Case Details

Citation

DR LAU YUE CHIU v. LAU KIN SHUN FREEMAN, HCMP 1176/2016

Case Number

HCMP 1176/2016

Court

Court of First Instance

(CFI)

Decision Date

14 November 2016

Parties

For Applicant(s):

Mr Albert Yau

For Respondent(s):

Mr Alexander Wong

DR LAU YUE CHIU v. LAU KIN SHUN FREEMAN

HCMP 1176/2016

Court of First Instance14 November 2016

HCMP1176/2016 DR LAU YUE CHIU v. LAU KIN SHUN FREEMAN

HCMP 1176/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1176 OF 2016

_________________________

	IN THE MATTER of the estate of LAU WAI CHAU alias LAU SING MEE alias LAU HAK SUT TONG, late of Tung Shing Lane, Yuen Long, New Territories, Hong Kong, deceased (“the Estate” and “the Deceased” respectively)
	and
	IN THE MATTER OF Order 85 of the Rules of High Court
	and
	IN THE MATTER OF the Probate and Administration Ordinance Cap 10, Section 33 and Non-contentious Probate Rules, Cap 10A rr 19, 21

_________________________

BETWEEN
	DR LAU YUE CHIU	Plaintiff
	and
	LAU KIN SHUN FREEMAN, purported administrator of the Estate of Lau Wai Chau alias Lau Sing Mee alias Lau Hak Sut Tong under the letters of administration with will annexed de bonis non issued on 27 January 2016	Defendant

_________________________

Coram:Deputy High Court Judge Marlene Ng in Chambers

Date of Hearing: 14 November 2016

Date of Handing Down Judgment: 31 May 2017

_______________

JUDGMENT

_______________

I. INTRODUCTION

1. Lau Wai Chau alias Lau Sing Mee alias Lau Hak Sut Tong (“Ancestor”) was a successful businessman who last resided in Tung Shing Lei, Yuen Long, New Territories (“Tung Shing Lei”). He had 5 wives and 8 sons. The 1^st to 8^th sons were Lau Leung Kei, Lau Leung Sheung, Lau Leung Chau, Lau Leung Chun, Lau Leung Kwai, Lau Leung Chung, Lau Leung Kui and Lau Leung Wa. The Lau family tree can be seen in Appendix 1 of the judgment of Cheung J (as he then was) in Re Estate of Lau Wai Chau (“Cheung Judgment”).[1] Unless otherwise stated, “son”, “grandson” and “great-grandson” in this Judgment refer to son, grandson and great-grandson of the Ancestor, and “fongs” refer to the families of the 8 sons of the Ancestor.

2. On 11 July 1930, the Ancestor made an English will (“Will”). On 4 March 1932, the Ancestor made a Chinese codicil (“Codicil”). The Ancestor passed away on 18 August 1933.

3. Lau Yue Chiu (“P”), now 85 years old, is (a) the only son of the 6^th son, (b) the oldest surviving grandson, (c) a cousin of Lau Yue Kui and (d) the sole surviving member of the Lau family who was a direct party to the DFA referred to in paragraph 25 below. The 6^th son passed away during the Second World War.

4. Lau Kin Shun Freeman (“D”) is a descendant of the 4^th fong. The 4^th son had 2 sons, the elder son Lau Yue Chun who died many years ago and the younger son Lau Yue Kui who died in 2015. D is the son of Lau Yue Chun, nephew of Lau Yue Kui, grandson of the 4^th son and great-grandson of the Ancestor, so he is a further generation removed from the Ancestor than P.

5. P and D were not even born when the Ancestor made the Will in 1930, so they were not expressly named therein as executor or beneficiary, but as seen in paragraphs 55 and 58 below both claimed to have interest in the residuary estate of the estate of the Ancestor (“Estate”).

6. In 1994, probate of the estate of the 4^th son was granted to his son Lau Yue Kui (also a grandson). On 8 June 1995, Lau Yue Kui was granted letters of administration (“LA”) with will annexed in respect of the Estate.[2] Lau Yue Kui passed away on 9 August 2015. On 11 December 2015, LA de bonis non in respect of the estate of the 4^th son (“D’s 4^th son LA”) was granted to D.[3] On 27 January 2016, LA with will annexed de bonis non in respect of the Estate was granted to D (“D’s Ancestor LA”).[4]

7. On 10 May 2016, P issued an originating summons (“OS”) against D in the present proceedings (a) to seek determination of the question whether upon death of Lau Yue Kui, former administrator of the Estate, LA with will annexed de bonis non in respect of the Estate should have been granted to P rather than D as a matter of priority (“Priority Issue”), and (b) to seek inter alia the following reliefs: (i) D’s Ancestor LA be revoked, (ii) fresh LA with will annexed de bonis non in respect of the Estate be granted to P, and (iii) directions for due administration of the Estate consequential upon orders to be made (“Removal Issue”).

8. On 10 May and 20 June 2016, P filed his own affidavit (“P 1^st Aff”) and the affirmation of his solicitor Li Siu Fung (“Li”) (“Li 1^st Aff”) in support of the OS. On 1 June 2016, D filed his affirmation in opposition.

9. On 6 July 2016, P filed Notice of Appointment to Hear OS (“Notice”) to seek inter alia the following directions: (a) D shall within 7 days (i) give consent to the Probate Registry for P to inspect the probate file for D’s Ancestor LA and (ii) provide P with full copies of D’s Ancestor and 4^th son LAs, and (b) the OS be adjourned for substantive hearing with 2 days reserved in consultation with counsel’s diaries.

10. On 22 July 2016, D filed a summons pursuant to Order 18 rule 19 of the Rules of the High Court (“RHC”) and the inherent jurisdiction of the court for an order that the OS be struck out on the ground (a) it disclosed no reasonable cause of action, (b) it was scandalous, frivolous or vexatious, and (c) it was an abuse of the process of the court, and that P’s claim against D in the action be dismissed with costs (including costs of such summons) to be taxed if not agreed (“Summons”).

11. On 25 July 2016, D filed his 2^nd affirmation to oppose the Notice and to support the Summons. On 27 July 2016, D filed his 3^rd affirmation in reply to the P/Li 1^st Affs and to support the Summons.

12. On 28 July 2016, Master Lai inter alia (a) gave leave for D to file/serve affirmation in support of the Summons within 14 days with liberty to include matters in his 1^st to 3^rd affirmations in his supporting affirmation to be filed, (b) gave leave for P to file/serve affirmation in opposition within 21 days thereafter, (c) gave leave for D to file/serve affirmation in reply (if any) within 14 days thereafter, (d) adjourned the Summons for argument before a Probate Judge, and (e) adjourned the OS for a further directions hearing after disposal of the Summons or as directed by further order of the court.

13. On 11 August and 4 November 2016, D filed his 4^th and 5^th affirmations (“D 4^th and 5^th Affs”) in support of the Summons.[5] On 3 October 2016, P filed Li’s 2^nd affirmation (“Li 2^nd Aff”) in opposition. The hearing of the Summons came before me on 14 November 2016 (“Hearing”).

II. PRELIMINARY MATTERS

14. First, proceedings commenced by OS (which originating process merely set out the reliefs sought) do not have pleadings, so proper understanding of P’s claim had to be elicited from P/Li 1^st Affs. Further, paragraph 9 of the Li 2^nd Aff expressly adopted the P/Li 1^st Affs to oppose the Summons. It was therefore surprising to learn that D resisted inclusion of the P/Li 1^st Affs in the hearing bundle. Mr Wong, counsel for D, sensibly conceded at the Hearing that the P/Li 1^st Affs should have been placed before this Court.

15. Secondly, the OS sought reliefs on the Priority/Removal Issues. Mr Wong’s written submissions addressed both issues, but those of Mr Yau (and with him Mr Leo Wong), counsel for P, were confined to the Priority Issue. A quick review of the affirmation evidence and Mr Wong’s written submissions showed the Removal Issue involved factual disputes over P’s complaints and D’s conduct concerning administration of the Estate and/or handling of matters under the DFA referred to in paragraph 25 below, which would hardly commend themselves to a striking out application given the threshold requirements discussed in Part VI below. Further, if it was plain and obvious P had no priority over D for a grant of representation for the Estate, P would have no capacity or locus standi to maintain his claims under the OS. Thus, at the Hearing, Mr Wong sensibly agreed to focus on the Priority Issue and not rely on the Removal Issue for the purpose of the Summons.[6] Both counsel addressed this court on the Priority Issue, which essentially was an issue of law and construction of the Will, Codicil and DFA referred to in paragraph 25 below. Consequently, in the discussion below, I do not propose to deal with affidavit/affirmation evidence and Mr Wong’s written submissions pertaining to the Removal Issue.

16. Thirdly, it appeared that Mr Wong’s written submissions referred to a host of factual matters not found in the affirmation/affidavit evidence before this court. Mr Wong submitted they were elicited from correspondence exhibited to such affirmation evidence, but by and large such correspondence was exhibited to, say, demonstrate the existence of communications between certain parties on a particular subject, the status of administration of the Estate at particular times, etc without particular verification of the specific factual assertions therein.

17. As illustration, Mr Wong’s written supplemental submissions on the DFA referred to in paragraph 25 below stated as follows:

“5. …… the Ancestor had other properties in addition to the properties specified in the [DFA]. So far the late Administrator [of the Estate Lau Yue Kui] can identified is a piece of land in name of the Ancestor but outside the [DFA]. There are other land under the name of his concubine, Lau Pang Sze which should also be brought into the estate, such process has yet to be completed.

......

20(iii) The assets under the [DFA] was only part of the estate (though substantial in Hong Kong), there were residuary properties not included in the [DFA] which were entitled by the 3 sons [ie the 2^nd, 3^rd and 4^th sons] absolutely under the English Will.”

When pressed on the evidential source of such factual assertions, Mr Wong was only able to refer to the following passages in the D 4^th Aff:

“33. …… [D had] beneficial interest in the estate of the Ancestor both in the [DFA] as well as properties of the Ancestor outside the [DFA].

……

36. …… Subsequent distribution of part of the assets of the estate under the [DFA] by the 3 residuary beneficiaries could not affect nor alter original testamentary disposition under the English Will. P is misconceived in this respect too. The judgment in the 95/96 proceedings [see paragraphs 39-41 below] only refer to land in the [DFA].”

But the above assertions in the D 4^th Aff did not verify the factual particularity in Mr Wong’s written supplemental submissions. Mr Wong then alluded to some correspondence, but eventually conceded they were not placed before this court. So at the Hearing Mr Wong accepted this court could ignore factual assertions in his written submissions and written supplemental submissions unless he could identify their source in the affirmation evidence.

18. Fourthly, it caused this court some anxiety that counsel had not followed the usual discipline in citation of authorities. A learned textbook was merely referred to as “Page 440 of Law of Succession”, and in the absence of the copy cover page of such textbook this court was none the wiser what textbook and which edition that would be. This court was also not told Williams, Mortimer and Sunnucks on Executors, Administrators and Probate 18^th ed and Tristram and Coote’s Probate Practice 30^th ed cited by Mr Wong were not the current editions of those works (the current editions being 20^th ed and 31^st ed respectively), and no explanation was given for the significance of using old editions. The scanty reference to “P.503 Theobald on Wills” did not enlighten which edition was being referred to. Further, case law (eg Kellett v Kellett (1868) LR 3 HL 160) was cited, but no copy was provided in the relevant list of authorities. Still further, as seen in the discussion below, relevant authorities (eg judgments of the Court of Appeal (“CA”)[7] and the Court of Final Appeal (“CFA”)[8] on appeal from the Cheung Judgment, “CA and CFA Judgments”) had not been cited. The above matters did not aid efficient and confident understanding of the case by the court.

19. I am afraid the above matters must be appropriately reflected in costs, which I will deal with in Part VIII below.

III. BACKGROUND

20. On 11 July 1930, the Ancestor made the Will appointing the 2^nd, 3^rd and 4^th sons (“3 Sons”) “to be the Executors”. Clause 3 of the Will (“Clause 3”) provided inter alia as follows:

“Subject thereto[9] I give devise bequeath and appoint all the rest residue and remainder of my estate both real and personal and wheresoever situate unto my executors or the survivor or survivors of them living at the date of my death in equal shares absolutely or if there shall be only one Executor living at my death then to that one absolutely.”

The Will appeared to have bequeathed the entire residuary estate of the Estate (“REstate”) to the named executors (ie the 3 Sons) “in equal shares absolutely”. There were no other specific bequests and devises or other dispositions in the Will, so at least at the time of making of the Will the REstate was the same as the Estate.

