NG YEUK CHU WINNIE v. NG SUNG KUI AND ANOTHER

HCMP 1259/2020

[2021] HKCFI 2116

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1259 OF 2020

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J U D G M E N T

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A.  INTRODUCTION

1.  Madam Ng Shum Miu Yee (“the Deceased”)  died intestate on 13 February 2019 at the age of 67, leaving her husband (who is the 2^nd defendant herein), and their son (who is the 1^st defendant herein)  and daughter (who is the plaintiff herein).

2.  As at the date of this hearing, no letters of administration for the estate of the Deceased (“the Estate”)  have been issued.

3.  The issue in these proceedings is who, amongst the plaintiff and the two defendants, should be appointed the administrator or administratrix of the Estate.  The parties agree that no professional administrator should be appointed given the fact that the Estate is not substantial and the administration thereof is not complex.  Further, no one suggests that I should appoint two (or even all)  of them as joint administrators.  There is no suggestion that section 25 of the Probate and Administration Ordinance[1] applies so as to require the appointment of a trust corporation or not less than two individuals. So, the question is, which one of the three shall I appoint?

4.  The plaintiff says she should be appointed, whereas for the defendants their preference is the 1^st defendant, but if I decline to appoint him, they say that the 2^nd defendant should be appointed rather than the plaintiff.

B.  FACTUAL BACKGROUND

5.  The following narrative is taken from the affirmations of the plaintiff and the defendants, and the exhibits thereto, and which I find as facts.

6.  The 2^nd defendant married the Deceased on 7 July 1977. 

7.  This was the only marriage for both of them and they had no children other than the 1^st defendant (born in 1979)  and the plaintiff (born in 1983).  The three parties to these proceedings are the only persons entitled to share the assets of the Estate.

8.  Both the 1^st defendant and the plaintiff went to Canada to study in the 1990’s. 

9.  After completing his studies, the 1^st defendant returned to Hong Kong in 2000 and lived with his parents at their place at Palatial Crest (“the Family Home”)  until he married in 2010. 

10.  The plaintiff, however, remained (and still lives permanently)  in Canada after graduation, and married there.  She came back to Hong Kong from time to time during and after the completion of her studies, but the frequency and purposes of her visits, and her interactions with her family whilst she was in Hong Kong, are matters of dispute between the parties. 

11.  The plaintiff is a chartered accountant and certified internal auditor.  The 1^st defendant describes himself as a director in the probate papers.  The 2^nd defendant is an engineer.

12.  During her lifetime, the Deceased maintained a safe deposit box (“the Deposit Box”)  jointly with the 2^nd defendant with the Bank of East Asia (“BEA”)  at its Caine Road branch.

13.  At the date of her death, apart from her assets in Hong Kong, the Deceased had at least the following assets in Mainland China, namely cash in two accounts with two different branches of the Ping An Bank (“PAB”)  in Shenzhen, and interests in three real properties in Guangzhou, Panyu and Shenzhen, all in Guangdong province.

14.  On 26 June 2019, i.e. after the death of the Deceased, the 1^st defendant, who was in possession of the relevant bank card and password, withdrew RMB60,000 from one of the PAB accounts.  He withdrew two further sums of RMB20,000 each from the same account on 16 July 2019.

15.  By letter dated 28 June 2019, BEA informed the 2^nd defendant that the Caine Road branch would be “rationalized”, and the licence for the Deposit Box would be terminated.  The 2^nd defendant was asked to remove all contents of the Deposit Box on or before 28 August 2019.  At that time, the BEA did not know that the Deceased had passed away.[2]

16.  The death of the Deceased was registered at the Births and Deaths Registry on 2 July 2019 (presumably because it took some time to ascertain the cause of her death given its suddenness)  and the death certificate was issued on 8 July 2019.

17.  On 11 July 2019, the plaintiff sent an email to the 2^nd defendant and asked if he had found any will made by the Deceased.  The 2^nd defendant replied saying, “Cannot find any written will, only oral will heard!”.  On the same date, the 2^nd defendant also asked the plaintiff by WhatsApp if she had any opinion on how to deal with the Estate.  There is no evidence of any direct reply.

18.  On 12 July 2019, pursuant to the notice of termination from BEA, the 2^nd defendant removed the contents of the Deposit Box and stored those matters in the safe at the Family Home.  The account for the Deposit Box was closed on the same date.

