CHU WAI CHUN JACKIE v. LAM SIU KEI

HCAP 3/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 3 OF 2009

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BETWEEN

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REASONS FOR DECISION

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1. By a summons dated 30 March 2010, the Defendant sought an order under Order 33 for the trial of the following preliminary issue: whether the Plaintiff was the natural and lawful daughter of Chu Sun [“the Deceased”]. The summons was dismissed by the Master on 31 March 2010. The Defendant appealed. This court dismissed the appeal on 26 May 2010. Here are the reasons for my decision.

2. This is a probate action.  The Plaintiff seeks a grant of letters of administration as daughter of the Deceased in respect of his estate.  The Plaintiff also asks the court to pronounce against an alleged Will dated 19 January 2006 [“the Will”] on the ground of lack of testamentary capacity.  On the other hand, the Defendant as the executrix named in the Will, seeks to uphold the Will.  But, as the pleadings stand, there is no counterclaim by the Defendant seeking to pronounce for the validity of the Will.  This might be an oversight.

3. The Defendant disputed the status of the Plaintiff.  It is alleged at paragraph 3(b) of the Defence that though the Plaintiff had been treated by the Deceased as his daughter, the Defendant denied that she is the natural or lawful daughter of the Deceased.

4. Pleadings were closed in April 2009.  Discovery and exchange of witness statements have taken place.  Pursuant to the directions of the Master, a report on mental capacity of the Deceased has been obtained from the Single Joint Expert.  The case will come back to the Master on 28 July 2010 for another Case Management Conference. 

5. Whilst there might be some loose ends in respect of the preparation of some of the evidence, based on what I had been told by counsel, the state of readiness for trial in respect of the validity of the Will is on par with the parentage issue.  If parties were diligent in their preparation, I do not see any reason why all the necessary interlocutory applications cannot be disposed on or before 28 July and the whole case could be set down for trial soon thereafter. 

6. By now, substantial costs in respect of the preparation on all the issues have been incurred.  Further, as accepted by Mr Shieh SC, this is not a complicated trial and having a trial of all the issues in one go will not substantially increase the costs as compared with the trial of the preliminary issue alone.  On the contrary, if there were to be a split trial, and if the determination at the trial of the preliminary issue were in favour of the Plaintiff, there would have to be a second trial on the issue as to the validity of the Will.  Costs will no doubt be increased.  Further, there is a risk of appeal regarding the determination of preliminary issue which could delay the final resolution of the matter.

7. As a matter of case management discretion, guided by the proper approach for ordering split trial as laid down in cases like Telford Development Ltd v Shui On Construction Co Ltd  [1990] 2 HKC 110 and Mai Gou v Mak Chik Lun [2001] 3 HKLRD 248, it is difficult to see how it can be appropriate to order a trial of preliminary issue at this stage. 

8. Mr Shieh contended that the parentage issue is a discreet and distinct issue and it is a knock-out blow by the Defendant.  He also relied on Liquidation Committee of Foshan Hongda Development v East Legend Investment Ltd  [2009] 1 HKLRD 169 and contended that since the parentage issue concerns the locus of the Plaintiff to seek the relief she sought it should be tried as a preliminary issue.

9. In that case, based on Russian Commercial & Industrial Bank v Le Comptoir d Escompte de Mulhouse [1925] AC 112, Airways Ltd v Bowen [1985] BCLC 355 and Kammy Town Ltd v Super Glory Corp Ltd HCA 3524 of 2003, Cheung JA formulated several principles concerning a challenge based on lack of standing by a plaintiff to commence an action at para.18,

(a)	the challenge cannot be raised by way of defence;
(b)	it must be raised at the outset or when it comes to the attention of the court or of the defence in the course of the proceedings;
(c)	once the issue has been raised it must be decided;
(d)	it would be wrong to allow the action to go on without deciding the issue of standing: this is because the defendant will not have a further chance to challenge the issue;
(e)	once it is clear that the action was improperly constituted it must be brought to an end either by way of dismissal, striking out or stay.