21. Mr Wong submitted the aforesaid plain reading of Clause 3 was its true construction, but Mr Yau argued the 3 Sons were not the only residuary beneficiaries and they did not take the REstate “absolutely”. Mr Yau drew support from the Cheung Judgment at page 569 as follows (“Cheung Observation”) which I will return to below:

“The ancestor made an English will dated 11 July 1930. In that will the ancestor appointed his three eldest sons, namely the second, third and fourth sons as the executors.[10] Although they were also named as the residuary legatees, it is common ground between the parties that the three sons were not intended to take the residual estate beneficially.” (my emphasis)

22. P claimed that in 1932/1933 the Ancestor was quite unwell. In/about 1932, he divided some of his properties into 9 parts, and each of the 8 fongs[11] was given 1 part. The 9^th part was given to the 3 Sons expressly on trust for the Ancestor himself. Such division of property (“1933 Division”) was registered in 1933 at the Tai Po District Land Office.

23. On 4 March 1932, the Ancestor made the Codicil that gave certain specific bequests/legacies and family instructions. Its certified translation read as follows:

“I am now of advanced age and cannot undertake the numerous heavy chores in the family. The achievements of my whole life’s hard work and dedication, apart from those already allocated and distributed to each of you to manage hold and develop, the rest including fish ponds and surrounded fields in front of the village together with the paddy fields in the surrounding which are still under my name as my properties are to be kept and managed in perpetuity for the payment of the designated expenses for paying respect to our ancestors in future. …… As to matters in the family whether important or minor, they should be discussed and decided by 3 persons, namely Leung Sheung, Leung Chau and Leung Chun [ie 3 Sons] and their decisions are not to be challenged or disputed. Take note. [此外關於家中大小事宜均由良驤良騶良駿三人商議取決不得妄加非議此囑]

……

- All annual rentals collected, licensee fees, Chap Chiu and Deeds in respect of properties under my name shall be managed by Leung Sheung, Leung Chau and Leung Chun [ie 3 Sons] as managers on rotation at one year interval.

……” (my emphasis)

Neither P nor D was named as any specific legatee/devisee in the Codicil. Mr Wong submitted the Codicil did not touch on the REstate, but Mr Yau argued the Codicil revoked the disposition of the REstate under the Will so P representing the 6^th fong became one of the residuary beneficiaries of the Estate (ie the 8 sons or fongs).

24. The Ancestor died on 18 August 1933, and left inter alia land and buildings in Tung Shing Lei. Of the 5 buildings, 4 were shared amongst the 8 sons and their families, and 1 was used as an ancestral hall. The land at Tung Shing Lei was registered in the names of the 3 Sons upon trust for the Ancestor himself, and the buildings were registered in the names of the 2^nd son, 3^rd son, 4^th son, and 7^th son and the 7^th son’s wife Lau Pang Shi.

25. Despite 8/9 of the Ancestor’s lands in the New Territories had gone to the 8 fongs by the 1933 Division, the Estate was still considerable. For a time the 3 Sons managed the Estate, but family discord arose. After the Second World War, the 8 fongs decided to divide up the Ancestor’s undivided properties amongst themselves and to retain 1 portion of land in Tung Shing Lei[12] as common property and for ancestral worship. A draft Chinese document signifying the division was signed by the 3 Sons in 1945. The actual division took place in 1946 with the 2^nd son having priority to choose his share of the property whilst the others would draw lots according to seniority (“1946 Division”). The allocation was then recorded in a Chinese document with a duplicate given to each fong and a 9^th copy kept in common custody. Hastings & Co later prepared a deed of family arrangement dated 20 March 1946 (“DFA”) that recorded the division and set out allocation of the 8 parts and 9^th part (held by the first to eighth Beneficiaries referred to in paragraph 26 below, representing the 8 fongs on trust and in rotation as common property and for ancestral worship).

26. The DFA was made between (a) the 3 Sons as trustees of the Estate defined therein as the “Trustees” and (b) Lau Yu Hi (adopted son of the 1^st son), the 2^nd son, 3^rd son, 4^th son, 5^th son, P (son of the 6^th son), 7^th son, and 8^th son defined therein as the “first to eighth Beneficiaries”. The DFA was signed, sealed and delivered by inter alia (i) the 4^th son (D’s grandfather) as the fourth Beneficiary and (ii) Lau Chan Chuk Ling (natural mother) as guardian of P then aged 15 years as the sixth Beneficiary.

27. The Recitals of the DFA stated inter alia as follows:

“…… WHEREAS the said Estate of Lau Wai Chau deceased consists (inter alia) of certain landed properties (hereinafter called “the said properties”) particulars whereof are specified in the Schedule hereto AND WHEREAS the first, second, third, fourth, fifth, sixth, seventh and eighth Beneficiaries are descendants of the said Lau Wai Chau deceased and as such are entitled to a share in the said properties ……”

According to such Recitals, the first to eighth Beneficiaries requested the Trustees to divide up the “the said properties” (ie certain lands in the New Territories) among them which the Trustees agreed to do upon being provided such release and indemnity as provided for in the DFA.

28. The 3^rd, 5^th, 6^th, 7^th and 8^th fongs (“5 Fongs”) appealed against the Cheung Judgment to the CA and finally to the CFA. In the CFA Judgment,[13] Bokhary PJ described the 1946 Division as follows:

“…… Then family discord arose. This led in 1946 to another nine-part division (the 1946 Division). It was the division of the Ancestor’s entire estate comprising everything he owned after the eight-ninths of his New Territories land had gone to the eight fongs before his death.

The 1946 Division comprised the following family arrangements. The Ancestor’s estate was divided into 9 parts. The second fong, being that of the eldest surviving son, chose the part which it wanted. The next six fongs then drew lots in order of seniority for their parts. The eighth fong was left to take the lot not drawn by the others. The ninth part, which did not go into the draw, was reserved as property common to all eight fongs for the purpose of ancestral worship. These are the family arrangements embodied in the DFA.”

29. Shortly thereafter, the 8 fongs took possession of the divided properties. Under the DFA, the land to be distributed to the sixth Beneficiary (ie P) was described as “Fish Pond No 3”, and he took such lands directly. The family arrangements embodied in the DFA had been acted upon by the Lau family members for decades.

30. The 2^nd, 3^rd and 4^th sons passed away in 1977, 1956 and 1981 respectively. None of them proved the Will/Codicil in respect of the Estate during their lifetimes.

31. The 4^th son left a will. On 24 February 1994, probate of the estate of the 4^th son was granted to his younger son Lau Yue Kui (4^th fong grandson). On 8 June 1995, LA with will annexed in respect of the Estate was granted to Lau Yue Kui. According to the Schedule of Property annexed to such grant (“Schedule of Property”), the Estate comprised lands and buildings in the New Territories (ie various lots in DD103 and DD115). A quick comparison of the land lots in the Schedule of Property and those in the DFA and/or Cheung Directions referred to in paragraph 42 below showed substantial if not entire overlap. Neither counsel informed this court whether there were any lands mentioned in the DFA and/or Cheung Directions that were not in the Schedule of Property or vice versa.

32. According to Lau Yue Kui’s affirmation for grant of LA with will in respect of the Estate re-affirmed on 1 June 1995, the beneficiaries named in the Will were the 3 Sons (since deceased) and in the Codicil were the 8^th son and the Ancestor’s wives/daughters. Lau Yue Kui went on to affirm inter alia as follows:

“3. The deceased did not name any residuary legatee or devisee holding in trust for any other person in his Will and Codicil.

4. The deceased did not name any residuary legatee or devisee for life in his Will and Codicil.

5. The deceased named the said LAU LEUNG SEUNG, the said LAU LEUNG CHAU and said LAU LEUNG CHUN [ie the 3 Sons] the residuary legatees and devisees in his Will. ……”

33. Prior to his death, the 4^th son was the last surviving Trustee in respect of the DFA. Upon his demise, Lau Yue Kui as executor of the estate of the 4^th son became the Trustee under the DFA. Lau Yue Kui lived in Canada, and granted a power of attorney to D (“PA”) to act on his behalf as administrator of the Estate when he was not in Hong Kong. D claimed such PA was renewed annually.

34. The 8 fongs had differences over the validity of the DFA, ie the 5 Fongs contended for its invalidity on the basis inter alia that (a) an ancestral worship trust (“AWT”) was established either during the lifetime of the Ancestor or upon his death, (b) the DFA was invalid or was not fully carried into effect and it was too late/inequitable to enforce it, and (c) in 1979 the DFA was replaced by an agreement of the 8 fongs to sell the properties and share the proceeds equally among them (“1/8 Agreement”), but the 4^th fong (supported by the 1^st and 2^nd fongs) sought to uphold the validity of the DFA. It was said at page 574 of the Cheung Judgment that:

“The plaintiff (fourth fong) says that the properties of the ancestor, which were not divided among the eight fongs in the 1933 division, were subsequently divided amongst the eight fongs and recorded in the DFA. He seeks to uphold the validity of the DFA.”

35. Chung J in Lau Leung Wa & anor v Lau Yue Kui (sued as Administrator of the Estate of Lau Wai Chau, Deceased and personally) & anor[14] explained the genesis of the aforesaid dispute as follows:

“14. There is no direct evidence about the actual motive behind the litigations. But it is not difficult to imagine that there must have been increase or decrease in the land value of the undistributed properties[15] respectively held by the “fongs” between 1945 and 1996. The change in land value would very probably mean some of the “fongs” would benefit more if the DFA was valid and binding; the converse would be true for the other “fongs” if the undistributed properties were to be divided equally.”

The differences in value of properties divided and allotted to the 8 fongs were summarised in Appendix 2 to the Cheung Judgment that showed interests of the 8 fongs under the DFA, the valuation in 1992 and the alleged 1/8 Agreement:

Fong DFA 1/8 Agreement Difference in value

in 1946 in 1992 Gain loss

1^st 12.5% 12.08% 12.5% -0.30

2^nd 12.5% 5.82% 12.5% 6.68

3^rd 12.5% 5.21% 12.5% 7.29

4^th 12.5% 43.90% 12.5% -31.4

5^th 12.5% 7.85% 12.5% 4.65

6^th 12.5% 8.82% 12.5% 3.68

7^th 12.5% 5.52% 12.5% 6.98

8^th 12.5% 10.81% 12.5% 1.69

The above showed the 4^th fong stood to gain the most under the DFA due to appreciation of the value of their allotted land, and it would stand to lose the most if the alleged 1/8 Agreement was upheld.

36. Some of the lands in the schedule to the DFA were resumed by the government in 1989 (affecting the 8^th fong), 1993 and 1995 respectively. In 1980 and 1981 some smaller pieces of land under the DFA were also resumed. After Lau Yue Kui obtained the grant of LA (with will) in respect of the Estate in 1995, he proceeded to negotiate with the resumption authority (ie the government) to collect cash compensation for the resumption of lands in 1993 and 1995, which lands respectively belonged to the 4^th fong and to the 1^st, 4^th, 5^th, 6^th and 8^th fongs under the DFA. Since such lands were still registered in the names of the 3 Sons, the government insisted Lau Yue Kui should obtain vesting orders as precondition for release of cash compensation.

37. In 1995, Lau Yue Kui commenced legal proceedings to seek inter alia vesting orders of the resumed lands and unresumed portion of the Ancestor’s lands in accordance with the DFA and also distribution of the cash compensation (“1995 Proceedings”). Some of the resumed lands were held in the registered name of Lau Pang Shi, so her estate was joined a defendant in the 1995 proceedings. Lau Yue Kui obtained most of the reliefs sought except for the order for distribution which was not proceeded with. The defendants representing the 2^nd, 3^rd and 7^th sons applied to set aside the order. The parties subsequently made a compromise to allow the previous orders to remain in force subject to 1 variation and without prejudice to the rights of the parties.

38. On 19 September 1996, Lau Yue Kui as administrator of the Estate and executor of the will of the 4^th son joined the other 7 fongs as defendants in legal proceedings for a declaration that the properties of the Ancestor be distributed in accordance with provisions of the DFA (“1996 Proceedings”). The 1995 and 1996 Proceedings are collectively referred to below as the “95/96 Proceedings”.

