WU WING CHING AND ANOTHER v. DING YUFANG

HCMP 2471/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2471 OF 2012

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REASONS FOR JUDGMENT

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1. This is the hearing of an Originating Summons issued pursuant to Order 85 of the Rules of the High court.  The defendant is the Administratrix of the estate of the late Mr Wu Po Chow (“the Deceased”).  She was the second wife of the Deceased who passed away on 23 August 2009.  The 1^st and 2^nd plaintiffs were the two surviving children of the Deceased.  Letters of Administration was granted to the defendant on 8 December 2010.

2. By the Originating Summons, the two plaintiffs sought, inter alia, the following relief from the defendant:

(1)  An order that the defendant do exhibit on oath a just and true account of her administration of the Deceased’s estate and file the same in the court within 14 days from the date of the service of the order on her.

(2)  An order that the defendant do distribute the Deceased’s estate to the plaintiffs as the court may direct.

(3)  An order that the defendant do vacate and sell the landed property, namely “ALL THAT 40 equal undivided 130,260^th parts or shares of and in CHAI WAN INLAND LOT NO. 154 and of and in the messuages erections and buildings thereon now known as ‘Harmony Garden (富欣花園)’, 9 Siu Sai Wan Road, Hong Kong (“the Estate”) TOGETHER with the sole and exclusive right to hold use occupy and enjoy ALL THAT Flat E on the 26^th Floor of BLOCK 1 of the Estate” (“the Property”), in vacant possession and distribute the proceeds of the sale as part of the estate of the Deceased.

(4)  An order that the defendant do pay to the 1^st plaintiff HK$94,191.10 or any sum which the court thinks reasonable out of the Deceased’s estate as funeral expenses.

3. It is the plaintiffs’ case that despite repeated demands and requests, the defendant has not carried out her duties as administratrix to properly administer the estate of the Deceased and to make distributions.  The plaintiffs seek to compel the defendant to observe and carry out her duties in accordance with the relevant provisions in the Probate and Administration Ordinance, Cap 10 (“the PAO”) and Intestates’ Estates Ordinance, Cap 73 (“the IEO”).  There is however no application to remove the defendant. 

Order for account

4. Pursuant to the Schedule of Assets and Liabilities annexed to the Letters of Administration, the estate consisted of the following assets:

(1) Cash at bank—

Bank	Account No	Balance as at date of death
Bank of China (HK) Limited	012-810-1014xxxx (savings account)	HK$58,013.04
	012-810-0001xxxx (savings account)	HK$172.90

(2) Stock, shares, warrants and unit trusts—

Held under Securities Account with banks/broker:

1.    Bank of China (HK) Ltd, A/C No 012-893-63-45xxx-x

Holding	Companies/Trusts
10,000 shares	Oriental Press (Stock Code: 00018)
30,000 shares	CKlife Science (Stock Code: 00775)
20,000 shares	Sunevision (Stock Code: 08008)

2.    CAF Securities Co Ltd – Client Code: M52Wxxx

Holding	Companies/Trusts
100,000 shares	Get Nice (Stock Code: 00064)
60,000 shares	Jinjiang Hotels (Stock Code: 02006)
2,000 shares	Town Health (Stock Code: 03886)
30,000 shares	China Bluechem (Stock Code: 03983)

(3) Motor vehicles and ships—

Motor Cycle No EV18xx (bought in 1992)

(4) Land and buildings—

The Property (solely owned by the Deceased)

(5)  Insurance policies and MPF accounts—

1.  HSBC Institutional Trust Services (Asia) Ltd

   Member A/C No 16422xxxx

2.  HSBC Institutional Trust Services (Asia) Ltd

   Scheme: Fidelity Retirement Master Trust

       Member A/C No 43031xxxx

3.  Manulife Provident Funds Trust Company Ltd

   Scheme: Manu-lifestyle (MPF) Scheme

     Member A/C No 11478xxx-2 (MBS)

4.  Manulife Provident Funds Trust Company Ltd

   Scheme: Manu-lifestyle (MPF) Scheme

     Manulife Customer No 31410xxx

     Member A/C No 9000019-11xxxx

5.  Hang Seng Mandatory Provident Fund – Supertrust

   Scheme ID: 3999xxxx

     MPF membership number: 39587xxxx

6.  American International Assurance Company (Bermuda) Ltd

   Policy No B60320xxxx

(6) OTHER ASSETS—

    Share Option Scheme—Option for 25,000 shares at subscription price of HK$0.938 per share offered by K Wah International Holdings Limited.