19.  On 24 July 2019, the 2^nd defendant sent to the plaintiff by WhatsApp a photograph of a handwritten note in Chinese, purportedly signed by four siblings of the Deceased on that date, confirming the wishes of the Deceased as to how her assets should be distributed after she passed away, namely that all her interests in real properties in Hong Kong and the Mainland were to go to the 1^st defendant, while the plaintiff would get all movable properties, including cash and jewelleries.  The 2^nd defendant asked the plaintiff if she agreed.  This is apparently the “oral” or “verbal” will which the 2^nd defendant referred to.  There is no evidence of any direct reply.

20.  On 26 July 2019, the 1^st defendant applied for the issue of letters of administration for the Estate to him.  The papers filed contained backsheets bearing the name of a firm of solicitors, so presumably the 1^st defendant had been receiving legal advice regarding the handling of the Estate.

21.  In support of his application, the 1^st defendant filed a schedule of the Deceased’s assets and liabilities as at the date of her death (“the Schedule”), which he verified.  In the Schedule, the only assets listed were:

(1)  Cash in five bank accounts in the Deceased’s sole name or jointly with another person, held at Chong Hing Bank and Hang Seng Bank in Hong Kong, totalling HK$4,065,183.65 and US$24,288.87.

(2)  Half-shares in two real properties in Hong Kong (being the Family Home and a car-parking space at the same building).

It is to be noted that under both “SAFE DEPOSIT BOX” and “HOUSEHOLD GOODS (Including picture, jewels, furniture and so on)” in the Schedule, the word “None” was inserted. 

22.  On 1 August 2019, after the 1^st defendant had applied for the issue of letters of administration to him, the 2^nd defendant sent an email to the plaintiff in the following terms:

“What is your opinion on your mother’s inheritance? You want her inheritance to be succeeded according to her verbal will or according to law or you will give up your right? If you donot [sic] claim your right your portion will go to the government!

Please respond quickly! Otherwise we can only give up your portion to the government!”.

23.  There is no evidence of any direct reply by the plaintiff.  Instead, on 3 August 2019, by an email the plaintiff asked the 2^nd defendant whether he or the 1^st defendant had opened and looked at the contents of the Deposit Box, to which the 2^nd defendant replied:

“All the contents already cleared, because the bank asked us to close the account!”.

24.  On 16 August 2019, the plaintiff filed a Caveat in the Probate Registry against any grant of letters of administration for the Estate.  By a letter of the same date, solicitors for the plaintiff sent a copy of the Caveat to solicitors for the 1^st defendant and asked for copies of the probate documents filed.  Solicitors for the 1^st defendant provided those documents under cover of letter dated 28 August 2019, as well as a copy of the Renunciation (see the following paragraph)  and enquiries made to the Law Society of Hong Kong as to whether any of its members held a will of inter alios the Deceased.

25.  On 17 August 2019, the 2^nd defendant, who as the widower had first priority to apply for a grant of letters of administration for the Estate, renounced his rights thereto (“the Renunciation”).

26.  By letter dated 8 October 2019 to solicitors for the plaintiff, solicitors for the 1^st defendant informed solicitors for the plaintiff that to the best knowledge and information of the defendants, other than the bank accounts listed in the Schedule, the Deceased had not maintained any bank accounts or safe deposit box.  They did not make any further enquiries with banks in Hong Kong.  Regarding the Deposit Box, the solicitors referred to the notice of termination given by BEA, and enclosed a list (and photographs)  of 19 items of jewellery which belonged to the Estate and removed by the 2^nd defendant from the Deposit Box when he cleared the same.  There was no testamentary document found.  The letter also has an appendix listing the assets of the Estate in the Mainland, being the two PAB accounts (with balances of about RMB119,766 and RMB380,000), and interests in three real properties (see [13] above).

27.  By letter dated 24 October 2019 to solicitors for the 1^st defendant, solicitors for the plaintiff insisted that further enquiries should be made on whether the Deceased maintained safe deposit boxes with other banks and whether she made a will.  The letter also referred to “the intermeddling” with the Deposit Box and noted the fact that the defendants knew about the Deposit Box and the items therein when the Schedule was lodged but the 1^st defendant did not mention them in the Schedule.  The letter also listed out eight additional items of jewellery said to be missing from the list provided in the letter dated 8 October 2019.

28.  By letter dated 14 November 2019 to solicitors for the plaintiff, solicitors for the 1^st defendant said that further enquiries were unnecessary, and denied the allegation of intermeddling as the Deposit Box was in the joint names of the Deceased and the 2^nd defendant.  For the eight items of jewellery, they had been kept at the Family Home and not in the Deposit Box and so they were not listed in the letter of 8 October 2019.