10. His Lordship explained the rationale of the principles at para.21,

“The crux of the principles on the challenge of the plaintiff’s standing to sue is the requirement of an early determination of the issue. This makes perfect sense because otherwise the plaintiff would be incurring substantial costs in the preparation of the case for trial which may be totally wasted if the issue was decided against him.”

11. The relevant factual background and procedural history in respect of dispute on standing to sue in that case were set out at paras.7 to 16 of the judgment.  It should be noted that initially the action was commenced in the name of the company.  The defendant applied to strike out the claim on the basis that the company had been struck off and lost its status as a legal entity.  The plaintiff applied for the substitution of the Liquidation Committee as plaintiff.  After substantive evidence had been filed, including expert evidence on PRC law, the matter was resolved by a consent order allowing the substitution and the strike out application was withdrawn.  The Court of Appeal was of the view that in so doing, the defendant had accepted the standing of the plaintiff to sue, see para.19. 

12. If one examines the authorities cited by Cheung JA, they are all cases about authority to sue.  The leading case is Russian Commercial and Industrial Bank v Comptoir d’Escompte de Mulhouse [1925] AC 112.  The action was pursued in the name of a bank which had been taken over by the Soviet Government.  The defence challenged the authority of the London manager to sue in the name of the bank.  The House of Lords held that it was not open to the defendant to raise by way of defence the objection that the manager had no authority to bring the action in the name of the bank.  At p.130, Viscount Cave said,

“My Lords, I do not think that it is open to the defendants to raise this question by way of defence to the action. If the defendants desired to dispute the authority of Mr Jones to commence these proceedings in the name of the plaintiff company, their proper course was to move at an early stage of the action to have the name of the company struck out as plaintiff and so to bring the proceedings to an end.”

13. Airways Ltd v Bowen [1985] BCLC 355 and Kammy Town Ltd v Super Glory Corp Ltd HCA 3524 of 2003, 14 Jan 2005, are cases dealing with the same type of issue, viz. the authority of the person who gave instructions to sue in the name of a company.  Since the companies, whose right was being pursued, were the plaintiffs in these cases, the challenge on authority had nothing to do with the defence.  So long as the company remained as a party, the defence had to plead to the substantive claims. 

14. Mr Shieh submitted that Foshan Hongda extended that principle to other scenarios where the locus of a plaintiff is being challenged.  I do not agree.  In my view, on true analysis, Foshan Hongda was also a case concerning the authority to pursue a claim of the company.  The only difference is that instead of suing in the name of the company (which initially was the case), by the consent of the parties (which led to a bar against the defendant from reviving any challenge to the authority of the Liquidation Committee) and no doubt in the light of the expert evidence on PRC law (as set out in para.12 of the judgment), the action was continued in the name of the Liquidation Committee.  It was not suggested that the Liquidation Committee was pursuing a claim otherwise than a claim of the company.  The use of the expression “standing to sue” in the judgment should be understood in that light.  And it was on that basis that the Court of Appeal held that the challenge to the Liquidation Committee’s authority to pursue the company’s claim could not be raised by way of defence.

15. Properly understood, I do not think Foshan Hongda laid down a general proposition that whenever the locus standi of a plaintiff is in dispute, the point cannot be raised by way of defence and instead it has to be determined either by way of a strike out application or a determination of preliminary issue.

16. In the context of probate litigation, in my experience, issue of parentage or similar issues on relationship (e.g. whether a party was validly married to the Deceased, whether a party is a lawfully adopted child) are frequently raised.  If Mr Shieh were correct in his contention, trial of preliminary issues has to be ordered in such cases.  However, I have not come across such a case and Mr Shieh was unable to refer me to a decision to such effect.  

17. I have never heard of a suggestion that a dispute as to parentage (or the validity of marriage between a party and the Deceased) cannot be raised by way of defence in a probate action.  As a matter of fact, Mr Shieh’s client pleaded the issue of parentage by way of defence.  

18. A challenge to parentage is not a challenge on the authority of the Plaintiff to sue.  It is not covered by the principles stated in Foshan Hongda. 

19. For these reasons, I dismissed the appeal with costs.