CYM v. LSP AND ANOTHER

FCMP 178/2020

[2021] HKFC 125

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 178 OF 2020

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JUDGMENT

(Leave to apply out of time for financial provision under IPFDO)

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1.  This is an application made by the Applicant; the lawful wife of the Deceased (“A”) for leave to apply out of time for financial provision from the estate under s3(i) of the Inheritance (Provision for Family and Dependents) Ordinance Cap 481 (“Cap 481”).

Undisputed facts

(1)     A and the Deceased were married on 4 February 1981 and counting up to the time of their separation, the marriage lasted for 35 years;

(2)     Two children, a son (“the son”) and a daughter (“the daughter”) were born in wedlock and they are 39 and 35 respectively;

(3)     A was the lawful wife of the Deceased despite their separation since 2016;

(4)     Two properties had been held by A and the Deceased as joint tenants prior to 9 January 2019, namely 15D (“the 1st Property”) and 2B (“the 2nd Property”) both in Yue Tin Court, Shatin (collectively called “the two properties”);

(5)     The Deceased executed 3 documents on 9 January 2019 i.e two Notices of Severance severing the joint tenancy of the two properties from A and a Will making no financial provisions for A;

(6)     In the Will, the Deceased named the two Respondents (“Rs”) as executrixes of his estate.  The 1^st Respondent (“R1”) is the elder sister of the Deceased and the 2^nd Respondent (“R2”) is the niece of the Deceased i.e. the daughter of the 1^st Respondent;

(7)     The Deceased passed away on 12 September 2019;

Documents submitted for the purpose of this application

(i)     Affirmation of the Applicant dated 10 November 2020 (“A’s Affirmation”)[1];

(ii)     Affirmation of the daughter dated 21 January 2021 (“the daughter’s Affirmation”)[2];

(iii)    Affirmation of R1 dated 24 December 2020 (“R1’s Affirmation”)[3];

(iv)    Affirmation of R2 dated 24 December 2020 (R2’s Affirmation”)[4].

The Law

“3. Application for financial provision from deceased’s estate

(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—

(i) the wife or husband of 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)—

(a) in the case of any application made—

(i) by virtue of subsection (1)(i) by the husband or wife of the deceased (except where the marriage with the deceased was the subject of a decree of judicial separation and at the date of death the decree was in force and the separation was continuing); or

….

means such financial provision as it would be reasonable in all the circumstances of the case for such a person to receive, whether or not that provision is required for his or her maintenance;

….

4. Powers of court to make orders

(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;

(c) an order for the transfer to the applicant of such property comprised in that estate as may be so specified;

(d) an order for the settlement for the benefit of the applicant of such property comprised in that estate as may be so specified;

(e) an order for the acquisition out of the property comprised in that estate of such property as may be so specified and for the transfer of the property so acquired to the applicant or for the settlement thereof for his benefit.

….

6. Time-limit for applications

An application for an order under section 4 shall not, except with the permission of the court, be made after the end of the period of 6 months from the date on which representation with respect to the estate of the deceased is first taken out.”

2.  In this case, the time limit to take out an application under section 4 was 6 months from the date of the Grant on 20 March 2020.  As the Originating Summons was issued on 16 November 2020, the delay was therefore 58 days.

3.  It is clear that under section 6 of Cap 481, leave of this Court is required.

Legal Principle

4.  In LZX v WYL (provision: family and dependents) [2012] 5 HKLRD 29, PFCJ Bebe Chu (as she then was) summarized the guidelines on this point in paragraphs 30 – 32:

“30 .I have been referred two cases by Mr. Lui, Counsel for Lan and the Father, where the English court had to consider whether leave should be granted. In the first case of In re Salmon, decd. [1], Sir Robert Megarry V.-C. listed out some guidelines:

“First, the discretion is unfettered. No restrictions or requirements of any kind are laid down in the Act. The discretion is thus plainly one that is to be exercised judicially, and in accordance with what is just and proper. Second, I think that the onus lies on the plaintiff to establish sufficient grounds for taking the case out of the general rule and depriving those who are protected by it of its benefits. Further, the time limit is a substantive provision laid down in the Act itself, and is not a mere procedural time limit imposed by rules of court which will be treated with the indulgence appropriate to procedural rules. The burden on the applicant is thus, I think, no triviality: the applicant must take out a substantial case for it being just and proper for the court to exercise its statutory discretion to extend the time……..In my view, a third point is that it must be material to consider how promptly and in what circumstances the applicant has sought the permission of the court after the time limit has expired. … ...The whole of the circumstances must be looked at, and not least the reasons for the delay, and also the promptitude with which, by letter before action or otherwise, the claimant gave warning to the defendants of the proposed application….….This leads to a fourth point. ..….I think that is obviously material whether or not negotiations have been commenced with the time limit; for if they have, and time has run out while they are proceeding, this is likely to encourage the court to extend the time……Fifth, I think that it is also relevant to consider whether or not the estate has been distributed before a claim under the Act has been made or notified. …….Sixth, I think that it is relevant to consider whether a refusal to extend the time would leave the claimant without redress against anybody.. ” [2] The Vice Chancellor also made it clear that the six considerations he stated were not exhaustive.

31. The second case Re Dennis (Deceased)[3] followed shortly after the above case. In this case, Browne-Wilkinson J. referred to the above guidelines laid down by the Vice Chancellor, but pointed out that an earlier decision of the Court of Appeal in Re Stone (deceased) [4] was not drawn to the attention of the Vice Chancellor in Re Salmon (deceased). In Re Stone (deceased), the Court of Appeal allowed an appeal by a widow and enabled her to bring her application out of time. Lord Denning MR had said in the course of giving judgment that if the widow “has an arguable case or, as we say in the Ord. 14 cases, if there is a triable issue, then permission ought to be given’. Browne-Wilkinson J was thus of the view that in addition to the 6 guidelines laid down by the Vice Chancellor in In re Salmon, decd., the applicant would also need to demonstrate that he had an arguable case, a case fit to go to trial, and that in approaching that matter, the court’s approach would be rather the same as when considering whether a defendant ought to have leave to defend in proceedings for summary judgment.

32. It is clear that the Court has the unfettered discretion to grant the permission, and the discretion is to be in accordance with what is just and proper.  The burden of proof is on W to establish there are sufficient grounds to grant the permission and the burden is not trivial.”

5.  Mr Cheng representing the Applicant helpfully summarized the guidelines in his submission: -

(1)     The court had an unfettered discretion to grant such leave, which discretion was to be in accordance with what was just and proper;

(2)     The burden of proof was on the applicant to establish that there were sufficient grounds to grant the permission and such burden was not trivial;

(3)     The whole of the circumstances had to be looked at, including the length and reasons for the delay;

(4)     If negotiations had been commenced within the time limit, this was likely to encourage the court to extend time;

(5)     It was relevant whether the estate had been distributed before a claim had been made or notified;

(6)     It was also relevant to consider whether a refusal to extend time would leave applicant without redress against anybody; and

(7)     The applicant needed to demonstrate an arguable case to fit to go to trial.

A’s case

6.  A said in her Affirmation,

“21….I wish to explain that I was not aware of the grant of the Probate until about 9 August 2020 when the 1^st Respondent notified me and the daughter by way of Whatsapp that she had obtained the grant of Probate. However, I have deleted the Whatsapp message from my phone and I was unable to retrieve the same….

22. On or about 21 August 2020, I have received a formal demand from the 1^st Respondent through her solicitors, Messrs Paul W. Tse (“PWT”). Since then, I have immediately sought legal advice and handle the matter promptly. There have been exchanges between our respective solicitors with a view to reach an amicable settlement without resorting the matter to this Honourable Court but was in vain….”

7.  In A’s Affirmation, she asked for an Order in terms of her application and she said,

“23 Given that:-

(1) I am not aware of the grant of the Probate until about 9 August 2020 (i.e. around 1.5 months prior to the expiry of the 6-month prescribed time limit);

(2) There have been negotiations taken place;

(3) The 2^nd Property (being the major part of the estate of the Deceased) and the 1^st Property (had it not been excluded from the estate of the Deceased) had not been distributed;

(4) The length of delay is short;

(5) I have a reasonable chance of success in obtaining financial provision as aforesaid; and

(6)   There is no prejudice to the 1^st and 2^nd Respondent for this Honourable Court to grant permission for me to make application for financial provision out of time.”