29.  On 2 December 2019, the Schedule was amended with the addition of 27 items of jewellery (i.e. the 19 on the list in the letter of 8 October 2019 and the additional eight referred to in the letter of 24 October 2019)  under “HOUSEHOLD GOODS (Including picture, jewels, furniture and so on)”. Under “SAFE DEPOSIT BOX”, the word “None” remained.

30.  By letter dated 30 January 2020 from solicitors for the plaintiff to solicitors for the 1^st defendant, the allegation of intermeddling with the Deposit Box was repeated.  The request for further enquiries with banks to see if the Deceased left a will was also repeated. Further correspondence ensued, including a letter dated 20 March 2020 from solicitors for the plaintiff to solicitors to the 1^st defendant (and copied to the 2^nd defendant c/o the latter)  which referred to the fact that the Deposit Box and one further bank account of the Deceased[3] were not disclosed in the Schedule.

31.  By a Chinese letter dated 17 March 2020 to solicitors for the plaintiff (and copied to the 1^st defendant), the 2^nd defendant queried why, being a joint holder of the licence for the Deposit Box, he was not allowed to access it or to remove things from it. He also confirmed that, after the death of the Deceased, he had accessed the Deposit Box four times: once to see if she had left a will, once to take away the title documents to the Mainland properties for inspection by lawyers, once to return those documents, and the last time to clear the contents so as to return the Deposit Box to BEA.  There is no suggestion that on any of those occasions, the procedure prescribed by sections 60C to 60E of the PAO for the inspection and removal of contents of a safe deposit box used to be held by a deceased person had been followed.

32.  On 19 May 2020, the Schedule was again amended with the addition of a bank account with Chong Hing Bank with a balance of HK$703.60 (see [30] above).  Under “SAFE DEPOSIT BOX”, the word “None” still remains.

33.  On 26 May 2020, the plaintiff sent a text message to the 2^nd defendant asking about the jewelleries and handbags which the Deceased had said she would leave to her, enclosing a photograph of the list of the 27 items in the revised Schedule.  The 2^nd defendant asked the plaintiff to come back and choose for herself, and also sent her photographs of the items.

34.  On 27 May 2020, the plaintiff sent a text message to the 2^nd defendant asking for the bank statements of the PAB accounts.  The 2^nd defendant replied that there were no such statements, and that the balances stated in those accounts were obtained by the 1^st defendant when he went to the Mainland but they could not visit again because of the travelling restrictions.  The 2^nd defendant also said that according to PRC law he was entitled to two-thirds of the assets of Estate but he was willing to give up his entitlement and give her half thereof.

35.  By email dated 11 July 2020, the 1^st defendant, in response to an email request of the same date from the plaintiff, sent her a copy of the bank book of one of the PAB accounts.  The plaintiff then asked the 1^st defendant for bank statements or books for the other account at PAB.  The 1^st defendant sent a copy of the bank card and a bank receipt for this account, there being no bank book.  At the further request of the plaintiff for the balance of the latter account, the 1^st defendant replied on 14 July 2020 that he had to make enquiries at the bank in the Mainland in person, which he could not because of travelling restrictions due to the Covid-19 pandemic.

C.  THE APPLICATION BY THE PLAINTIFF

36.  By Originating Summons dated 20 August 2020, the plaintiff applies for an order appointing her to be the sole administratrix of the Estate.

37.  The application is made under section 36 of the PAO, which provides as follows:

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

38.  It is the plaintiff’s case that both defendants should be passed over[4] in relation to the entitlement to a grant of letters of administration for the Estate.  She relies on three grounds:

(1)  The 1^st and/or the 2^nd defendants had intermeddled with the assets of the Estate, which makes them unfit and unsuitable to act as an administrator of the Estate.

(2)  The 1^st and/or the 2^nd defendants has/have failed and/or refused to give a full account of the assets of the Estate, which cast real doubt as to whether they will duly, properly and/or competently administer the Estate for all beneficiaries even-handedly.

(3)  The 2^nd defendant has already renounced his rights to a grant and given his decision to renounce (even if retracted)  and advanced age (he is now 69)  it is not convenient to appoint him as the administrator of the Estate.

39.  The defendants deny that they are unsuitable to be appointed as administrator, and submit that the plaintiff is not suitable to be appointed.  They submit that:

(1)  The wish of the majority of the beneficiaries (i.e. the defendants)  is to have the Estate administered by the 1^st defendant.