39. By the Cheung Judgment dated 7 January 1998, it was declared the division/distribution of the properties of the Ancestor under the DFA were valid and binding on the 8 fongs, and an AWT was not established during the lifetime of the Ancestor or upon his death under Chinese law or Hong Kong law. Further, even if the lands were subject to an AWT, the male descendants of the Ancestor could disregard such trust and divide the properties amongst themselves with their unanimous consent. The 1946 Division properties were not subject to any AWT, but even if they were, they were not caught by section 15 of the New Territories Ordinance Cap 97 (“NTO”).

40. The Cheung Judgment further held the DFA was valid. The most important term of the DFA[16] had been carried out and put into effect for decades, and the 8 fongs by conduct clearly showed they had accepted the 1946 Division. One could not infer from the failure to carry out some essential terms of the DFA as an indication that the parties treated the DFA as having lapsed. It was held that the properties of the Ancestor and the Lau family were divided once and for all in 1946, and the first to eighth Beneficiaries and their respective fongs had substantially performed the DFA by taking beneficial ownership and exclusive possession/enjoyment of their respective allocated properties and by not disavowing the DFA:[17]

“However, what is more important is that the eight fongs had taken possession of their properties from the spring of 1947. The 1946 division had clearly and finally completed the division of the properties of the ancestor and his family into eight fongs (分家) which was already divided in 1932.

……

…… The properties and the family were already divided once and for all by 1946.”

It was also held that legal title would follow, and the fact legal title had not been conveyed[18] was not significant in comparison as the beneficial owner who acquired the equitable interest could still deal with the land. A declaration that the 1946 Division under the DFA was valid in law simply meant the registered owners were holding the respective portions for the land in trust for the respective fongs in accordance with the DFA. In the circumstances, equity must lie in maintaining the status quo rather than in unravelling the 1946 Division. Further, the equality of the 8 fongs was to be judged by reference to the situation in 1946 and not at the time of the Cheung Judgment.

41. Cheung J (as he then was) also found the 8 fongs had not concluded the 1/8 Agreement in 1979 to vary the DFA by regrouping the divided properties for sale or applying for permission for redevelopment.

42. On 24 January 1998, Cheung J (as he then was) gave consequential directions in the 95/96 Proceedings relating to inter alia the vesting of lands (or the right to claim compensation for lands already resumed by the government) among the 8 fongs in accordance with the DFA, and setting up the AWT in veneration of the Ancestor upon due administration of the Estate (“Cheung Directions”). Draft vesting orders were annexed to the Cheung Directions.

43. Paragraph 3 of the Cheung Directions provided inter alia that subject to “the giving of the indemnity and release referred to in paragraph 13 [of the Cheung Directions]”[19] and a first charge on the cash compensation and/or ex gratia payments for certain costs ordered to be paid, P was at liberty to apply for further vesting to him lands identified as “Fish Pond No 3” in the DFA, and subject to such further vesting and first charge, P would be entitled to receive cash compensation and/or ex gratia payments (for lands allotted to P but already resumed by the government) absolutely.

44. Paragraphs 18-19 of the Cheung Directions provided inter alia that after payment of all expenses, fees or costs ordered therein to be paid from the Estate and/or from the compensation and/or ex gratia payments for resumption or proceeds of sale of the common properties, and after completing administration and distribution of the Estate, Lau Yue Kui as the administrator of the Estate was directed to register a tso (failing agreement to be named as “Lau Wai Chau Tso”) with 4 managers (failing agreement to be the 8^th son, Lau Yue Kui, P and Lau Sai Tung) and settling specified properties in such tso.

45. On 29 January 1999, on the 5 Fongs’ appeal, the CA by majority in the CA Judgment affirmed the Cheung Judgment. The 5 Fongs then appealed to the CFA to challenge the validity of the DFA on the ground it was made in breach of an AWT. The CFA Judgment held there was no AWT for the DFA to violate, and accordingly the DFA was valid.[20] On 19 January 1999, the 5 Fongs by CACV16/1999 appealed against the Cheung Directions, but such appeal was dismissed by consent on 26 August 2002.

46. P claimed the 1^st, 2^nd and 4^th fongs had obtained vesting orders under the Cheung Directions, and the 5 Fongs had since obtained grants of representation for the estates of inter alia the 3^rd, 5^th, 7^th and 8^th sons:

3^rd fong Ma Wah Yan and Wong Chi Leung, co-administrators of the estate of the 3^rd son

5^th fong Ma Wah Yan, administrator of the estate of the 5^th son

7^th fong Lau Yu Shing, administrator of the estate of the 7^th son

8^th fong Lau Yue Sum and Lau Yue Ting, co-executors of the will of the 8^th son

But vesting orders had not been made for the 5 Fongs. P suggested (a) it seemed the 2^nd fong had not paid its share of probate and administration costs in respect of the Estate, and (b) taxation of outstanding costs of probate and administration was still pending. D denied the administrator of the Estate failed to quantify costs to facilitate payment/vesting, and suggested any delay in vesting was caused by (i) the 5 Fongs’ appeal to the CA against the Cheung Directions, (ii) (unbeknownst to the administrator of the Estate until 7 July 2015 when his solicitors received a letter from the purchaser) P entering into a secret sale and purchase agreement dated 1 June 1999 over certain lands in the DFA before vesting of such lands,[21] and (iii) P’s delay (despite reminder) in giving the release and indemnity required for the vesting order to be made. However, it would be unnecessary to resolve these disputes for the purpose of the Priority Issue.

47. Lau Yue Kui passed away on 9 August 2015, and D’s status as his attorney under the PA came to an end. On 27 January 2016, D’s Ancestor LA in respect of the Estate were granted to D. Following the demise of Lau Yue Kui as Trustee under the DFA, D became the new Trustee when he obtained D’s Ancestor LA. D’s Ancestor LA recited the following: (a) the Will/Codicil “whereof [the Ancestor] appointed [the 3 Sons], the executors and the residuary legatees and devisees therein”, (b) as “the legal representative of [the 4^th son], one of the residuary legatees and devisees named in the [Will/Codicil], the said Lau Yue Kui died on the 9^th day of August 2015, leaving part of the estate of [the Ancestor] unadministered”, (c) each of the 2^nd and 3^rd sons (both of whom had passed away) was “one of the Executors and residuary legatees and devisees named in the [Will/Codicil]”.

48. P claimed that between the death of Lau Yue Kui on 9 August 2015 and the grant of D’s Ancestor LA on 27 January 2016, the 5 Fongs were unaware of (a) Lau Yue Kui’s death, (b) D’s application for D’s Ancestor LA, and (c) the grant of D’s Ancestor LA. P further claimed he learnt of (a) and (c) above when D’s solicitors Philip Chan & Co[22] (“PCC”) wrote to P’s solicitors on 15 February 2016 referring to D as the new administrator of the Estate and enclosing a copy letter of even date to solicitors for the resumption authority (ie the government) concerning cash compensation for resumption of lands for building the Yuen Long Bypass Floodway, but at that time P still did not know when Lau Yue Kui passed away.

49. On 29 February and 2 March 2016, solicitors for the 5 Fongs replied to PCC expressing condolences over Lau Yue Kui’s death and shock over D’s appointment as new administrator of the Estate, and complaining against D’s refusal despite request to provide a copy of D’s Ancestor LA. On the same days, solicitors for the 5 Fongs wrote to the Probate Registry to request inspection of the probate file in respect of the Estate.

50. On 19 April 2016, solicitors for the 5 Fongs wrote to PCC to ask D to step down as administrator of the Estate so P could be appointed as such on the basis that “[D] is not entitled to be appointed in priority to other family members”. On 3 May 2016, PCC replied to say D was then abroad and they would not handle contentious matters in respect of the Estate, but D would instruct his present solicitors to act for him upon return to Hong Kong and to reply to their letter.

51. On 27 May 2016, D’s present solicitors replied to say P had no priority or entitlement to a grant in respect of the Estate as P was not an executor or beneficiary in the Will/Codicil, and D had obtained D’s Ancestor LA in his capacity as administrator of the estate of the 4^th son who was the last surviving executor and residuary legatee under the Will. D’s present solicitors provided copy first page of D’s Ancestor LA, and reminded inter alia that the 4^th son was also the last surviving Trustee under the DFA.

52. On 30 May 2016, P’s solicitors sought a complete copy of D’s Ancestor LA. A full copy was eventually obtained from the Probate Registry on 22 July 2016. P claimed it was only then that the 5 Fongs came to know when Lau Yue Kui died and when D obtained D’s Ancestor LA.

53. On 23 August 2016, Master Ho granted an order in the 95/96 Proceedings for D as administrator of the Estate to be made a party to those proceedings, and for those proceedings be carried on as if he had been substituted as the plaintiff being administrator of the Estate and/or the estate of the 4^th son. D claimed such order enabled him (as administrator of the Estate) to become the Trustee under the DFA to finalise the trust, to make vesting orders in favour of the 5 Fongs and to set up the tso with the remaining assets of the 9^th part after payment of relevant costs and expenses.

IV. P’s CASE

54. P claimed the 5 Fongs considered him to be the rightful and preferred person to apply for LA with will annexed de bonis non in respect of the Estate. P further claimed he and his cousins of the 3^rd, 5^th, 7^th and 8^th fongs (who were a generation above D in the Lau family) had priority over D for such grant. D did not inform them about his application for D’s Ancestor LA and/or did not invite them to renounce their priority to obtaining such grant, which gave the impression that senior members of the Lau family had not been given fair opportunity to decide the future of the administration of the Estate. P claimed that had they been told of such developments a proper all-inclusive family discussion would have taken place which might have obviated the present proceedings.

55. P claimed the Lau family was a traditional Chinese family, and by Chinese customary succession the 8 sons “were to take the Estate, upon division, equally”. P claimed the 3 Sons were merely trustees of the REstate (mainly lands around Tung Shing Lei), and P was one of the “ultimate residuary beneficiaries”. Even though the Ancestor by the Will named the 3 Sons as beneficiaries of the REstate, “[under the Codicil], apart from certain specific legacies, the [REstate was] settled for ancestral worship”.[23] By the time Lau Yue Kui obtained grant of administration (with will) in respect of the Estate in 1995, the DFA was the most important document governing distribution of the Estate in Hong Kong, and it was common ground among the 8 sons that the 3 Sons were not intended to take the REstate beneficially.[24] Under the DFA, P as the sixth Beneficiary took possession the lands divided and allotted to the 6^th fong directly, so P claimed to be a direct beneficiary of the Estate.

56. P claimed the 5 Fongs were of the view there should be orderly administration of the Estate in accordance with the law and family traditions. Seniority matters in the hierarchy of a traditional Chinese family, and as the oldest surviving grandson and a direct party to the DFA P enjoyed priority in obtaining a grant to complete the unfinished business of administration of the Estate. P claimed “it is the consensus of the majority of our family members and fongs”, and he had the support of the personal representatives in paragraph 46 above.

57. Whilst P had no intention to revisit the past (especially the 95/96 Proceedings), and he recognised the importance of respect/harmony in the family and the price that might have to be paid in taking family disputes to court, P believed the Priority Issue could be determined principally, if not solely, as a matter of law. P argued that (a) Lau Yue Kui obtained LA with will annexed in respect of the Estate by virtue of (i) the Will that named the 4^th son as one of the executors and trustees and (ii) his being appointed as executor of the will of his father the 4^th son, (b) D was merely Lau Yue Kui’s nephew with no priority to apply for a grant in respect of the Estate,[25] and (c) P had priority over D (ie administrator of the estate of the 4^th son). P claimed his priority was not subject to any limitation of old age, and with the help of his lawyers and other cousins he was confident he could discharge the office as administrator of the Estate with competence.

V. D’s CASE

58. D claimed he was properly appointed as administrator of the Estate under the properly granted D’s Ancestor LA. D claimed he was also a beneficiary of the REstate because as beneficiary of the estate of his father Lau Yue Chun[26] he had beneficial interest in the REstate, which covered properties within and outside the DFA.

59. D claimed that by the Will the Ancestor bequeathed the REstate to the 3 Sons (including the 4^th son) in equal shares “absolutely” (ie as an absolute gift). The Will was never challenged in subsequent court orders (some of which were made by consent of the parties including P) and in the 95/96 Proceedings. For the Codicil, D claimed it did not disturb the REstate under the Will. P was not named in the Codicil and had no interest therein. For the DFA, the 4^th son was the last surviving Trustee thereunder.

60. D claimed the Will/Codicil covered the entire REstate and P was not named in either testamentary document, so P never had any immediate interest or entitlement to any part of the REstate as at the date of the Ancestor’s death on 18 August 1933, and neither did P’s father the 6^th son who was also not named in the Will/Codicil.

