the Court deems fit, and

(e)  costs.

Discussion

6.  Before dealing with the relief sought by the Plaintiff, I further set out the following facts of the proceedings.  They are particularly relevant for the purpose of resolving the parties’ disputes as well as exercise of the Court’s discretion in the matter.

(a)  The Executors have been trying to effect specific gifts to the beneficiaries.  Up to now, it has been more than 5 years since the issuance of probate.  However, due to a number of difficulties, the conveyance is still pending.

(b)  It is not a case that the Executors are taking advantage of or doing something bad to the beneficiaries.  Interim measure has been taken to the effect that each of the beneficiaries is enjoying the relevant floor.  To that extent, the beneficiaries are not complaining.

(c)  Mere physical possession, short of conveyance of legal title, is insufficient.  The Plaintiff has resorted to the present proceedings to solve her concern.

(d)  All other beneficiaries were joined and have been aware of the proceedings.  They want the conveyance, but wish to take neutral position.  They also do not want to spend or waste costs.

(e)  Suggestion to look for the assistance of conveyance expert was made by me when I dealt with the present proceedings in 2007.  It has not been done although the Executors did try to talk to the beneficiaries on the way ahead.

7.  With these facts in mind, I now attempt to answer the Plaintiff requests.

Account?

8.  Both Counsel did not have much dispute over the executor’s duty to account.  It is well spelt out under the grant issued as well as section 56 Probate and Administration Ordinance (Cap. 10) (“PAO”).  The parties’ disputes turn narrowly on (a) when the Executors should confirm the accounts on oath and (b) if the accounts need to be audited.

9.  To these, I prefer the view of Mr. Vincent Poon, Counsel for the 1^st to 3^rd Defendants.  The wordings of section 56 PAO ask the executors to

“… when lawfully required so to do, exhibit, by affidavit filed in the court, a true and perfect inventory and account of the movable and immovable property of the deceased …”

Hence, generally speaking, a personal representative is required to produce a true and correct account, but no more.  Only if this Court will ask him to do so as an exhibit of an affidavit, he needs not do so.

10.  As to the auditing of the account, again, as a general proposition, I see no legal basis for insisting on the so doing by the personal representative.  While I do not intend to limit the Court’s discretion for ordering it in suitable circumstances, the Plaintiff has not been able to satisfy me why an audited account is necessary in the circumstances.

Progress report/draft DMC?

11.  In my view, the Plaintiff and all beneficiaries are aware of the progress of administration so far, albeit not entirely satisfactory.  Hence, even though Mr. Kenneth Lam, Counsel for the Plaintiff, might be able to satisfy me with the necessary legal basis, it will only be a waste of costs for ordering a progress report for administration in the past and for the present moment.

12.  On the other hand, as to the future progress report and the draft DMC, I can see that the Plaintiff is targeting at the administration of the Estate.  I can also see that everybody wants to see the administration being completed.  How is it going to be done then?  It is primarily the job of the Executors to be co-operated by all the beneficiaries.  To these requests, Mr. Lam questioned the legal basis as well as the usefulness of the same.  He further suggested that the individual floors might be conveyed to the beneficiaries without a DMC.

13.  In relation to progress, I take the view that the Executors shall see and use their best endeavours to complete the administration.  They indeed agreed the Court with the same in their application for grant.

14.  At the hearing, I discussed with both Counsel as to whether this Court should set up a timetable for the Executors.  It appears that such an idea is not objectionable although parties did raise some of their concern and difficulties.

15.  Upon thoughts, I will draw up a preliminary timetable for the parties.

(a)  Within 3 months from the date of Decision herein, the Executors shall arrange necessary finance for the purpose of obtaining a Senior Counsel’s opinion advising on how the Estate is to be distributed, including in particular the conveyance of the specific floors to the beneficiaries.

(b)  Within a further period of 3 months, the Executors shall obtain such Senior Counsel’s advice.

(c)  Depending on and subject to the advice to be rendered, the Executors shall perfect the specific gifts and complete the administration within 6 months thereafter.

(d)  All parties are at liberty to apply to vary and/or apply for further directions.

16.  I draw up the above for the parties because of the followings.

(a)  Years have been passed and each party has his own concern and agenda, but they have to co-operate and work together or that the administration can never be completed.  I hope that by such preliminary timetable, I can at least help them to get back on the right track.

(b)  With the limited information and knowledge, I opine that an advice from a Senior Counsel as to the way ahead is necessary.  Looking at the specific gifts as stated in the Will, a layman may find no particular problem.  Nonetheless, from the point of probate law as well as conveyance procedures, it is more complicated than the drafter of the Will can perceive.

(c)  The Executors told me that he could not fund the costs of a Senior Counsel.  Perhaps, it is a difficult question. However, it is something that has to be resolved. I further believe that it is something that can be resolved by the parties, failing which, a direction by this Court. I have limited information with me because only the Executors told me his position, but not others. Nonetheless, prima facie, the costs are reasonable expenses to be incurred in proper administration of the Estate. All beneficiaries should then contribute a fair share.  As to the difficulty of determining a “fair share”, I will leave the matter in the good hands of the parties for the time being, save to urge them to take a fair and reasonable attitude towards it.  Failing an agreement, the Executors should bring application to the Court for further directions.

(d)  Only a preliminary timetable can be given at this juncture because no one knows what is going to happen.  Hopefully, a DMC can be drafted and individual floors (and common parts) will be distributed.  However, if for whatever reason, it cannot be done, perhaps, as a last resort, the Building would have to be sold with proceeds distributed.

Other relief

17.  Mr. Lam asked me to adjourn all other relief sine die pending development of the matter.  Mr. Poon told me that he only agreed to this because there might not be sufficient time to deal with them.  Having given the parties the above preliminary timetable under the claim for “other reliefs/directions”, I believe that there is no need to adjourn these relief any further.

Order/Directions

18.   To summarize, I will order and direct the followings. 

(a)  The 1^st and 2^nd Defendants shall within 30 days from today file and serve with the Plaintiff and all other Defendants a true and correct account of the Estate, verified on oath.

(b)  Within 30 days thereafter, the Plaintiff and the 3^rd to 12^th Defendants are at liberty to inspect all the supporting documents of the said Account.

(c)  Future conduct of the administration of the Estate as per paragraphs 15(a) to (d) above.

Costs

19.  Parties won and lost some of the issues before me.  I see fit to make an order nisi that each party shall bear his own costs.

20.  As to the costs on 23 June 2007, I order that costs of the same be borne by the solicitors for the Plaintiff to the 1^st to 3^rd Defendants, to be taxed if not agreed.

Others

21.  Finally, I should also mention the summons taken out by the Plaintiff on 1 August 2008.  It was only issued as a “slip-in” summons.  To start with, affidavit evidence thereof has not been completed.  There is also insufficient time to deal with it.  In light of the above timetable drawn, I will simply adjourn it sine die with liberty to restore.