(2)  The 1^st defendant had lived with his parents in Hong Kong since 2000 (until he married in 2010)  when he returned from his studies in Canada and was entrusted by the Deceased with her financial affairs.  He is familiar with affairs of the Estate while the plaintiff, who has been living in Canada since 1999 (for studies and then work), is not.

(3)  Being in Canada, it would be inconvenient for the plaintiff to be appointed, especially in the light of the travel restrictions and quarantine requirements resulting from the Covid-19 pandemic.  This is more so as whoever is to be appointed to administer the assets of the Estate in Hong Kong is likely to be the one appointed to do so in the Mainland as well, and the problems caused by the travelling restrictions would be compounded.

40.  The 2^nd defendant supports the 1^st defendant to be appointed as the administrator rather than the plaintiff.  However, if for any reason I find the 1^st defendant to be not suitable to be appointed, then the 2^nd defendant seeks leave from me to retract the Renunciation so that he can be appointed (with his priority).

41.  The plaintiff submits that she is fit and proper to be appointed as the administratrix of the Estate, for the following reasons:

(1)  She had a good relationship with the Deceased during her lifetime.  She also denies that she is hostile towards her father and brother.

(2)  She is an accountant and internal auditor by profession and possesses the knowledge and skill to handle and administer the assets of the Estate impartially.

(3)  She has no criminal or disciplinary record anywhere.

(4)  She is willing, able and ready to come back to, and stay in, Hong Kong to deal with probate matters from time to time, including a full search of assets of the Estate.

42.  Thus, the issues before me are:

(1)  Whether the 1^st defendant is suitable to be appointed?

(2)  If the answer to (1)  is yes, is he more suitable than the plaintiff?

(3)  If the answer to (1)  is no, whether the 2^nd defendant is suitable to be appointed (and related to that is whether I should allow him to retract the Renunciation and therefore let him reclaim his priority)?

43.  I shall summarise the respective case of the parties under each of the three grounds relied upon by the plaintiff.

C1.  Intermeddling

44.  The intermeddling relied on by the plaintiff relates to two matters, which occurred after the death of the Deceased and before anyone has been granted letters of administration:

(1)  The 1^st defendant’s admitted withdrawals from one of the PAB accounts.  The plaintiff also complains that she has been kept in the dark as to the status and/or whereabouts of the funds in the other PAB account.  

(2)  The access by the 2^nd defendant to the Deposit Box and the removal of items belonging to the Deceased therefrom.  It is also alleged that the 1^st defendant, knowing the intermeddling by the 2^nd defendant, has failed to stop him from doing so, thereby also casting doubts as to whether the 1^st defendant can faithfully and honestly discharge the “onerous duties” of an administrator.

45.  In response, the defendants’ case is as follows.

(1)  Regarding the withdrawals from the PAB account:

(a)  The 1^st defendant says that in about March 2019, the 2^nd defendant told him that the procedure in dealing with the Deceased’s assets in the Mainland would be complicated and full of uncertainty, and that it could take a long time to get the money out. It would therefore be better to withdraw money from the PAB accounts and to bring the money back to Hong Kong.

(b)  After his aunt, who lived in Shenzhen, confirmed this to be the case, the 1^st defendant went to Shenzhen on several occasions and withdrew over RMB300,000 in total from the PAB accounts of the Deceased (i.e. more than the RMB100,000 referred to by the plaintiff (see [14] above)).  The money is kept in a safe at the Family Home, to be distributed. 

(c)  Although being informed of the existence of the PAB accounts in October 2019, the plaintiff enquired about the same only in July 2020, whereupon the 1^st defendant sent her copies of the bank book, bank card and deposit certificate.

(2)  Regarding the Deposit Box:

(a)  The 2^nd defendant cleared the contents thereof because of the termination by BEA. 

(b)  The plaintiff was kept fully informed about the Deposit Box and the contents thereof by email dated 2 August 2019, by letter dated 8 October 2019, and by letter dated 17 March 2020.

(c)  Both defendants honestly believed (without the benefit of legal advice)  that as a joint holder, the 2^nd defendant was entitled to access the Deposit Box after the death of the Deceased. The items of jewellery there were also “personal chattels” which should go to the 2^nd defendant absolutely under section 4(3)  of the Intestates’ Estates Ordinance[5]. They refer also to clause 20 of the Rules Governing the Use of Safe Deposit Box issued by BEA:

“Where the Customer comprises more than one person, their liabilities shall be joint and several and their rights shall be joint. Upon the death of any such person, subject to compliance with the provisions of the Estate Duty Ordinance (Cap.111), all rights of the Customer shall pass to the survivor but either the survivor or any person intending to apply for probate or letters of administration of the estate of the deceased may have access to the Box for the purpose of taking an inventory of the contents thereof. The survivor may surrender the Box before the grant of probate or the issue of letters of administration …”.