61. D claimed it was incorrect for P to say “[under the Codicil], apart from certain specific legacies, the residuary estate, …… were settled for ancestral worship” (my emphasis), and there was no such finding in the Cheung Judgment. D noted Cheung J (as he then was) only held no AWT was created. D suggested common sense dictated there could not be 2 REstates in the same Estate.

62. D disagreed with P’s allegation it was “recorded” in the Cheung Judgment that whilst the 3 Sons were named as residuary legatees in the Will it was common ground they were not to take the REstate beneficially (see footnote 24 above), and claimed that on proper reading of the Cheung Judgment/Directions as a whole, they only concerned lands under the DFA that were to be distributed to the 8 fongs rather than to just the 3 Sons. D claimed the 95/96 Proceedings only dealt with the validity of the DFA rather than the validity/construction of the Will. In any event, the land allotted to P as the sixth Beneficiary under the DFA being “Fish Pond No 3” (ie Lots 1288H and 1288I in DD115) was not under the name of the Ancestor at the time of his death or on the date of the DFA but under the names of the 3 Sons and 7^th son. So P’s or the 6^th fong’s interest stemmed from the DFA only and could not extend beyond that into the Estate, hence P had no locus standi to be administrator of the Estate let alone any priority to a grant.

63. On the other hand, Lau Yue Kui obtained a grant to the Estate in his capacity as personal representative of the estate of his father (ie the 4^th son and a residuary legatee under the Will) in 1995, and he then became a Trustee of the trusts under the DFA. D claimed Lau Yue Kui’s dual capacities as administrator of the Estate and last surviving Trustee of the trusts under the DFA were needed for implementing the DFA as some lands thereunder had not yet been vested from the Estate to the 3 Sons as residuary beneficiaries of the Will and then as Trustee of the DFA. It was said such vesting was necessary before such lands could be distributed to the 8 fongs. The distribution of part of the Estate assets pursuant to the DFA by the 3 Sons could not affect or alter the original testamentary disposition under the Will. In any event, the grant to Lau Yue Kui was accepted by all parties to the 95/96 Proceedings up to his demise on 9 August 2015. D obtained D’s 4^th son LA, and in such capacity he was entitled to apply for and to obtain D’s Ancestor LA, which facts were recited in D’s Ancestor LA (see paragraph 47 above).

64. D claimed hierarchical seniority within the Lau family could not displace priority to a grant in respect of the Estate under law, and in non-contentious proceedings P had no priority in his own right merely as a grandson. The Ancestor left the Will/Codicil in which P was not named as either executor or beneficiary, and P was not a personal representative of any of the residuary beneficiaries of the Estate. As D had priority to a grant in his capacity as the personal representative of the 4^th son (former administrator of the Estate) and did not have to give notice to any person in common form application for administration, there was no need for any person to renounce before D could apply for D’s Ancestor LA. D claimed the Priority Issue was misconceived.

VI. LEGAL PRINCIPLES: STRIKING OUT

65. The Summons was made under Order 18 rule 19 of the RHC and the inherent jurisdiction of the court. Order 18 rule 19(3) of the RHC provides that “[this] rule shall, so far as applicable, apply to an originating summons …… as if the summons …… were a pleading”. The principles governing striking out applications are well established. Hong Kong Civil Procedure 2017 provides as follows:[27]

“…... It is only in plain and obvious cases that the court should exercise its summary powers to strike out the indorsement on any writ or any pleading under this rule. There should be no trial upon affidavit. Disputed facts were to be taken in favour of the party sought to be struck out. Nor should the court decide difficult points of law in striking out proceedings. The claim must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out. ……

Plain is not the same as simple and obvious is not the same as short. …… The mere fact that the case is weak and not likely to succeed is no ground for striking it out ……

It is for the party seeking to strike out an indorsement or pleading to demonstrate that the case is a plain and obvious one in which the other party’s claim is bound to fail. ……”

But the fact a question of law appears difficult/obscure does not necessarily preclude the court from striking out a claim if it is satisfied it has all the necessary information to decide the question, and has come to the conclusion after full argument in the face of all relevant information that the case is plainly and obviously one for striking out. In such circumstances, the court “should not decline to do so on the ground that the issues are difficult or complicated”.[28]

66. No reasonable cause of action A reasonable course of action means “a cause of action with some chance of success when only the allegations in the pleadings are considered ……”.[29]

67. Frivolous or vexatious claim Hong Kong Civil Procedure 2017 states that:[30]

“…… A proceeding is frivolous when it is not capable of reasoned argument, without foundation or where it cannot possibly succeed. A proceeding is vexatious when it is oppressive and/or lacks bona fides. For instance, it is vexatious and wrong to make solicitors, or others, parties to an action merely in order to obtain from them discovery or costs ……

In Yifung P roperties Ltd v. Manchester Securities Corp, (unrep., HCA1341 and 1359/2014, [2015] H.K.E.C. 2182), Au Yeung J stated:

12. … Where a litigant brings a claim knowing that there is no substance in it or that it is bound to fail, or if the claim is on its face so manifestly misconceived that it can have no prospect of success, it may be deemed frivolous and abuse of process …… the court should see what the party in question knew or ought to have known if he had gone about the matter seriously ……

13. … Vexatiousness implies the doing of something over and above that which is necessary for the conduct of the litigation and suggests the existence of some spite, or desire to harass the other side to the litigation, or some other improper motive ……

14. To decide that the litigant has been frivolous or vexatious and thus abused the process of the court is a serious finding to make, for it will generally involve bad faith on his part and one would expect the discretion to be sparingly exercised.[31]

In exercising a judicial discretion to determine whether proceedings are vexatious …… the court may admit affidavit evidence ……”

68. Abuse of the process of the court Order 18 rule 19(1)(d) of the RHC confers upon the court powers hitherto exercised under the court’s inherent jurisdiction where there appears to be an abuse of the process of the court. The process of the court must be used bona fide and properly, and the court will, in a proper case, summarily prevent its machinery from being used as a means of vexation/oppression in the process of litigation.[32] Hong Kong Civil Procedure 2017 states as follows:[33]

“ The categories of conduct rendering a claim frivolous, vexatious or an abuse of process are not closed but depend on all the relevant circumstances and for this purpose considerations of public policy and the interests of justice may be very material.

In Tam Chi Kok, it was said that:

“[t]his is a case where a plaintiff commences an action when he does not know how to formulate his case. In other words, he sues before he knows what to sue, or before he can make up his mind as to the subject matter of his complaint. …… and of course it is of the function of a statement to set out precisely what a plaintiff wishes to sue and ask the court to grant him relief about.””

Likewise, To J in Falcon Private Bank Ltd v Borry Bernard Edouard Charles Limited & anor said as follows:[34]

“(b) A party should know his case and be in a position to identify the relevant evidence when he starts a claim. It is an abuse of the process of the court for a party to start a case without a solid foundation hoping that evidence will turn up during the course of the proceedings, whether by discovery or otherwise: Nomura International plc v Granada Group Ltd [2008] Bus LR 1 at §37 per Cooke J; New China Hong Kong Group Ltd v Ng Kwai Kwai Kenneth, HCA 519/2010 at §70 per Fok JA. ……”

VII. DISCUSSION

69. Nature of Priority Issue It was common ground that following the death of Lau Yue Kui, former administrator of the Estate, new administration (with will) de bonis non should be granted for the Estate. D had since obtained D’s Ancestor LA. P contended this was done surreptitiously behind the back of the 5 Fongs, but D argued there was no need to give advance notice to them. These skirmishes all boiled down to the Priority Issue (see paragraph 7(a) above), ie who should be entitled to such grant as a matter of priority.

70. Mr Yau sought to characterise the OS essentially as a challenge by P as grandson against D as great-grandson for obtaining grant of administration (with will) de bonis non in respect of the Estate. But in dealing with the Priority Issue, it is largely a matter of applying the statutorily prescribed order of priority to the present context rather than a clash of generations within the familial hierarchy.

71. Priority for administration (with will) de bonis non Tristram and Coote’s Probate Practice states that administration (with will) de bonis non is required under the following circumstances:[35]

“13.12 Before a grant of administration (with will) de bonis non can be made, it must be established that there is no chain of executorship …… and all executors named in the will of the deceased must be cleared off ……, ie by reciting their death or renunciation. …… The manner in which the chain of representation is broken must be shown in the oath ……

13.13 Where the previous grant was one of probate, administration (with will) may be granted to the person next in order of priority under NCPR SI 1987/2024 r 20, ie:

(a) any residuary legatee or devisee holding in trust for any other person; or if cleared off;

(b) any other residuary legatee or devisee including one for life, or where the residuary estate was not wholly disposed of by the will, any person entitled to or sharing in the undisposed-of estate;

and on clearing off all members of the above classes, to the lower classes under r 20, in order of priority.

……

13.15 Where the former grant was of administration (with will), the order of priority is the same. If the previous grantee was one of the residuary legatees and devisees, a grant de bonis non may be made to another residuary legatee or devisee; if he was the sole residuary legatee and devisee, the grant should be taken by his personal representative, ……” (my emphasis)

72. Here, there was no dispute (a) the chain of executorship was broken as none of the 3 Sons being the executors named in the Will had proved the Will/Codicil during their lifetimes, (b) the 3 Sons as the executors named in the Will had since passed away and hence had been cleared off, (c) part of the Estate was left unadministered at the time when Lau Yue Kui passed away,[36] and (d) the person entitled to grant of administration (with will) de bonis non in respect of the Estate should be next in order of priority under the law. In respect of (c) above, in the course of oral submissions, Mr Wong sought to bolster this point by suggesting the REstate comprised land and property outside those divided and allotted to the 8 fongs under the DFA (see paragraph 58 above), but Mr Yau disagreed. But in light of the matters discussed in paragraphs 17 and 31 above, and the observation by Bokhary PJ in the CFA Judgment that the 1946 Division dealt with “the Ancestor’s entire estate comprising everything he owned after the [1933

Division]” (see paragraph 28 above), I am not persuaded there was sufficient evidence for me to accept Mr Wong’s proposition. In any event, it is unnecessary to resolve this issue given the parties’ common stance in (c) above.

73. Mr Wong referred to Tristram and Coote’s Probate Practice to say the general rule applicable to grant of LA is that where possible administration is granted to one or more of the persons taking a beneficial interest in the estate of the deceased,[37] but the relevant consideration here was not the order of priority for grant of LA for a person who dies wholly intestate (as governed by rule 21 of the Non-Contentious Probate Rules (“NCPR”)) but that for grant of administration (with will) de bonis non (as governed by rule 19 of the NCPR). Rule 19 of the NCPR provides as follows:

“The person or persons entitled to a grant of probate or administration with the will annexed shall be determined in accordance with the following order of priority, namely –

(i) the executor;

(ii) any residuary legatee or devisee holding in trust for any other person;

(iii) any residuary legatee or devisee for life;

(iv) the ultimate residuary legatee or devisee or, where the residue is not wholly disposed of by the will, any person entitled to share in the residue not so disposed of (including the Official Administrator) or, subject to rule 25(3), the personal representative of any such person: Provided that where the residue is not in terms wholly disposed of, the Registrar may, if he is satisfied that the testator has nevertheless disposed of the whole or substantially the whole of the estate as ascertained at the time of the application for the grant, allow a grant to be made (subject however to rule 37) to any legatee or devisee entitled to, or to a share in, the estate so disposed of, without regard to the persons entitled to share in any residue not disposed of by the will;

(v) any specific legatee or devisee or any creditor or, subject to rule 25(3), the personal representative of any such person or, where the estate is not wholly disposed of by the will, any person who, notwithstanding that the amount of the estate is such that he has no immediate beneficial interest therein, may have a beneficial interest in the event of an accretion thereto;

(vi) any legatee or devisee, whether residuary or specific, entitled on the happening of any contingency, or any person having no interest under the will of the deceased who would have been entitled to a grant if the deceased had died wholly intestate.” (my emphasis)

74. In applying the order of priority under rule 19 of the NCPR to the Estate, Mr Yau submitted the relevant category for P would be category (iv) above:

(a)   Category (i) above was irrelevant since the 3 Sons as executors named in the Will had all passed away and P was not a named executor.

(b)   Mr Yau suggested the 3 Sons were residuary legatees or devisees holding 8 parts of the Estate in trust for the 8 sons/ fongs and the 9^th part as common property and for ancestral worship, but he did not say P was a residuary legatee or devisee “holding in trust for any other person” or “for life”, so categories (ii)-(iii) above were also irrelevant.