Discussion

When did A know about the grant of Probate?

8.  Mr Lau representing Rs submitted,

“4(1) A sat idly after the Deceased passed away on 12 September 2019 and even after the Probate was granted to Rs. A ought to have constructive notice of the Probate as it was duly registered against two properties she is currently holding as tenants-in-common with the Deceased.

(2) Since about mid-June 2020, Rs and Madam Lee had been giving actual notice to A and her children about the Probate via phone calls, Whatsapp messages and legal correspondence.  However, Rs and Madam Lee were met with silence and/or hostility from A and her children.”

9.  Mr Cheng on the other hand submitted that A and the daughter were only informed of the Grant of Probate on 9 August 2020.  The daughter immediately replied to R1 on the same date.  It was alleged that Madam Lee called the daughter to arrange for a meeting with R1 and R2 to discuss the matters relating to the Probate, but Mr Cheng submitted that the contemporaneous communication did not support the allegation[5].

10.  I agree.  In R1’s Affirmation, she said,

“In or about mid-June 2020, Madam Lee (on our behalf) called the daughter to arrange a meeting between Rs and the daughter to discuss the matters in relation to the Probate, but to no avail.[6]”

11.  However, the exhibit, i.e. the whatsapp message sent by Madam Lee to the daughter on 16 June 2020, only read, “Hi你們兩兄妹有時間出嚟見面啦….[7]”

12.  There is no evidence to suggest that Madam Lee had arranged a meeting to discuss the matters in relation to the Probate as alleged by R1.

13.  With regard to the Notices of Severance which were duly registered in the Land Registry against the two properties, I disagree with Mr Lau that A ought to have constructive notice of the severance.  Despite what is said at the beginning of the two Notices i.e. To: A, both Counsel confirmed to me that the Notices had not been served on her.

14.  Section 8(1) CPO provides that a joint tenancy may be severed at law only by (i) a notice served by a joint tenant on the other joint tenants; or (ii) an instrument.

15.  According to the Ordinance, it was necessary for the Notices to be served on A.  If they were not served, how would A come to know that they were registered against the two properties?

16.  I therefore find that A only received notice of the grant of the Probate on 9 August 2020 by way of whatsapp. 

Have there been negotiations taking place

17.  In the daughter’s Affirmation, she said,

“…7. When the Applicant was notified by the 1^st Respondent about the Probate on 9 August 2020, the Applicant called me and I went to see her immediately on the same day. The Applicant had an emotional breakdown and deleted the Whatsapp message on her mobile phone that the 1^st Respondent sent her in front of me…[8]”

18.  It seems that there is no dispute that A had deleted her whatsapp message because R1 said in her Affirmation that,

“22. On 9 August 2020, I notified the Applicant about the Probate. I also inform the Applicant of my intention to sell the Deceased’s half share of each of the 1^st and 2^nd Properties, and enquired whether she would be willing to sell her half share in each of the properties as well, but there was no reply…

23.  Shortly thereafter, the Applicant also quit all Whatsapp groups with me and my daughter i.e. 2^nd Respondent…”

19.  R2 also confirmed in her Affirmation that A had quitted all whatsapp groups with Rs on 9 August 2020 and she also exhibited the copies of records of the Applicant quitting her whatsapp groups.

20.  I therefore accept that A had deleted the whatsapp message immediately.

21.  From the whatsapp messages exhibited with R2’s Affirmation, I can see that the first message was sent by R2 to the daughter on 10 September 2019, notifying her of the Deceased’s condition as he was on his deathbed.  The daughter however replied,

“知道。我媽睇曬你哋嘅訊息留意, 成個人崩潰左, 佢有精神病, 而家癲得好厲害, 再咁落去佢會做傻事, 我冇法子離開佢一步, 請不要再告知我媽[9]”

22.  On 26 and 27 September 2019, both Rs told the daughter at which funeral parlor the Deceased’s funeral would be held (設靈) and asked whether the son and the daughter would attend, to which the daughter said ‘not likely’.