(d)  All items in the Deposit Box that belonged to the Estate are accounted for.

(e)  The 2^nd defendant denies that he deliberately withheld news of the death of the Deceased from BEA, or that he refused to co-operate with the plaintiff.

46.  In response, the plaintiff points to the 1^st defendant’s admission that he made withdrawals from the PAB accounts, apparently without taking any legal advice, and such conduct renders him unfit to act as an administrator of the Estate.

47.  As for the Deposit Box, the plaintiff points to the failure of the defendants to follow the requirements of the PAO regarding inspection and removals of safe deposit boxes held formerly by a deceased person, and says that such ignorance of the law is not an excuse for their intermeddling.  This is more so as the 1^st defendant was legally represented at the material times (and thus his asserted honest belief that the 2^nd defendant was entitled to access the Deposit Box as a joint holder without complying with the PAO is unbelievable).  The survivorship clause is, she says, irrelevant and in any event only allows them to access the Deposit Box to take an inventory, and the latest version of the rules also requires compliance with the law for access. 

C2.  Failure to account

48.  Under this head, the plaintiff’s case is as follows:

(1)  The 1^st defendant has failed to take steps to ascertain the assets originally stored in the Deposit Box and to include them in the Schedule.

(2)  She had identified various defects and/or missing items (including eight items of jewellery)  in the original Schedule filed by the 1^st defendant, with the result that it had to be amended to include the missing items identified by her.  Yet, the latest Schedule still does not list the assets of the Deceased in the Deposit Box.

(3)  Despite her requests, the 1^st defendant has failed to make enquiries with the banks in Hong Kong to ascertain the true financial position of the Estate.

(4)  The 2^nd defendant has failed to provide full information of the assets that had been stored in the Deposit Box and it was only after she confronted him on 26 May 2020 with a list of jewelleries gathered from the documents filed by the 1^st defendant with the Probate Registry (i.e. the 27 items of jewellery listed)  that he agreed to take photographs of the jewelleries in his possession for her record.  He chooses to provide information to the plaintiff in a piecemeal basis.

(5)  The 2^nd defendant was also uncooperative when she asked him about the status of the Estate in the Mainland.

49.  In response, the defendants’ case is as follows:

(1)  The items of jewellery said to be missing from the Schedule had been kept at home rather than in the Deposit Box.  Being personal chattels, the 2^nd defendant is entitled to them absolutely under section 4(3)  of the IEO.

(2)  One of the Chong Hing Bank accounts was left out ([30] above)  due to the 1^st defendant’s oversight.

(3)  The defendants deny that they have failed or refused to give a full account of the assets of the Deceased, and the 1^st defendant has endeavoured to report to the plaintiff accurately. All the items of jewelleries owned by the Deceased during her lifetime are accounted for.  How the defendants handled the assets of the Estate was never kept secret from the plaintiff.  The plaintiff asked the 2^nd defendant about the jewelleries for the first time on 26 May 2020 to which he responded immediately (with the photographs which she asked for).

(4)  All assets of the Deceased in the Deposit Box are accounted for in a letter to the plaintiff and in the Schedule as amended.

(5)  The 1^st defendant does not consider it necessary to make enquiries with banks as he was at all times aware of the status and existence of the bank accounts of the Deceased given their close relationship, save for the one account that was overlooked ([30] above).

(6)  As for the assets of the Estate in the Mainland, the 2^nd defendant referred to WhatsApp messages between them and says that he was unable to get monthly bank statements which she asked for, and he even offered her a bigger share of the assets in the Mainland than she was entitled to as a matter of law.

50.  In reply, the plaintiff says that the 1^st defendant has failed to explain why he did not include the assets in the Deposit Box, or the eight items of jewellery, in the original Schedule, or why he affirmed, even for the revised Schedule dated 25 May 2020, that the Deceased, as at the date of death, had no safe deposit box.  Further, whether the items of jewellery are “personal chattels” does not affect the fact that they have to be disclosed on the Schedule.  She also queries if all the assets of the Deceased in the Deposit Box had been accounted for, or that the 1^st defendant should rely on his personal knowledge of the Deceased’s financial position without making proper enquiries (pointing to the omitted bank account to support her point), or the correctness of the 2^nd defendant’s assertion as to PRC inheritance law and in any event he was asking her to relinquish her entitlement to the real properties in Hong Kong in exchange.