(c)   Category (iv) had 3 sub-categories, ie (1) the ultimate residuary legatee or devisee, (2) (where the residue is not wholly disposed of by the will) any person entitled to share in the residue not so disposed of, or (3) (subject to rule 25(3) of the NCPR) the personal representative of any such person in (1) or (2) above. P did not put himself forward as any personal representative, so sub-category (iv)(3) above was inapplicable. But P claimed to be either the ultimate residuary legatee or devisee of the Estate (sub-category (iv)(1) above) or alternatively a person entitled to share in the residue of the Estate not disposed of by the Will/Codicil (sub-category (iv)(2) above). According to Tristram and Coote’s Probate Practice, “[subject] to the preference of vested to contingent interests …… all persons in this class [equivalent to categories (iv)(1)-(2) above] are equally entitled to a grant”.[38]

75. On the other hand, D claimed he fell within category (iv)(3) above as personal representative of the ultimate residuary legatee or devisee, ie he was the administrator of the estate of the 4^th son who was the last surviving ultimate residuary legatee or devisee named in the Will. D’s case was starkly simple: (a) the 4^th son (together with the 2^nd and 3^rd sons) being the executors were expressly named as the residuary beneficiaries under Clause 3 (see paragraph 20 above), (b) the 2^nd and 3^rd sons predeceased the 4^th son who became the last surviving residuary legatee (see paragraph 30 above), (c) D was the administrator of the estate of the 4^th son under D’s 4^th son LA (see paragraph 6 above), so (d) he was entitled to the grant of D’s Ancestor LA (see paragraph 72 above and rule 19(iv) of the NCPR). According to Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, “[on] clearing off all prior classes, a grant may be made to the personal representative of any residuary legatee or devisee (but not one for life, or one holding in trust for any other person) or of any person entitled to share in any residue not disposed of by will. All have an equal right to the grant”.[39] Further, D claimed he himself had beneficial interest in the REstate as a result of his interest in the estate of his father Lau Yue Chun who in turn had interest in the estate of the 4^th son (see paragraph 58 above), but P did not have any interest in the REstate since he was not a descendant of any of the 3 Sons being the residuary legatees/ devisees of the Estate, and hence he had no priority under rule 19 of the NCPR.

76. Mr Wong fairly accepted it was for D to show it was plain and obvious as a matter of law and fact the 3 Sons were the only ultimate residual beneficiaries and P’s alleged interest in the REstate under categories (iv)(1) and (iv)(2) above was unarguable, otherwise it could not be said there was no reasonable cause of action, and on such basis it also could not be said P’s claim was abuse of the court’s process and/or frivolous or vexatious.

77. Mr Yau submitted the Will, Codicil and DFA should be read together, and it would be inappropriate to segregate the Will/Codicil from the DFA as Mr Wong would have me do. I proceed below to consider all 3 instruments, but it is important to start with some undisputed matters to put the discussion in context:

(a)   The question of priority concerns appointment of an administrator for a deceased’s estate (ie the Ancestor’s Estate).

(b)   Where the relevant deceased (ie the Ancestor) has made testamentary instrument(s) (ie the Will/Codicil) that contains his final testamentary dispositions, then subject to (c) below, it is commonly thought that such testamentary instrument(s) are irrevocable after death.

(c)   A deed of family arrangement (ie the DFA) made subsequent to the death of a testator (ie made about 13 years after the Ancestor passed away) is not a testamentary instrument of the deceased testator (ie Ancestor), but is simply a deed that records distribution of a deceased testator’s estate (ie the Estate) where such distribution is not made in accordance with the deceased testator’s testamentary instrument(s) (ie the Will/Codicil), which agreement or arrangement thereby allows a/the beneficiary(ies) mentioned in such testamentary instrument(s) (ie the 3 Sons named in the Will as the Ancestor’s residuary beneficiaries) to “rewrite” provisions of a will by redirecting his/their benefit to other person(s) of his/their choosing whether or not named in such testamentary instrument(s) (ie the 8 sons/fongs). The purpose of such deed is to record the agreed distribution for posterity (ie the provisions of the DFA and the provisions concerning vesting orders etc in the Cheung Directions that gave effect to the DFA) and to protect the executor(s) from a subsequent claim (ie the requirement for the beneficiaries of the DFA to give indemnity and release to the executors under the DFA – see paragraphs 27 and 43 above).

I now turn to the Will, Codicil and DFA.

78. Will A residuary gift is one that is intended to pass everything not otherwise disposed of by the will, which is normally preceded by a direction to get in the assets and to pay all debts, funeral, and testamentary and administration expenses, and is often the last dispositive provision in a will.[40] Clause 3 dealt with the Ancestor’s residuary gift. Three things are of note:

(a)   Since there were no other devises or bequests in the Will, the whole of the Estate fell into the residue and became the REstate. This was borne out by the use of the words “all the rest residue and remainder of my estate both real and personal and wheresoever situate” in Clause 3.

(b)   A gift expressed to be to the donee without words of limitation is in terms an absolute gift.[41] Clause 3 did not contain any words of limitation, and in fact expressly spelled out that the gift to the residuary beneficiaries was made “absolutely”. In my view, the residuary gift in Clause 3 was plainly and obviously an absolute gift.

(c)   The residuary gift in Clause 3 was given “unto my Executors …… living at the date of my death in equal shares ……” According to Theobald on Wills, “[words] of division or distribution such as …… “equally” …… makes a tenancy in common. And the use of the word “share” or similar words, with reference to the interest of the legatees, …… has the same effect”.[42]

On the above analysis and as explained in paragraph 20 above, the clear words of Clause 3 showed the Ancestor bequeathed the entire REstate as absolute gift to his executors (ie the 3 Sons) as tenants in common, and there was no undisposed of residue at the time of making the Will.

79. But Mr Yau submitted that notwithstanding such plain words the 3 Sons did not take the REstate absolutely. He submitted it was not common in the 1930s for a person of the Chinese race to make a will let alone an English one, and in a traditional Chinese family the sons shared the estate of their father equally. On such basis, he made the bold submission that the Ancestor might not have testamentary capacity to make a will to gift his REstate (which at the time of making the Will was the same as his Estate) to the 3 Sons “absolutely”. Mr Yau made 2 points in support of this proposition, but did not refer to any legal authority. First, Mr Yau referred to the recitals of the DFA (see paragraph 27 above) that stated the 8 sons were descendants of the Ancestor and as such were entitled to a share in “the said properties”. Secondly, Mr Yau drew support from the Cheung Observation which he claimed to have said that notwithstanding the 3 Sons were named the residuary legatees it was common ground amongst the 8 fongs that the 3 Sons were not intended to take the REstate beneficially (see paragraph 21 above).

80. I am not with Mr Yau. The 2 points he made was premised on the DFA itself or judicial observation on legal dispute over the DFA. It is difficult to understand how the post-death family arrangement under the DFA made by the 3 Sons being residuary legatees or devisees under the Will and the 8 Fongs in 1946 (about 13 years after the death of the Ancestor) could speak of the testamentary capacity of the Ancestor at the time of making the Will in 1930. Whichever way one looks at it, the DFA was not a testamentary instrument by the Ancestor as testator (see paragraph 78(c) above).

81. For the purpose of argument (and in the absence of any expert evidence of Chinese customary law placed before this court), I accept that under Chinese customary law a person of Chinese race had no testamentary power as property was attributable to a family group rather than an individual: [43]

“It was the duty of the living members of the family to pass on to their male descendants both the property they had received from their ancestors and such property as they were able to accumulate by their own efforts. It was the male members of the family who were the co-owners of the property, although the female members were entitled to support out of the assets of the family so long as they remain within it.”

But in the CA Judgment, Nazareth VP said as follows:

“51. …… As I understand the position, it is not in dispute that at the time of the will, of the codicil and of the ancestor’s death, the land in question was not family, clan or tong land and was therefore not subject to CLC [Chinese Law and Custom] under s.13 of the New Territories Ordinance. That position in any case seems to me to be right, for the land was apparently purchased by the ancestor out of his personal trading profits and was his own property.

……

57. …… Likewise, the properties not being family, clan or Tong land, the matter has to be addressed under HKL [Hong Kong Laws]. ……”

Mayo JA went on to say as follows:

“39. There are also other difficulties. Under Hong Kong laws a deceased person’s property passes to his Executors where he has made a will. It is then for the Executors to take such action as may be required to comply with the terms of the will. ……”

82. Plainly, Nazareth VP and Mayo J (the majority of the court) both considered the Ancestor’s testamentary capacity over lands under the Will was governed by Hong Kong law and not by Chinese customary law. Liu J (dissenting) also agreed and set out the law as follows:

“9. Under CLC [Chinese Law and Custom], a Chinese had no testamentary power. The properties, his own or his ancestors’, held by him were to devolve according to CLC [Chinese Law and Custom]. He could express his wish and offer his advice to his descendants by will which must not infringe the rules of succession in CLC [Chinese Law and Custom]. But in Hong Kong, for a great many years it has been held that a domiciled Chinese has full testamentary capacity. In Re Tse Lai-chiu, deceased, [1969] HKLR 159 at pp. 192-193, Hogan, CJ observed:

“There are, however, no similar decisions and no such accepted tradition and practice withholding or restricting the power and right of Chinese to make wills under English law. On the contrary, anyone discharging the functions of a probate judge in Hong Kong can be only too well aware that testamentary capacity in accordance with English Law has been assumed and acted upon by many Chinese members of the community for a long time past, just as individual rather than family ownership has been widely accepted amongst all sections of the community. There is in the 1953 report, which reflects an experienced and influential body of opinion, clear recognition of the wide spread belief in the capacity of Chinese in the colony to make wills according to English law. Whatever might have been the answer if the question had arisen in relation to the ancestral properties of those residing in Hong Kong at the time of concession, it could provide but little justification for withholding the English principles of testamentary capacity from those, be they of Chinese race or otherwise, who have come to Hong Kong in more recent years and acquired property in accordance with the modes and manners now prevalent amongst the diversified commercial community, engaged as it is in worldwide trade and fully adapted to an outlook and way of life very different from that which operated amongst the small rural communities then resident in the territory.”

10. There were earlier assumptions made by our courts of testamentary capacity in cases involving land on the Hong Kong island. See Lau Leung-chi v. Lau Po-tsun, [1911] 6 HKLR 149 and In Re Chan Quan-ee, 15 [1920] HKLR 74. See also Wu Koon-tai and Another v. Wu Yau-loi, [1995] 2 HKC 732 at p.749A. It has not been seriously doubted that the assumed testamentary power enjoys a general application. ……

11. I would accept as an immutable rule to-day that a Chinese inhabitant of Hong Kong may make a will affecting any disposition of land, including land in the New Territories. ……”

83. Neither Mr Wong nor Mr Yau referred to the authorities discussed in paragraphs 81-82 above, which were particularly pertinent as the discussions therein concerned the very Will, Codicil and DFA in question. The CA Judgment was also binding on this court. There was no respectable basis for P to assert the Ancestor had no testamentary capacity to will away the REstate in the terms expressly set out in Clause 3. Hence, Mr Yau’s references to Chinese laws and customs of dividing property amongst all male descendants could not overcome the consequences of the Ancestor having made an English Will in 1930 with legal assistance that willed away the REstate to the 3 Sons as an absolute gift in equal shares.

84. In the OS, P sought determination of the Priority Issue. Both Mr Yau and Mr Wong accepted the governing provision was rule 19 of the NCPR, which is subsidiary legislation under the Probate and Administration Ordinance Cap 10 (“PAO”). But neither counsel referred me to section 13 of the NTO which provides as follows:

“(1) Subject to subsection (2), in any proceedings in the Court of First Instance …… in relation to land in the New Territories, the court shall have power to recognize and enforce any Chinese custom or customary right affecting such land.
(2) In subsection (1), “proceedings” (法律程序) does not include proceedings in respect of or in relation to the Probate and Administration Ordinance (Cap 10), the Intestates’ Estates Ordinance (Cap 73) or the Inheritance (Provision for Family and Dependants) Ordinance (Cap 481).” (my emphasis)

I am not persuaded P could pray in aid Chinese laws and customs to suggest the Will did not mean what it clearly said, ie the entire REstate was bequeathed to the 3 Sons in equal shares absolutely. I will consider Mr Yau’s points in relation to the DFA below.