5. The said Schedule also set out the liabilities of the estate owed to banks, telephone company and the Government totalling HK$10,917.39.  This Schedule of Assets and Liabilities was, of course, verified by the defendant. It is not in dispute that the 1^st plaintiff obtained a copy of the Letters of Administration (albeit in photo-format) on 14 July 2011. The plaintiffs had thus been provided with an inventory of the Deceased’s assets.

6. It is the plaintiffs’ case that the 1^st plaintiff had incurred HK$78,301.10 of testamentary expenses on behalf of the estate as of 28 March 2010.  She had provided a summary to the defendant through her solicitors’ letter dated 26 August 2010.  In another letter dated 13 January 2011 from the 1^st plaintiff’s solicitors to the defendant, the 1^st plaintiff complained that the defendant had refused to answer her inquiries concerning the administration of the estate and its progress.  The 1^st plaintiff also complained that the defendant had failed to settle the funeral expenses despite the former’s repeated requests. The defendant did not reply to this letter.  Follow up calls were made without success.

7. At a meeting on 14 July 2011 between the 1^st plaintiff and the defendant, the latter stated that money in the Deceased’s bank accounts had been withdrawn and put into an account in her name with the Bank of East Asia Ltd for the purpose of administration (“BEA A/C”).  The 1^st plaintiff took a picture of the inside cover and first page of the passbook showing the account number and five deposits made between 20 January 2011 and 14 April 2011 totalling HK$302,306.17.

8. By another solicitors’ letter dated 31 August 2011, the 1^st plaintiff again requested for settlement of funeral expenses which had by them accumulated to over HK$80,000.  The defendant was also requested to provide, within 14 days, details regarding the whereabouts of the money obtained from the Deceased’s bank accounts, MPF accounts, and the realization of stocks/shares held by the Deceased.  The defendant did not provide any reply.

9. At a meeting on 18 July 2012 between the plaintiffs and the defendant, the defendant stated that some of the shares held by the Deceased through an account at the Bank of China (HK) Ltd had been sold and the proceeds were paid into the BEA A/C.  The defendant showed the 1^st plaintiff the transaction sale orders and she took pictures of them.  The 1^st plaintiff also took a photograph of the updated bank passbook of the BEA A/C showing five further deposits made between 26 April 2011 and 8 August 2011.  The total deposits reached HK$556,523.70.  There was then one withdrawal of HK$100,000 on 8 September 2011.  The balance as of 8 September 2011 became HK$456,523.70.  These were the limited information provided and there was no comprehensive rendering of accounts as earlier demanded by the plaintiffs.

10. This Originating Summons was issued on 2 November 2012 claiming, inter alia, the relief of rendering a just and true account.  The defendant must have known that the plaintiffs were not satisfied with the hitherto limited and rather piecemeal rendering of information.  In fact, the 1^st plaintiff particularized her dissatisfaction in her 1^st affirmation filed on 2 November 2012.

11. In the 1^st affirmation filed by the defendant on 27 December 2012, she did not however exhibit any statement of account.  She admitted that she had cancelled the Deceased’s bank accounts and transferred all money to the newly opened BEA A/C.  She also sold some of the stocks/shares and deposited the proceeds into the BEA A/C.  The defendant claimed that the plaintiffs had been duly informed and were allowed to take photograph of the bank passbook. There was no further elaboration as to what had happened to the other assets set out in the Schedule of Assets and Liabilities annexed to the Letters of Administration.

12. Nothing further was done by the defendant in relation to rendering a wholesome and truthful account.  Then a Notice of Appointment to Hear Originating Summons was filed by the plaintiffs on 13 March 2014.  At a direction hearing on 26 March 2014, DHCJ Eugene Fung SC ordered, inter alia, that the substantive hearing be conducted on the basis of affirmation evidence only.