51.  The plaintiff also disputes the defendants’ assertion that they had kept her fully informed.  She was not aware of the withdrawals from the PAB accounts other than the RMB100,000 before reading the 1^st defendant’s affirmation herein, nor details of the other bank account at PAB. 

C3.  Renunciation by the 2^nd defendant

52.  It is the 2^nd defendant’s case, by referring to various correspondence between him and the plaintiff after the Deceased passed away, that she did not express any view on the administration of the Estate or any desire to be issued with letters of administration, before she filed the Caveat.  On the understanding that the plaintiff was not interested in administering the Estate, the 2^nd defendant made the Renunciation because (i)  he was busy with his own business; (ii)  the 1^st defendant had an extremely close relationship with the Deceased; and (iii)  he was confident that the 1^st defendant would be capable of handling court procedures and administering the Estate promptly, competently and fairly.  Now that the plaintiff has indicated her wish to be issued with letters of administration, there is a material change of circumstances from those under which he made the Renunciation.

53.  The 2^nd defendant says despite his age he is still healthy and of sound mind, and, being a registered professional engineer, possesses the adequate education level to administer the Estate in a prompt and efficient manner. He also knows about the assets and finances of the Deceased well.

54.  The 1^st defendant also points out that the 2^nd defendant made the Renunciation in his favour for convenience, but the latter is still healthy and of sound mind.

55.  The plaintiff in response says that it was always her view that any discussion on the administration and distribution of the Estate was premature before efforts to locate a will (if any)  had finished and the extent of the Estate ascertained.  In particular, she expected that the inspection of the Deposit Box would be done in accordance with sections 60C and 60D of the PAO after the death certificate had been issued, and in the presence of the Home Affairs Department, to ascertain if there was a will and for an inventory to be made.  That is why she did not discuss the administration or distribution of the Estate but instead was talking about the cause of death and issuing of the death certificate, and inspection of the Deposit Box, up to August 2019, and, after the death certificate was issued, she did ask the 2^nd defendant about whether a will had been found.

56.  The plaintiff also submits that the 2^nd defendant should not be allowed to withdraw the Renunciation, made under seal and ought to have been decided on after careful consideration, casually.  On top of unsatisfactory handling of the Estate by the 2^nd defendant as stated already, she also alleges that he had had extra-marital affairs, would be extremely busy with his business once the pandemic is over, and has unfounded prejudice against her personally.

57.  Section 31 of the PAO provides:

“A renunciation of probate or administration may be retracted at any time on the order of the court:

Provided that leave may be given to an executor to retract a renunciation of probate after a grant has been made to some other person entitled in a lower degree only if the court is satisfied that such retraction is for the benefit of the estate or persons interested therein”.

The proviso is not applicable.

D.  DISCUSSION

58.  The parties agree that principles regarding removal of an executor or administrator are applicable to a case of passing over.  However, I agree with Mr Cheung, counsel for the plaintiff, that the nature and degree of the unsatisfactory features relied upon as against a potential appointee in a pass over case can be less serious than as against an incumbent personal representative whose removal is being sought.  As he puts it, the “tolerance” level in a removal case is higher.  On the other hand, one must bear in mind that in a pass over case, the person concerned has not been appointed yet.  Subject to the foregoing, since the plaintiff’s case against the defendants is based on what she says to be improper conduct (namely intermeddling and failure to account), the following principles are particularly relevant:

(1)  The overriding consideration is the interest and welfare of the beneficiaries, and the question is what is necessary or required for the due and proper administration of the estate[6].

(2)  It is not every mistake or neglect of duty, or inaccuracy or misconduct, which will induce a court to remove a personal representative and, a fortiori, to pass over a potential one.  The acts omission must be:

“such as to endanger the trust property or to shew a want of honesty, or a want of proper capacity to execute the duties, or a want of reasonable fidelity”.[7]

(3)  On the other hand, it is not necessary to establish specific wrongdoing, misconduct or fault, but obviously they are relevant considerations if established.[8]

(4)  The duty to render a full and proper account when called upon to do so is a fundamental and important duty, and a failure to do may, in appropriate circumstances, be a good reason to justify removal (or, a fortiori, passing over).[9]