85. Codicil Mr Yau drew attention to the 1^st paragraph in the Codicil where the Ancestor expressed his wishes and offered his advice to his descendants (see paragraph 23 above), which were followed by certain specific bequests/legacies. The 1^st paragraph in the Codicil referred to the 1933 Division, and then went on to refer to properties (including fish ponds and “surrounded fields” in front of the village) under the Ancestor’s name that “are to be kept and managed in perpetuity for the payment of the designated expenses for paying respect to our ancestors in future”. Mr Yau boldly submitted that since the Ancestor expressed an intention to retain properties in his own name for ancestral worship, the Codicil actually revoked Clause 3 that bequeathed the REstate to the 3 Sons in equal shares absolutely.

86. It was not easy to follow such argument when viewed against some trite and fundamental precepts. Section 19 of the Wills Ordinance

Cap 30 provides as follows:[44]

“Every will shall, with reference to the property comprised in it, be construed to speak and take effect as if it had been executed immediately before the death of the testator, unless a contrary intention appears from the will.”

“The rule in this section applies to the property which is the subject of disposition in the will, whether real or personal ……”[45] “The basic tenet is that general or generic descriptions of property are construed as if the will had been made at the testator’s death and embrace property then forming part of his estate. …… It can also operate to include all the interest a testator had in property at his death: see Chan How Chuen Stephen v Chan Hau Cheong & ors [1997] 3 HKC 138 (CFI)”.[46]

87. The words “all the rest residue and remainder of my estate both real and personal and wheresoever situate” in Clause 3 were plainly general or generic descriptions of property, so Clause 3 would pass property within the meaning of such words used that belonged to the Ancestor at the time of his death. For properties divided/distributed inter vivos to the 8 fongs by the 1933 Division as referred to in the Codicil, they were simply no longer part of the REstate at the death of the Ancestor. I am unable to see how such inter vivos reduction of the REstate would revoke Clause 3 that passed the REstate that belonged to the Ancestor at the time of his death.

88. For properties still under the Ancestor’s name intended for ancestral worship, the Cheung Judgment (as upheld by the CA/CFA Judgments) found the wording of the Codicil showed an intention was there to create an AWT but it had not been realised. What then were the consequences of such finding?

89. In the CA Judgment, Nazareth VP said:

“54. Reverting to the effect of the codicil as a testamentary instrument, much emphasis was placed by Mr Tang [for the appellants] upon the acknowledged testamentary capacity of Chinese persons under [Hong Kong laws], even in respect of land in the New Territories.[47] The ancestor could certainly dispose of what was his own land, as opposed to family, clan or tong land, by will. ……

……

57. The construction of those words [ie the words in the Codicil set out in paragraph 23 above] and their effect would have to be determined under [Hong Kong laws]. Likewise, the properties not being family, clan or Tong land, the matter has to be addressed under [Hong Kong laws]. If there were no [Chinese laws and customs] or it did not apply, the bequest (assuming it were such) would clearly fail under [Hong Kong laws]. ……”

Since the relevant devise for the formation of an AWT failed, the residuary gift in Clause 3 would sweep in properties of which such attempted disposition failed. I cannot see how the failure of an AWT or a mere declaration of intention/motive that failed would revoke an absolute disposition of the REstate to the 3 Sons under Clause 3 that comprised all the property which would satisfy the terms of such description at the death of the Ancestor. Mr Wong prayed in aid Kellett v Kellett in which the House of Lords confirmed that if a testator leaves a legacy absolutely as regards his estate, but restricts the mode of the legatee’s employment of it to secure certain objects for the benefit of the legatee, upon failure of such objects the absolute gift prevails.[48] The Lord Chancellor (Lord Cairns) said “[the] principle is perfectly clear, that where you have a distinct disposition made by a will, that disposition cannot be revoked by a codicil except through the medium and use of words equally clear and distinct”.

90. I am wholly unconvinced the absolute residuary gift in Clause 3 had been revoked by the failed intention to set up an AWT in the Codicil the effect of which was simply to swell the REstate. The fact that the residuary gift to the 3 Sons remained absolute was borne out by the following matters:

(a)   Lau Yue Kui’s affirmation for grant of LA with will in respect of the Estate re-affirmed on 1 June 1995 referred to the Ancestor leaving residuary legatees and devisees in his Will without reference to any property not otherwise disposed of by the Will/Codicil (see paragraph 32 above).

(b)   The LA with will annexed in respect of the Estate granted to Lau Yue Kui on 8 June 1995 only referred to the Will/Codicil on the basis that the Ancestor died testate (see paragraph 31 above).

(c)   There was no or no successful challenge to the grant in favour of Lau Yue Kui in (b) above, and all along it had been accepted by the 8 fongs that the Ancestor died testate.

Mr Yau’s submissions that the Codicil revoked Clause 3 did not sit well with the above matters. If Clause 3 had been revoked (as Mr Yau contended) but the intention to create an AWT failed (as the Cheung/CA/CFA Judgments concluded), it would be as if the Ancestor had left the Will which did not dispose of the REstate, and he would have died at least partially intestate rather than testate (as had been accepted all along). Mr Yau did not explain how his proposition sat with the known/accepted state of affairs that had not been disputed or successfully disputed up to the demise of the former administrator Lau Yue Kui.

91. Mr Wong next referred me to the following proposition on Theobald on Wills:[49]

“(ii) Absolute interest with power superadded

Where there is an absolute gift a superadded power to dispose of the property by will or at the donee’s death does not cut down the absolute gift. And this is the case, though there may be a gift over in default of the donee disposing of the property. And even a superadded power to dispose of the property among a particular class will not cut down the absolute interest previously given.”

I do not quite perceive the relevance of the above legal proposition for I cannot see how the Ancestor’s expressed intention in the Codicil to create an AWT was a superadded “power” to the donee to “dispose of property”. It was, as found by Cheung J (as he then was) and upheld by the CA and CFA, nothing more than a failed motive/intention that did not create any AWT. In any event, even if an AWT were created (which I disagree), the Codicil certainly did not give the donee (presumably trustees of the AWT) power to dispose of property “by will” or “at [the donee’s] death”. On the contrary, the Codicil stated the properties still under the Ancestor’s name “are to be kept and managed in perpetuity” for common expenses and ancestral worship.

92. Thus, up to the time when the Ancestor passed away, his testamentary instruments (ie the Will/Codicil) bequeathed the entire REstate to the 3 Sons in equal shares (ie as tenants in common) absolutely. But Mr Yau submitted in determining who would be the (a) ultimate residuary legatee or devisee or (b) (where the residue is not wholly disposed of by the Will/Codicil) the person entitled to share in the residue not so disposed of under rule 19(iv) of the NCPR for the purpose of a grant of representation in respect of the Estate, it would be necessary to consider what happened after the death of the Ancestor.

93. General principles Before I turn to the DFA it is important to place counsel’s submissions in the proper context. A number of things are of note:

(a)   The DFA made about 13 years after death of the Ancestor was not his testamentary instrument (see paragraph 77(c) above).

(b)   Prima facie the Will/Codicil spoke from death as to the subject matter of the residuary gift (see paragraph 86 above), and I could not see any contrary intention that “appears from the will”.

(c)   Given the intention to create an AWT failed, Clause 3 effectually disposed of or bequeathed the entire REstate save for the specific bequests in the Codicil.

94. Further, it is important to distinguish 3 wholly different concepts:

(a)   The first concept concerns property disposed of and undisposed of by will. Property disposed of by will includes bequests/ devises (eg gift of personalty/land, devise of rent/profits, bequest of chattels etc) and residuary gift. If a testator by his will disposes of all his estate or gifts his entire residuary estate, he will die testate. “Where a testator leaves a will containing no residuary gift …… or which otherwise does not dispose of all his estate, he will die partially intestate”.[50]

(b)   The second concept concerns the extent of property(ies) within a testamentary gift. The prima facie rule that the will speaks from death as to the subject matter of gifts means the subject matter of a residuary gift is prima facie to be construed as comprising all the property which satisfies the terms of such description at the death of the testator, including property acquired by him after he made his will.[51] But upon ascertaining property that satisfies the terms of such description, the extent of such property that eventually passes to the beneficiary(ies) upon administration of the estate may be different from the position at the time of death, eg a gift of the entire residuary estate may be swelled by failure of a specific legacy through lapse, invalidity or from other cause. Thus, Theobald on Wills states as follows:[52]

“A residuary gift is one that is intended to pass everything not otherwise disposed of by the will, including legacies that have failed, even when the language of the residuary gift would not naturally include failed gifts. ……The extent of the property passing under a residuary gift may of course be affected not only by the construction of specific legacies and the incidence of tax and other expenses thereon. ……”

But the question of the extent of property(ies) passing under a residuary gift is separate from the issue of whether or not property has been disposed of by will. It is only when property has been disposed of by will that one comes to the question of ascertaining the extent of property passing under a willed gift.

(c)   The last concept concerns a wholly or partially unadministered estate. Administration of an estate includes getting in assets, paying debts, funeral expenses and testamentary/administration expenses, and making vesting orders. The fact such work may not have been completed some time after the death of the testator[53] does not mean he has not disposed of or bequeathed the relevant property by will. In short, administration of the estate being a post-death matter is wholly different from testamentary disposition being a pre-death act that prima facie speaks from death.

Having clarified these 3 different concepts, I turn to Mr Yau’s submissions.

95. P’s case on DFA Essentially, Mr Yau contended the DFA that was entered into between the 3 Sons as Trustees and the 8 sons/fongs as beneficiaries about 13 years after the Ancestor’s death made P either the “ultimate residuary legatee or devisee” or “any person entitled to share in the residue” “not wholly disposed of by the will” under rule 19(iv) of the NCPR.

96. Ultimate residuary legatee or devisee Mr Yau submitted the DFA was an elaborate scheme that meticulously “served to divide up the [Estate], which had not yet been disposed of after the death of the [Ancestor], was agreed upon and executed on the basis that all 8 Sons or their fongs would take equal share, leaving a very small share (the 9^th Part under the DFA) to be dedicated for the purpose of ancestral worship” (my emphasis).[54] Mr Yau argued the reality (and ultimate position) was all 8 sons/fongs rather than just the 3 Sons who were named as residuary beneficiaries in the Will were to share the Estate equally, thus the 3 Sons were “residuary legatee or devisee holding in trust for” the 8 beneficiaries under the DFA as “ultimate residuary legatee or devisee”, which “understanding” was “recorded” by the Cheung Observation. On such basis, it was said that since (a) P as the sixth Beneficiary was a direct party to the DFA and D was not even born in 1946, and (b) the other first, second, third, fourth, fifth, seventh and eighth Beneficiaries who took their respective share under the DFA had all passed away, P should be considered as the only living “ultimate residuary beneficiary” of the Estate under rule 19(iv) of NCPR.

97. In my view, the above submissions by juxtaposing different concepts were not only confusing but fallacious. First, it was by the Will/ Codicil being testamentary instruments that the Ancestor made testamentary dispositions, but the DFA was a post-death deed of family arrangement by which the residuary beneficiaries under the Will/Codicil (ie the 3 Sons) agreed with others (ie the 8 fongs) to “vary” or “rewrite” the provisions of the Will/Codicil by dividing up the REstate in the way agreed by the 3 Sons (ie the named residuary beneficiaries as well as named executors) and those affected (ie the 8 fongs). Secondly, as explained in paragraph 94 above, not having fully disposed of the residue of an estate is quite different from not having fully ascertained the extent of the property within a residuary gift (ie testamentary disposition under will) that passes to the beneficiary and/or not having fully administered the estate.

98. In the circumstances, it was conceptually incorrect to refer to the Estate which “had not yet been disposed of after the death of the [Ancestor] ……” (see paragraph 96 above) because testamentary disposition by the Ancestor could only occur pre-death and not post-death, which reflects the general principle that a will is irrevocable upon death. I have also explained in paragraphs 78-84 above that the Ancestor by the Will did dispose of the entire REstate to the 3 Sons in equal shares absolutely, so (a) upon due administration of the Estate the REstate would vest in and pass to the 3 Sons as residuary beneficiaries in accordance with the terms of Clause 3 and neither the 6^th son nor P (who were not named as executors or beneficiaries in the Will/Codicil) would have any interest in the REstate,[55] and (b) if there was anything incomplete/uncertain it could only have been the extent of the property(ies) in the REstate that was/were to pass to the residuary beneficiaries (ie the 3 Sons) and/or whether the Estate had been fully administered (and it was common ground that part was still unadministered).