13. On 18 April 2014, in the process of mediation, the defendant provided the plaintiffs with a handwritten note purporting to provide some further information concerning some of the assets of the estate.  Again, it was at most a piecemeal provision of information. Furthermore, when compared to the later versions of rendering by the defendant, this document included various inconsistent items or figures.  Hence, it could not be considered as a “clean clear and accurate account” which the defendant is indisputably obliged to keep and render upon request.

14. On 30 May 2014, the defendant applied for leave to file her 2^nd affirmation. Leave was granted on 10 June 2014 with consequential leave to file reply affirmations by the plaintiffs. 

15. On 12 June 2014, the defendant filed her 2^nd affirmation. In this affirmation, she exhibited a letter dated 19 May 2014 from her solicitors to the plaintiffs’ solicitors.  Attached to that letter was a “Statement of Accounts for Distribution (as of 19 May 2014)”.  The defendant then said that she had duly accounted to the plaintiffs and it was no longer necessary for the court to make an order.  This was the first attempt on the part of the defendant to produce a comprehensive account.

16. In the Skeleton Submissions filed by the plaintiffs on 27 June 2014, counsel for the plaintiffs raised the following complaints on the deficiency of the said statement of account:

(1)  It did not comply with the practice and proper format for an account as endorsed in by the court in Clare Hollingworth v Thomas Edward Juson (unreported, HCA 249/2006, 16 October 2006).  Neither did it exhibit underlying supporting documents.

(2)  The Schedule of Assets and Liabilities annexed to the Letters of Administration mentioned six items under “Insurance policies and MPF accounts”.  Yet, only three items have been accounted for in Item 1 of the statement of account.

(3)  Item 2 (which dealt with the Deceased’s various bank accounts maintained with Bank of China) provided only a total sum of HK$166,829.02 without breakdowns.  It was also not clear how much money were left in each bank account.

(4)  Item 3 (which dealt with the Deceased’s securities account with CAF Securities Co Ltd) merely set out a figure of HK$328,225.89.  It is unclear what that figure represents: whether it is the current value of the shares still being held in the account or whether it represents the total proceeds of sale of all the stocks/shares mentioned therein.

(5)  As to Item 4, the Deceased’s jewelleries (consisting of a gold chain with jade pendant and a gold ring) should not be counted as assets of the estate as they were inter vivos gifts made by the Deceased to the 2^nd plaintiff.

(6)  Furthermore, Item 4 did not explain why and when the Share Option of K Wah International Holdings Ltd became “lapsed”.

(7)  There was no account of the funds in the BEA A/C at all, in particular, since 8 September 2011.  There was also no explanation as to what had happened to the HK$100,000.00 withdrawn from the BEA A/C on 8 September 2011.

These complaints had largely been set out in the 4^th affirmation of the 1^st plaintiff filed on 23 June 2014 in response to the stance taken by the defendant in her 2^nd affirmation.

17. In the Skeleton Submissions filed by the defendant on 30 June 2014, counsel for the defendant referred me to a letter dated 27 June 2014 from the defendant’s solicitors to the plaintiffs’ solicitors.  Annexed to this letter was another “Statement of Account for Distribution (as at 26 June 2014)”.  I can see that this updated version demonstrated a serious attempt to address the plaintiffs’ aforesaid concerns.  More importantly, relevant supporting documents have been disclosed and attached to this set of statement of account.

18. At the hearing, counsel for the plaintiffs agreed that his concerns were reduced to just the followings:

(1)   There are no supporting documents produced for two items under “insurance policy and MPF” and the alleged lapsing of the Share Option. It only stated information orally obtained from the banks and from K Wah International Holdings Ltd.

(2)  In relation to the monthly statement dated 29 April 2011 of the securities account maintained at, there was an unexplained opening debit balance of HK$7,178.80.

(3)  No proper supporting document to show that the withdrawal of HK$100,000 from the BEA A/C is still sitting in another BEA current account disclosed by the defendant by way of a monthly statement dated 20 September 2011.

(4)  A remaining dispute on the Deceased’s jewelleries.