(5)  Hostility between the personal representative (or the potential one)  and the beneficiaries as such is not a ground to remove (or, a fortiori, to pass over), unless the breakdown of relations between them is such as to lead to the administration coming to a standstill, or makes it difficult or impossible for the administration to be carried out or completed.[10]

(6)  Ultimately, it is a fact-sensitive question to be determined on the actual circumstances of the case as to whether a particular person should be passed over.[11]

59.  I shall deal with the allegation of intermeddling first.

60.  It appears to me that, on the evidence, and despite the explanations given by the defendants, they did intermeddle with the Estate and such intermeddling was improper[12] as a matter of Hong Kong law and, although there is no proper evidence of PRC law, I am prepared to assume for the purpose of this application only (and I must stress that this is not a finding for any other purposes whatsoever)  that the withdrawals of funds from the PAB accounts were also improper.  

61.  However, in my judgment, this does not justify a passing over of any of the defendants.  Improper those acts might have been (and nothing I say should be considered to be condoning or excusing such acts in any way), what such acts show to me were ill-advised attempts by the defendants to secure the assets of the Estate or to facilitate the future administration thereof.  This is particularly so in light of the fact that the licence for the Deposit Box was being terminated, thus prompting the removal of the items therein, although the removal could have been done properly but was not.  There is no evidence to suggest, or to support any findings, that those acts were done because the defendants or either of them had the intention of concealing or misappropriating, or otherwise dealing with, the relevant assets, or that there was any improper or dishonest motive vis-à-vis the Estate or the beneficiaries as a whole or the plaintiff personally.  According to the evidence of the defendants, all the relevant assets remain in their hands and are available for distribution, and given their sworn evidence there seems to me no basis to say that those assets would not be available.  Thus, the intermeddling did not involve dealing with assets other than collecting and keeping them for proper distribution and there is no question (such as in other dealing cases)  of whether the eventual appointee needs to decide whether to adopt the intermeddling acts.

62.  As for the alleged failure to account, I accept that this is an important and fundamental duty, even for a person who has not been appointed an administrator but seeking to be so and filing the relevant papers with the schedule of assets.  However, from the narrative above, I do not see any failure by either defendant to the extent or in such a manner to justify a passing over.  While they might not have been as proactive to inform the plaintiff of the assets of the Estate as they could have, each time they were properly responsive to a query from the plaintiff.  For example, the defendants could have concealed from the plaintiff the existence of some or all of the 19 items of jewellery removed from the Deposit Box.  Nor do I consider the deficiencies of the Schedule indicative of any improper motive or intention to conceal assets (despite the continuing incorrect statement that the Deceased did not have any deposit box).  While the plaintiff refuses to accept that all the contents of the Deposit Box which belonged to the Estate have now been disclosed on the Schedule, the 2^nd defendant confirms that to be so and there is no reason for me not to accept, and I do accept that, given that, as I said, he could have concealed the existence of some or all of the 19 items of jewellery.  

63.  As for the alleged failure to make more enquiries of the existence of any will or assets of the Deceased, it is always a question of degree and judgment as to how far one should go, or what more one should do, on the facts of each case.  Here, it is not in dispute that the assets and affairs of the Deceased were not complicated.  She was married to and lived with the 2^nd defendant, and it is clear that she did entrust the 1^st defendant with her financial affairs (he, for example, did have access to the PAB accounts).  In the circumstances, I do not find anything improper or being in dereliction of duty for the defendants to have considered that they had sufficient knowledge of the financial affairs and assets of the Deceased, and whatever that had been done was sufficient to locate the assets and to find out if there was a will.

64.  For these reasons, I do not think that the two grounds relied upon by the plaintiff, whether individually or together, constitute sufficient basis for me to pass over the 1^st defendant.   What the Court is looking for is someone whose honesty and integrity is not impugned by proper evidence, and who, with proper advice if and when necessary, can be trusted to perform the tasks competently.  This is encapsulated in the quote at [58(2)] above.  The acts or omissions relied on by the plaintiff do not, in my judgment, show that the assets of the Estate are endangered, or a want of honesty, or a want of reasonable fidelity, or that the Estate would not be administered even-handedly to the detriment of the plaintiff.  With full and proper advice, I do not believe that there is want of proper capacity of the 1^st defendant to execute the duties.  While I note the fact that at least the 1^st defendant had at all material times been legally represented, and the 2^nd defendant also from time to time, it is the defendants’ case that they did not take legal advice when dealing with the Deposit Box or the PAB accounts, which I have no reason to disbelieve. 