99. I have also in paragraph 77(c) explained why the DFA being a post-death deed of family arrangement was not a testamentary instrument. By the time the DFA was made the Ancestor had passed away, so the DFA could not and was not concerned with his testamentary disposition, and it could not and did not make P and/or any of the 5 Fongs a residuary beneficiary of the REstate. Quite plainly, the DFA came about because the 8 fongs came to an agreement to re-arrange the distribution of the REstate once and for all in order to compromise the family discord that arose after the 1933 Division (see paragraphs 25 and 40 above). Such understanding reached by the 8 fongs was consistent with the Recitals of the DFA that stated it was the first to eighth Beneficiaries who requested the 3 Sons to divide up “the said properties” among the 8 beneficiaries as descendants of the Ancestor so they could share “the said properties” (see paragraph 27 above). It is also not inconsistent with the Cheung Observation. By the time of the 95/96 Proceedings, the DFA had been carried out and put into effect for decades, and the 8 fongs had accepted the 1946 Division (see paragraphs 28, 29 and 40 above). So obviously it was “common ground” before Cheung J (as he then was) that the 3 Sons were not intended to take the REstate beneficially even though they were named as the residuary legatees. Such observation did not challenge the vitality of Clause 3 as the Ancestor’s testamentary disposition, especially when the subject matter of dispute in the 95/96 Proceedings were not the Will/Codicil but the validity or otherwise of the DFA. I also note the CFA Judgment also recognised these were family arrangements and did not suggest they were testamentary dispositions (see paragraph 28 above).

100. Thus, even though some of the relevant lands might still be registered in the names of the 3 Sons (see paragraph 36 above) or might still be registered in the name of the Estate and yet to be vested in the 3 Sons (see paragraph 63 above) or yet to be collected into the Estate (see paragraphs 24, 37 and 62 above which referred to certain lands registered in the names of the 7^th son and Lau Pang Shi), by virtue of the agreement in the DFA with the 8 Fongs for redistribution of the Estate, the 3 Sons (who as executors under the Will were required to administer the Estate and who as residuary beneficiaries were entitled to the REstate under the Will/Codicil) became the Trustees of “the said properties” and the first to eighth Beneficiaries thereby derived beneficial interest in their respective shares of “the said properties”. Consequently, I agree with Mr Wong that it was clear and obvious that P’s interest in the lands divided/allotted to him as the sixth Beneficiary stemmed from the contractual arrangement in the DFA to which he was a party, and not from the Estate and/or the Ancestor’s testamentary instruments. That being the case, P could only enforce his interests and rights against the 3 Sons as Trustees under the DFA and/or the trustee in succession upon their demise, and not against the Estate and/or its personal representative.

101. On such proper understanding of the DFA, I also agree with Mr Wong the interest of the 3 Sons as residuary beneficiaries was governed by the Ancestor’s testamentary instruments (ie the Will/Codicil) rather than the reality of the re-distribution of the REstate pursuant to the DFA. In my view, it was plain and obvious P was not the ultimate residuary legatee or devisee of the Estate within the meaning of rule 19(iv) of the NCPR merely because P was the sole surviving party to the DFA. Rather it was the 3 Sons (who all survived the Ancestor) who were the ultimate residuary legatees or devisees as no part of the Estate was left undisposed of under the Will/Codicil, and the 4^th Son was the last surviving ultimate residuary legatee or devisee since the 2^nd and 3^rd sons both predeceased him. Indeed, although the relevant probate documents were not placed before the court, D claimed to be interested in the REstate because he was a beneficiary of the estate of his father Lau Yue Chun who in turn was a beneficiary of the estate of the 4^th son being the last surviving ultimate residuary legatee or devisee of the Estate.

102. Before I leave this point, I should mention that Mr Wong cited the case of In the Estate of Chak Chiu Hang which held that (a) the plaintiff who was a kit fat wife of a deceased intestate was entitled to a grant of LA to his estate in preference to the defendant who was his father, (b) under the Probates Ordinance 1897 LA of the property of a deceased intestate (of whatever nationality) must be taken out before his estate could be administered, and (c) the position of a widow in the Chinese social organisation was, having regard to the long established practice of the court granting LA to a surviving kit fat or tin fong, no ground of itself for exercising the discretion of the court under section 33 of the Probates Ordinance 1897 adversely to her claim to administer her deceased husband’s estate.[56] Thus, even though it might be said that under the Statute of Distributions distribution of land and property of a Chinese intestate took place in accordance with law relating to Chinese succession, the machinery for representation of intestates followed English law for all residents in Hong Kong whether of Chinese race or not.

103. Mr Wong wished to pray in aid this case to show there was segregation between representation and distribution of estates. But Mr Yau submitted this should not be applied unreasonably or illogically to suggest that priority of grant should be divorced from beneficial interest in an estate in the modern context. Having carefully considered In the Estate of Chak Chiu Hang, I find I am unable to draw assistance from such authority. This case concerned the situation where a person died wholly intestate, and in such early days there was no local law as to who would be entitled to grant of LA, so such grant was made to persons entitled according to English law. This was a far cry from the present situation where the Ancestor died testate and named executors in the Will, and priority of grant was governed by rule 19 of the NCPR. Further, the distribution considered In the Estate of Chak Chiu Hang was in respect of the estate of the deceased intestate, but here the point made was about distribution under the DFA which was a matter of family arrangement amongst the 3 Sons and 8 fongs. In any event, In the Estate of Chak Chiu Hang did not sway me from the conclusions in paragraphs 98-101 above.

104. Entitled to residue not wholly disposed of Mr Yau submitted that alternatively if the Will was not meant to be distributive for the purpose of disposing of the Estate as per the Cheung Observation (ie the situation “where the residue is not wholly disposed of by the will” under rule 19(iv) of NCPR), P should be considered to be “a person entitled to share in the residue not so disposed of” by the Will/Codicil. Mr Yau suggested there was property not wholly disposed of by the Will/Codicil because the 9^th part under the DFA was common property (ie not intended to be allotted to the 8 fongs beneficially) and for ancestral worship, so as a result of the subsequent DFA, P was “a person entitled to share in the residue not so disposed of by the will” under rule 19(iv) of the NCPR.

105. Again, P erroneously juxtaposed different concepts. In Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, the expression “residue not wholly disposed of by will” (my emphasis) in the English equivalent of rule 19(iv) of the NCPR “includes cases where there is no disposition of residue, an incomplete disposition thereof or the lapse of a share of residue”.[57] The fact the DFA redistributed “the said properties” by way of family arrangement between the 3 Sons as Trustees on the one part and the first to eighth Beneficiaries on the other part did not mean the REstate had not been wholly disposed of “by will”. On the contrary, I have found the REstate had been wholly disposed of under the Will/Codicil within the meaning of rule 19(iv) of the NCPR. In the circumstances, there is no need for me to further consider this limb.

106. But even if Mr Yau’s submissions that the 9^th part under the DFA being common property and for ancestral worship was “the residue

…… not wholly disposed of”by the Will/Codicil was correct, it would not have assisted P because none of the 8 fongs were beneficially entitled to the 9^th part and P was not “any person entitled to share in the residue not so disposed of” (my emphasis).

107. Proviso in rule 19(iv) of NCPR Rule 19(iv) of the NCPR further provides that even though “the residue is not in terms wholly disposed of”, if the testator has disposed of the whole or substantially the whole of the estate as ascertained at the time of the application for the grant, the court can “allow a grant to be made (subject however to rule 37) to any legatee or devisee entitled to, or to a share in, the estate so disposed of, without regard to the persons entitled to share in any residue not disposed of by the will”. In light of my conclusions in paragraph 105 above, there would be no need for me to go further to consider this proviso which I find to be irrelevant.

108. But in case I am wrong and the residue was not in terms wholly disposed of in that the 9^th part under the DFA was “undisposed of by the will” (which I disagree), there was still insufficient material to show this proviso would be applicable. Mr Yau submitted the 9^th part was a small part compared with parts divided and allotted to the first to eighth Beneficiaries. Whilst I accept it was possible that in due course upon completion of administration of the Estate and payment of debts and common/other expenses payable from the 9^th part such 9^th part might be significantly reduced, it was common ground that part of the Estate was still unadministered and the affirmation evidence before this court did not aid in understanding the value/size of the 9^th part as compared with the remaining part of the REstate (bearing in mind that some lands had been resumed) to see whether “substantially the whole of the estate as ascertained at the time of the application of the grant” (my emphasis) and not at the time of death had been disposed of.

109. Personal representative On clearing off prior classes, a grant may be made to the personal representative of (a) the ultimate residuary legatee or (b) (where the residue is not wholly disposed of by the will) any person entitled to share in the residue not so disposed of.

110. Mr Yau submitted that in 2015-2016 D (a nephew of Lau Yue Kui and a grandson of the 4^th son) applied for D’s Ancestor LA in respect of the Estate on the footing that he was the personal representative of the 4^th son under LA de bonis non,[58] and not because he was entitled to share in the REstate. He argued that under the DFA the 4^th son was the direct fourth Beneficiary and P was the direct sixth Beneficiary (as the 6^th son had passed away), so they both belonged to the class of (a) the ultimate residuary legatee or (b) (where the residue is not wholly disposed of by the will) any person entitled to share in the residue not so disposed of. Mr Yau drew attention to rule 25(3) of the NCPR which provides as follows:

“Unless the Registrar otherwise directs, administration shall be granted to a living person in preference to the personal representative of a deceased person who would, if living, be entitled in the same degree and to a person not under disability in preference to an infant entitled in the same degree.”

It was said that since P is a living direct beneficiary under the DFA, he should have priority over D who is merely personal representative of the 4^th Son being another direct beneficiary.

111. I accept the proposition in Tristram and Coote’s Probate Practice that:[59]

“13.21 Where the will appointed several residuary legatees and devisees, one or some of whom are still alive, but there is some difficulty in making a grant to a living residuary legatee and devisee, or in obtaining the renunciation of those who are alive, those living must be cited to accept or refuse a grant or an application must be made for an order …… by-passing their right to a grant, at the probate registry at which the application for the grant is to be made.”

But the short answer to Mr Yau’s submissions was that, according to the above analysis, it was plain and obvious P was neither the ultimate residual beneficiary nor (given that the REstate was wholly disposed of by the Will/Codicil) any person entitled to share in the residue not wholly disposed of. Rather, on the death of the 4^th son being the last surviving residuary beneficiary, it was his personal representative who has priority to apply for administration (with will) de bonis non. This explained why it was Lau Yue Kui (as personal representative of the 4^th son) who obtained de bonis non grant in respect of the Estate. Hence, when Lau Yue Kui passed away, it was D (who had obtained a de bonis non grant in respect of the estate of the 4^th son) who had priority to a de bonis non grant in respect of the Estate. There is no merit to P’s contention, but I am unable to understand Mr Wong’s reliance on rule 25(1) of the NCPR as P and D were not “entitled in the same degree”.

112. Legislative intent Mr Yau submitted P’s contentions accorded with the legislative intent of rule 19 of the NCPR when interpreted purposively, which was to grant priority to those intended by the testator (eg executors expressly named in the will under rule 19(i) of the NCPR) and then to those who enjoyed immediate beneficial interest (eg residuary legatee under rule 19(ii), (iii) or (iv) of the NCPR) or non-immediate beneficial interest (see rule 19(v) of the NCPR) in the estate. Mr Yau contended that other than the executor, rule 19 of the NCPR grants priority to the one who is most concerned with due administration of the estate, who normally is the one most concerned with getting his beneficial share under the estate. On such basis, Mr Yau suggested that priority of entitlement to grant should be ranked according to the extent of the competing parties’ respective beneficial interest in the estate.[60]

113. Whilst I do not have to quarrel with such propositions for the purpose of the Summons, I am unable to agree when Mr Yau went on to suggest that as a residuary beneficiary P “had a heavy stake in the Ancestor’s Estate which remains unadministered”, especially when the 6^th fong had yet to obtain the relevant vesting order under the Cheung Directions. Again, Mr Yau juxtaposed testamentary disposition which determines who was the ultimate residuary legatee or devisee and/or the person entitled to share in the residue that was not disposed of by the will with the very different concept of administration of the Estate. Here, whilst part of the Estate was still unadministered, the entire REstate had been disposed of by the Will/ Codicil.