23.  The whatsapp message sent by R1 to A on 9 August 2020 read,

“The Deceased 所有遺產包括動產不動產全歸本人擁有。

其中不動產包括兩個物業分別各佔50%業權

本人現以執行人身份與你商討物業分配事宜

Property 1:

Property 2:

就上述業權, 本人無意繼續持有, 故現向你提出把兩個物業全部出售, 扣除一切費用開支後, 所得之金錢各分一半。

如2020年8月20日前得不到任何回覆, 本人名下之50% 業權將會根據香港法例自行處理.[10]”

24.  In reply, the daughter said,

“希望你沒有發給媽

她的狀態無法接受這種事

一切事由我去處理, 想什麼時候請告訴我

她一點也不知道2層樓被分去, 求你們不要告訴他, 她的精神病已越來越嚴重[11]”

25.  On 10 August 2020, the daughter sent a whatsapp message to R1, which said,

“我真係唔知你們想怎樣，這頭官方地發我們通知，那頭卻不讓哥跟你們對話。想必你們覺得我們只想著2層樓的價值，才快快跟你們見面。

你們錯了，這些年來我哥所在意，只有媽的精神狀態，她的病需要時間去休養，你們卻一次又一次的到她發瘋，你好不容易用上了一年的時間令她可再一次安睡，你們成功了，她又失常了。現在，求你們也好，認為我們是什麼也好，我們從不稀罕金錢，物業，我們只想媽可以在自己的單位內寧靜的度過將來的日子。只要你們不再糾纏媽，要賣樓，請賣，我們只想買回一個單位的業權。其他事，不想再糾纏下去。[12]”

26.  On 11 August 2020, the daughter again sent a whatsapp message to R1, stating,

“如果見面的答案也只是按市價出售業權，看來沒有見面的需要[13]”

27.  Then, on 20 August 2020, the daughter sent a whatsapp message to R1 asking,

“是否所有事宜只接受媽的處理和回覆?”

28.  R1 did not reply to any of the said whatsapp messages.

29.  Mr Lau submitted that as Rs heard nothing from A, Rs decided to issue a letter through their solicitors to press for a response[14].

30.  On 21 August 2020, PWT issued a letter (“PWT’s 1^st letter”) to the son stating that Rs intended to sell the 1^st and the 2^nd Properties.

31.  On 7 September 2020, R1 sent a whatsapp message to the daughter explaining why the legal letter was not sent to A, saying it was purely by reason of the daughter’s repeated requests that the matter should not draw A’s attention due to her mental issue[15].

32.  On 26 August 2020, the daughter sent a whatsapp message to R2 which said,

“Hello,

我想盡快將事情處理，你們現在想怎樣辦，請告訴我。

我們便按著處理，好嗎?”

33.  R2 did not reply to the whatsapp message.

34.  On 31 August 2020, the daughter sent a whatsapp message to R1 saying,

“我們想盡快將事情處理, 你們現在想怎樣辦, 請告訴我[16]”

35.  R1 did not reply to the whatsapp message either.

36.  Mr Cheng submitted that since Rs repeatedly refused to reply to the daughter’s whatsapp messages, A considered it necessary to engage a lawyer to represent them in this matter.  Her lawyer (“KMLL”) therefore sent a letter of reply to Rs’ lawyer on 4 September 2020 stating that they had instructions to act for A and asked for 14 days to give substantive reply to Rs’ request.