65.  Regarding the points made by the plaintiff ([41] above), while they may suggest that she is otherwise a suitable person to be appointed as the administratrix of the Estate, in my judgment they do not make her more so than the 1^st defendant:

(1)  Her alleged good relationship with the Deceased is disputed by the defendants.  It is neither possible nor necessary for me to resolve this issue.  As all parties agree, the Estate is not complicated, and its administration is relatively simple and straightforward, to be done in accordance with the provisions of the IEO.  It is not as if the administration and distribution of the assets require some knowledge of what the Deceased had in mind (and the defendants do not appear to be insisting on following the alleged “oral” will).  I do not believe that the closeness of the relationship with the Deceased or otherwise is relevant.  For the same reason I do not deal with the defendants’ allegation that the Deceased was very close to the 1^st defendant during her lifetime (for example, by entrusting him with the passwords to her bank accounts).

(2)  While her professional background is of some relevance, it is not particularly so given the nature of the Estate and the task of administering the same, and where local professional help is readily available in any event.

(3)  The defendants have also confirmed that they have no criminal records in Hong Kong or elsewhere.

(4)  With advanced communications, I do not consider the fact that the plaintiff being resident in Canada to be a particularly weighty factor against her, even in these times of the Covid-19 pandemic and the resultant travelling restrictions.  But the fact remains that the defendants are presently in Hong Kong and in this respect there is a slight advantage in the 1^st defendant’s favour.

66.  I think it is quite obvious that, from the tone and manner of the communications between the plaintiff and the defendants since the death of the Deceased, the fact that they have to resort to litigation between immediate family members, which is always a sad state of affairs, and the allegations made by both “camps” against the other, that the two “camps” are not in the best of relationships.  This of course works both ways, and no matter who I appoint the other “camp” would not be happy, and is a neutral factor in terms of who to prefer.

67.  However, given the relatively simple nature of the Estate and the administration thereof that will ensue, the disharmony is unlikely to make the administration difficult or impossible to be carried out or completed whoever I appoint, given that directions from the Court are always an option if needed.

68.  In the light of the aforesaid, and given the fact that the majority of the beneficiaries are in favour of the 1^st defendant to be appointed[13], in the interest and welfare of the beneficiaries, and for the due and proper administration of the Estate, I exercise my discretion to appoint the 1^st defendant to be the administrator of the Estate.  In doing so, I also take into account the facts that the 1^st defendant is in Hong Kong and the plaintiff is in Canada, and that on the evidence the 1^st defendant had been entrusted by the Deceased during her lifetime (and is thus more familiar with the financial affairs of the Deceased), which are in favour of the 1^st defendant, although they are relatively minor in weight, given the nature of the Estate.  I do not see any basis to say that if appointed the 1^st defendant or the majority will abuse his/their position to the detriment of the plaintiff. 

69.  The question of the retraction of the Renunciation, which is conditional on me not appointing the 1^st defendant as the administrator of the Estate, does not therefore arise.  But I shall say briefly that for the same reasons above I do not see any basis to say that the 2^nd defendant would be an unsuitable person to be appointed, and none of the matters stated in [56] above in my judgment, affects his suitability given the relatively simple nature of the Estate and the administration thereof.  As for his age, which is a factor the plaintiff says is against him, the assertion on affirmation by both defendants is that he is of sound health, with no evidence to the contrary.  On the other hand, the plaintiff says that another reason against the 2^nd defendant is that once the Covid-19 pandemic is over, the 2^nd defendant’s business will consume and take up a considerable portion of his time as he would have to travel a lot.  The suggestion is therefore that the 2^nd defendant is and will be actively managing his business and this is contradictory to the suggestion that he is too old to be able to handle the administration of the Estate.  I would not therefore consider the 2^nd defendant’s age to be a factor against him nor, given the relatively simple Estate, the fact that the 2^nd defendant may otherwise be busy. 

70.  Given his explanation of why he renounced in the first place and the change of circumstances, which I accept, had it been necessary I would have exercised my discretion under section 31 of the PAO to allow the Renunciation to be retracted.  

E.  DISPOSITION

71.  I make an order that, subject to the filing of all requisite papers leading to a grant of representation to the Estate, and compliance with the requirements of the Registrar, the 1^st defendant be appointed as the sole administrator of the Estate and letters of administration of all and similar real and personal estate and effects of the Deceased be granted to the 1^st defendant, pursuant to section 36 of the PAO.

72.  I also make an order nisi that the plaintiff is to pay the costs of the defendants, to be taxed if not agreed.

73.  I thank counsel for their assistance.