114. In light of the above, it is unnecessary for me to consider Mr Yau’s example of somebody who dies without a will but is survived by

his spouse by which example Mr Yau suggested the spouse would have priority to grant of LA “because under our intestacy rules, the spouse gets on top of the statutory gift of $500,000, 50% of the residuary estate of the intestate”. He also referred to the English practice of preferring the beneficiary who has the largest interest in the estate in Tristram and Coote’s Probate Practice,[61] but the learned text went on to say as follows:

“14.26 This is not, however, obligatory upon the court. Sir George Lee said:

‘Though it is a good general rule to grant administration to the largest interest, yet that is only introduced by practice, and not by any positive law, and the court is not obliged to grant it to the largest interest’.”

115. Full and frank disclosure Mr Yau also complained D’s affirmation by administrator re-filed on 22 December 2015 only mentioned the 3 Sons as named residuary beneficiaries in the Will without reference to the DFA or to the fact that the 5 Fongs took a substantial share of the beneficial interest under the Estate, and failed to provide an accurate picture to the Probate Registry to enable a correct assessment of the priority to grant, which in turn heightened concern given the ex parte nature of the application for D’s Ancestor LA and the duty of D as applicant and his legal advisers to proceed with the highest good faith to make full and frank disclosure of all material facts/matters to the court. Mr Yau submitted such failure is a ground for revocation of grant.[62] But in my view, such submissions could not aid P given my rejection of the more fundamental underlying proposition that P had beneficial interest in the REstate as distinct from interests and rights against the Trustees under the DFA (now embodied in the Cheung/CA/ CFA Judgments and Cheung Directions).

116. Rights of residuary beneficiary Mr Wong cited William, Mortimer and Sunnucks on Executors, Administrators and Probate for the proposition that before the residue was ascertained all a residuary beneficiary had was the right (ie a chose in action against the executor) to secure/enforce proper administration and distribution of the estate rather than any beneficial interest in the residue because until administration was complete it could not be said what the residue, when ascertained, would consist or what its value would be [63] (see also Commissioner of Stamp Duties (Queensland) v Livingston[64] and Lall v Lall[65]). Mr Wong reminded that the Estate was in fact not fully administered and the REstate had not been ascertained at the time of the DFA, and he further complained that P did not say whether and when the REstate had been fully administered “so that the residue of the [Estate] or the [REstate] will come into existence nor which part of the residue P is interested in”.

117. I am unable to understand the relevance of the above proposition. This reflected misunderstanding as to administration of the estate and the order of priority. The latter is governed by rule 19 of the NCPR which is quite irrespective of whether or not the beneficial interest in a residuary gift has fallen in upon administration of the estate. The suggestion that a residuary legatee/devisee cannot seek a grant of representation because he has no beneficial interest before administration of the estate is complete would render rule 19(ii)-(iv) of the NCPR would be meaningless. The whole purpose of seeking a grant of representation is to enable the estate to be properly administered and distributed, so it is strange that the residuary legatee/devisee cannot seek such grant under rule 19 of the NCPR before the estate is administered and he acquires beneficial interest. By that time, he does not need a grant any more.

VIII. CONCLUSION

118. By reason of the above matters, the answer to the Priority Issue is plainly and obviously that upon the death of Lau Yue Kui, former administrator of the Estate, LA with will annexed de bonis non in respect of the Estate should have been granted to D as a matter of priority, and P did not come within the categories under rule 19 of the NCPR. That being the case, P’s claim against D in the OS must be struck out and dismissed, and I so order. There is therefore no need for any further directions hearing for the OS referred to in paragraph 12(e) above.

119. There is no reason why costs should not follow event. However, I bear in mind the Removal Issue was not considered at the Hearing of the Summons, and I also note the further concerns referred to in Part II above. I therefore grant a costs order nisi as follows:

(a) P do pay D 75% of the costs of and occasioned by the Summons (including all costs reserved if any);

(b) P do pay D costs of the present proceedings by way of the OS and the Notice (including all costs reserved if any),

and all of the above costs are to be taxed if not agreed.

(Marlene Ng)
Deputy High Court Judge

Mr Albert Yau and Mr Leo Wong, instructed by Hau, Lau, Li & Yeung, for the plaintiff

Mr Alexander Wong, instructed by Chui & Lau, for the defendant

[1] [1998] 3 HKC 562, 611

[2] Grant No 3294/1995

[3] HCAG13833/2015

[4] HCAG17769/2015

[5] so there was no need to further refer to D’s 1^st, 2^nd and 3^rd affirmations for the purpose of the Summons

[6] on such basis Mr Wong would not rely on paragraphs 19-28 of his written submissions dated 9 November 2016, and he further confirmed that paragraphs 16-18 thereof were the explanatory background rather than the main thrust of his submissions on the Priority Issue

[7] CACV33/1998 & CACV59/1998 (unreported, 29 January 1999)

[8] Re Lau Wai Chau [2000] 1 HKLRD 924

[9] ie payment of the Ancestor’s just debts and funeral/testamentary expenses

[10] the 1^st son predeceased the Ancestor and Lau Yu Hi (son of the 2^nd son) was adopted to continue the line of the 1^st son

[11] by this time the 1^st son had passed away, so the 1^st fong was represented by the 1^st son’s adopted son Lau Yu Hi

[12] including ancestral graves, ancestral hall, 4 houses and surrounding land

[13] at p 927

[14] HCAP10/2001, Chung J (unreported, 10 March 2006) para 14

[15] Chung J at para 11 of his judgment explained that “at the time of the [Ancestor’s] death, there were still real properties (fish ponds, paddy fields and houses located in the Tung Shing Lane area in Yuen Long and some properties in the Mainland) which remained undistributed (“the undistributed properties”)”

[16] ie distribution of lands and businesses in Hong Kong and Mainland China, and the parties taking exclusive possession and control of the land and receiving rent derived from it

[17] see p 595-596 of the Cheung Judgment

[18] and part of the proceeds of sale of properties in Mainland China had not been distributed as provided in the DFA

[19] paragraph 13 of the Cheung Directions referred to “usual indemnity and release to [Lau Yue Kui] as the administrator of the estate of [the Ancestor] deceased in a form to be agreed, failing agreement to be settled by the Registrar of the High Court”

[20] [2000] 1 HKLRD 924, 931

[21] D claimed (a) P declined to supply a copy of the sale and purchase agreement to the administrator of the Estate, (b) it appeared P was pressed to complete such sale since the purchaser took out HCMP129/2008 to enforce the sale and purchase, and (c) P might have stalled the completion of such sale and purchase as the price of the relevant lands had risen since 1999

[22] P claimed Philip Chan & Co acted for Lau Yue Kui in applying for grant of representation in respect of the Estate in the 1990s, in assisting Lau Yue Kui in the administration of the Estate, and in acting for D to apply for D’s Ancestor LA

[23] see paragraph 19 of the P 1^st Aff

[24] P claimed this was recorded in the Cheung Judgment (see paragraph 21 above)

[25] which P explained was why he described D as purported administrator under D’s Ancestor LA in respect of the Estate in the intituling in the present proceedings

[26] elder son and beneficiary named in the will of the 4^th son (ie the last surviving residuary beneficiary named in the Will)

[27] Vol 1 para 18/19/4 at pp 458-460

[28] see Byjoy Ltd v Thorogood Estates Ltd [1985] 2 HKC 746, 758

[29] see Hong Kong Civil Procedure 2017 Vol 1 para 18/19/5 at p 460

[30] Vol 1 para 18/19/7 at p 462

[31] To J in Falcon Private Bank Ltd v Borry Bernard Edouard Charles Limited & anor HCA1934/2011 (unreported, 9 July 2012) at para 212(d) stated that: “…… In an appropriate case, the court ought not to be slow to exercise the power to strike-out in order to dispose of proceedings which are hopeless and without foundation in law. In those cases, such power is required by the very essence of justice to be exercised, so as to prevent the defendant from being harassed and put to expense by frivolous vexatious or hopeless claims: Riches v DPP [1973] 1 WLR 1019 at 1027”

[32] see Hong Kong Civil Procedure 2017 Vol 1 para 18/19/9 at p 463

[33] Vol 1 para 18/19/9 at p 463

[34] HCA1934/2011, To J (unreported, 9 July 2012) para 212

[35] 31^st ed paras 13.12 – 13.15 at p 563

[36] see paragraph 25 of the P 1^st Aff where P mentioned he sought the grant “so as to finish the unfinished business of the administration of [the Ancestor’s] Estate ……” (see paragraph 56 above), and D referred to the need to complete the as yet incomplete administration of the Estate in paragraphs 31, 32 and 34 of D’s 4^th Aff (see also D’s Ancestor LA in paragraph 47(b) above)

[37] 31^st ed para 6.17 at p 248 (but Mr Wong cited 30^th ed para 6.188 at p 302 which concerns to whom grant of LA (in contra-distinction to grant of administration with will annexed) should be made)

[38] 31^st ed para 5.111 at p 209

[39] 20^th ed para 18-11 at p 297

[40] see Theobald on Wills 18^th ed para 20-028 at pp 457-458

[41] see The Annotated Ordinances of Hong Kong – Wills Ordinance (Cap 30) para [23C.06]

[42] 18^th ed para 26-062 at pp 656-657

[43] see Cheung Judgment at p 577

[44] the Wills Ordinance Cap 30 was enacted in 1970 “to consolidate and amend the law relating to wills”, and the previous law of wills can be traced back partly to the English Wills Act 1837 and subsequent English Acts supplementary to that Act and partly to Hong Kong legislation, ie the Wills (Formal Validity) Ordinance Cap 350 and Wills Ordinance as origninally numbered, so the law on wills in Hong Kong has some history – see The Annotated Ordinances of Hong Kong – Wills Ordinance (Cap 30) at p1

[45] see The Annotated Ordinances of Hong Kong – Wills Ordinance (Cap 30) para [19.04]

[46] see The Annotated Ordinances of Hong Kong – Wills Ordinance (Cap 30) para [19.02]

[47] the appellants were the 5 Fongs, so it appeared that contrary to Mr Yau’s submissions before this court, the 5 Fongs (including P for the 6^th fong) previously insisted on Chinese persons having testamentary capacity under Hong Kong law

[48] (1868) LR 3 HL 160, 169

[49] 18^th ed para 26-013 at p 640 (Mr Wong cited an earlier edition but it was unclear which edition it was)

[50] see Theobald on Wills 18^th ed para 20-051 at p 467

[51] see Theobald on Wills 18^th ed para 21-002 at p 474

[52] 18^th ed para 20-028 at p 457

[53] see paragraph 47(b) above in which D’s Ancestor LA referred to part of the Estate being as yet “unadministered” (see also paragraph 63 above in which D claimed certain lands had yet to be vested from the Estate to the 3 Sons as residuary beneficiaries under the Will)

[54] see paragraph 14 of Mr Yau’s written submissions

[55] in coming to this view there was no need for me to rely on the fatherly advice or family instructions in the Codicil that “此外關於家中大小事宜均由良驤良騶良駿三人商議取決不得妄加非議此囑” (as Mr Wong would have me do)

[56] (1925) 20 HKLR 1, 1-2

[57] 20^th ed para 18-09 at p 296

[58] Mr Wong submitted (but there was no affirmation evidence for such factual assertion) it was Lau Yue Kui’s son(s) in Canada who was/were executor(s) named in Lau Yue Kui’s will, but since such executor(s) (who would have priority over D) did not choose to apply for LA de bonis non in respect of the estate of the 4^th son for reasons best known to him/them, D successfully obtained D’s 4^th son LA

[59] 31^st ed at p 564

[60] see Tristram and Coote’s Probate Practice 31^st ed para 13.35 at p566 which states that “[when] deciding by whom application for a grant de bonis non should be made, regard must be had to the beneficial entitlement to the estate, for, by NCPR SI 1987/2024 r22, priority of right to a grant is given to persons taking a beneficial interest …..”, but NCPR SI 1987/2024 r22 (which is similar to but not the same as rule 21 of the NCPR) concerned order for priority for grant in case of intestacy which provisions are quite different from order for priority for grant where the deceased left a will under rule 19 of NCPR (or NCPR SI 1987/2024 r20)

[61] 31^st ed para 14.25 at p 587

[62] see Re Estate of Wong Yuen Leong [2012] 2 HKLRD 124

[63] 20^th ed para 81-03 at p 1413 (but Mr Wong cited 18^th ed para 78-04 at p 1066)

[64] [1965] AC 694

[65] [1965] 1 WLR 1249 (see also Wu Koon Tai & anor v Wu Yau Loi [1997] AC 179)

DR LAU YUE CHIU v. LAU KIN SHUN FREEMAN

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