37.  Mr Lau on the other hand submitted that Rs’ position was made clear in their previous correspondence and in PWT’s 1^st letter, it was therefore pointless for the daughter to ask the obvious in her whatsapp messages to R1 on 26 August 2020 (你們現在想怎樣辦, 請告訴我)[17] and to R2 on 31 August 2020 (你們現在想怎樣做請告訴我)[18] respectively.  This explains why Rs did not reply to the daughter’s messages.  Mr Lau also drew my attention to the whatsapp message that R1 sent to the daughter on 7 September 2020 (信的內容很清楚列明我的意願! 請盡快回覆我們或發信之律師事務所, 否則我們會按律師事務所的信件內容處理。)

38.  With the greatest respect, I disagree that because of the content of the legal letter, R1 was justified in ignoring the daughter’s repeated whatsapp messages as to the way forward.  There is no dispute that A has been having some mental issue.  In my view, the daughter has only been trying to resolve the matter amicably.  Her intention was made known as early as 10 August 2020, the day after A learnt of the grant of Probate.  As the matter concerned the daughter’s late father and her mother, I am of the view that the daughter, being a close relative of R1, is perfectly entitled to try to resolve the matter without lawyers getting involved.

39.  In R1’s Affirmation, she said,

“On the same day, i.e. 9 August 2020, I also notified the daughter of the Proposal.  Amongst other things, the daughter told me that she would handle all matters on behalf of the Applicant (“一切事宜由我去處理, 想什麼時候請告訴我”), and as such, I treated the daughter as the point of contact for all matters in relation to the Probate.”

40.  In my view, given that R1 acknowledged the daughter as the point of contact for the Probate matters and the daughter replied to R1 immediately on the date they received the grant of probate on 9 August 2020, the fact that R1 had repeatedly ignored the daughter’s whatsapp messages was precisely the cause of the delay in A’s Cap 481 application.

41.  Judging from the above exchange, I accept that the delay was caused by R1’s non-response to the daughter’s whatsapp enquiries. I also accept that the daughter’s whatsapp messages for R1 and R2 constitute negotiation before the statutory time-limit.  Furthermore, I  agree with Mr Cheng that the letter from KMLL dated 4 September 2020 was issued within the statutory time limit under section 6 of Cap 481.

Is the length of delay unreasonable and the reasons thereof

42.  Once KMLL was engaged, I agree that the matter became complicated. 

43.  On 22 September 2020, PTW sent a letter to KMLL to chase them up for a reply.

44.  On 25 September 2020, KMLL sent out a 4-page letter together with a one-page Schedule to PWT.  In the letter, KMLL alleged amongst other things that the Notice of Severance of the 1^st Property might constitute an alienation.  It said,

“Since the alienation of the 1^st Property have not been removed by the Housing Authority, the Notice of Severance of the 1^st Property shall be void under Section 17B of the Housing Ordinance (Cap 283).

Accordingly, the Notice of Severance of the 1^st Property shall be set aside and, by principle of survivorship, our client shall become the sole owner of the 1^st Property as sole surviving joint tenant thereof.”

45.  In the said letter, KMLL asked for:-

(i)     An Order that the Notice of Severance of the 1^st Property be set aside on the ground that it was void under section 17B of the Housing Ordinance;

(ii)     A Declaration that A is the sole surviving joint tenant of the 1^st Property by operation of the principle of survivorship;

(iii)     An Order that leave be granted to A to make the application for financial provision under the Ordinance out of time; and

(iv)     An Order that R1 shall pay A a lump sum….”

46.  KMLL also imposed a deadline of reply by the close of business on Tuesday 29 September 2020, to which Rs’ legal representative immediately replied on the same date, saying, “As the matter is not a simple one, a reply within 2 working days is not possible.  Please ask your client to withhold any proceedings until 13 October 2020.[19]”

47.  In my view, even Rs’ legal representative acknowledged that the matter is not a simple issue.

48.  Mr Lau submitted,

“5(2) Even if PWT’s correspondence with KMLL after 25 September 2020 could be considered as on-going negotiation, any hope of resolving the matter ended on 5 October 2020, when PWT unequivocally rejected A’s offer for Rs (PWT’s Last Letter[20]”). After PWT’s Last Letter, A sat on the matter for another 42 days before taking out the Originating Summons for no explicable reasons.”

49.  Mr Cheng on the other hand submitted that in PWT’s Last Letter, despite their stance that all intended claims of A were unmeritorious, Rs indicated that they would consider any realistic request made by A[21].

50.  In the last paragraph of PWT’s Last Letter, after it rejected A’s claims, it stated,

“Having said that, we are instructed by our client that, in order to save costs, they will consider any realistic request bearing in mind that the Deceased and your client had separated from each other for more than 3 years prior to his death.”

51.  Mr Cheng therefore submitted,

“31. As evidenced by the communications between the daughter and Rs, and the correspondences between A’s solicitors and Rs’ solicitors, as set out above, it is clear that the parties were all along in the course of negotiation.

32. Having considered the position of Rs and their conducts, A was of the view that the dispute could not be resolved by way of settlement.  She then instructed A’s solicitors to commence the present proceedings and the proceedings under DCMP 3500/2020 against Rs.”

52.  I agree.  As I have already found that A only received notice of the grant of Probate on 9 August 2020 and Rs had ignored most of the daughter’s whatsapp messages, I accept the reason for the delay in this application and I am of the view that the length of delay is not unreasonable.

Whether A has redress against any third party

53.  Mr Lau submitted that A may claim against KMLL for negligence because: -

“24 (1) Upon receiving PWT’s First Letter on 21 August 2020, A “immediately sought legal advice[22]. PWT’s First Letter concerned the Probate. Logically, A was advised of her rights under Cap 481.

(2) Furthermore, KMLL was clearly aware of the statutory time limit under Cap 481 as stated in KMLL’s letter dated 25 September 2020[23].”

54.  Mr Cheng on the other hand submitted that as evidenced in KMLL’s letter dated 25 September 2020, A had been duly advised as to her right to claim under Cap 481, and that there was nothing to suggest that the delay was caused by the negligence of KMLL.

55.  As I have already ruled on the reason for the delay in this application, I agree that there is nothing to suggest that the delay was caused by the negligence of KMLL.

Whether A has reasonable prospect to succeed in her case?

56.  Mr Cheng submitted that A had an arguable case for the following reasons:-

“37 (1) As the lawful wife of the Deceased, A, now aged 63, is deemed to be a dependent;

(2) The Will did not contain any financial provisions for A;

(3) The marriage is a long one, more than 38 years. Even excluding the 3 years’ separation prior to the death of the Deceased, it still last for over 35 years;

(4) A had all along been assisting the Deceased in operating his business of plastic manufacturing (“Best Way”) until they retired in or about 2004;

(5) The wealth of the family accumulated through the operation of Best Way; and

(6) After retirement, A became a housewife taking care of all household chores of the family, and had been paying the outgoings for both the 1^st Property and the 2^nd Property.”

57.  Mr Lau however submitted that other than A’s bare assertions, there was no evidence to support that A had all along been assisting the Deceased in operating Best Way until they retired in or about 2004 and that the wealth of the family accumulated through the operation of Best Way.  Besides, it was said that there was no evidence likewise that A had been paying the outgoings for the two properties[24].

58.  In my view, despite the 3 arguments that Mr Lau submitted, the major assets of the family were the two properties which were held by the Deceased and A as joint tenants before the Severance.  The 1^st Property was purchased by A and the Deceased as early as 1983[25] and the 2^nd Property was purchased in 1999[26]. Given the long marriage with no dispute that A was the dependent of the Deceased, A indeed has an arguable case.

Others

59.  There is no dispute that the estate has not been distributed before the claim is made or notified.

60.  I am also of the view that there is no prejudice to Rs because the only reason why R1 wants to sell the two properties is solely because she has no intention to keep them.

Conclusion

61.  In light of the reasons which I have given, I would grant leave for A to apply out of time for financial provision from the estate of the Deceased under the Inheritance (Provision for Family and Dependents) Ordinance (Cap 481).

Costs

62.  As A succeeds in her application, I cannot see why costs should not follow the event.

Order

(1)     Leave for A to apply out of time for financial provision from the estate of the Deceased under the Inheritance (Provision for Family and Dependents) Ordinance (Cap 481);

(2)     Rs do pay the costs of A to be taxed if not agreed.

63.  Last but not the least, it remains for me to express my gratitude to both Mr Cheng and Mr Lau for their helpful submissions.