19. Counsel for the defendant replied that the defendant can provide undertakings to this court to:

(1)  write to the banks and K Wah International Holdings Ltd to seek their written confirmations;

(2)  write to ABCI Securities Co Ltd (formerly known as CAF Securities Co Ltd ) to obtain a copy of the closing statement (when the account in the name of the Deceased coded “M52WPC1” was closed on 14 February 2011);

(3)  write to ABCI Securities Co Ltd to obtain copies of the monthly statements for the months of February and March 2011 in respect of the securities account maintained by the defendant coded “A01DYF1”; and

(4)  provide a copy of the most updated monthly statement in respect of the BEA current account maintained by the defendant.

20. The issue of the jewelleries would be determined at this hearing. As to the remaining accounting concerns, I am of the view that it is unnecessary make a formal order of account at this stage.  When the above undertakings are complied with and subject to receiving the various written confirmations/documents, the defendant would have eventually rendered a “clean clear and accurate account”.  I will simply give liberty to apply should there be any hiccups.

21. Counsel for the defendant submitted that all along the defendant had attempted to keep the plaintiffs fully informed and has made genuine attempts to answer plaintiffs’ queries.  The process is inherently continuous and requires constant updating.  The fact that no statement of accounts was given to the plaintiffs earlier was because the defendant had not prepared it yet.  As administratrix, the defendant had tried her best to reduce unnecessary costs. It was understandable that she did not seek professional help in compiling and presenting a statement of accounts at an earlier stage.  I do not agree. The general legal principle governing the duty on the part of a personal representative to furnish account has been summarized in §969 of the 3^rd edition of Halsbury’s Laws of England (1956) which had been cited with approval in Leung Chi Man v Mok Sau Lim, HCMP 1599/2003 at §107. The learned author said:

“General duty to keep accounts. It is the duty of executors and administrators to keep clean clear and accurate accounts, and to be always ready to render such accounts when called upon to do so. It is no excuse that they are inexperienced in keeping accounts, for in such case it would be their duty to employ a competent account to keep them. Where they are required by the beneficiaries to furnish accounts, they may demand to have the costs of doing so paid or guaranteed before complying with the request. A legatee is not entitled to a copy of the accounts at the expense of the estate, but he is entitled to inspect the accounts kept by the representative.

A personal representative is liable to be ordered by the court to account either generally in proceedings for general administration of the estate or under the jurisdiction of the court to order specific accounts.”

22. It is clear from the above chronology that it was through pursuing these proceedings that the defendant eventually came up, very close to the hearing date, with a wholesome statement of account backed by supporting documents.  I cannot accept the submission that the defendant had acted reasonably.  This will be a relevant factor on the incidence of costs which I shall hereinafter deal with.

Deceased’s Jewelleries

23. On the outstanding issue of the alleged inter vivos gift of certain jewelleries of the Deceased to the 2^nd plaintiff, the 2^nd plaintiff’s evidence was as follows:

“8. A few days before my birthday in 2007, the Deceased, as usual, had dinner with me after work in a Chinese restaurant at Wanchai to celebrate. During dinner, the Deceased asked me whether he should change his present wife, mainly Madam Ding. Sensing that the Deceased was very unhappy with his present marriage with Madam Ding, I was a little taken back. So I told the Deceased that I just wanted him to be happy. Then the Deceased told me that he had not much and all his valuable assets including items of jewelleries were hidden inside the bathtub in the bathroom of the Property, and that if the Deceased passed away, I should look for and keep them for my use…”

It is then the plaintiffs’ case that subsequent to the death of the Deceased, they located and removed the hidden jewelleries from the Properties.  After the defendant claimed that some of the jewelleries belonged to her, the plaintiffs returned all except a gold chain with jade pendant and a gold ring which they were sure that they belonged to the Deceased.

24. Counsel for the defendant referred to Cheung Cho Kam Sindy and another v Cheung Yuet Ying Rose, HCA 885/2005 (unreported, 13 July 2007) in which DHCJ Muttrie commented (after referring to a number of English authorities) at §17:

“If a gift is claim, the onus is on the done to prove it. Corroboration is not required as a matter of law, but where there is a claim that a gift was made by a person who is now dead, the court must approach the claim with suspicion…”

He also relied on the principle that in order to constitute the gift of a chattel there must be a voluntary transfer from the donor to the donee with the full intention that the chattel would not return to the donor.  In the case of gifts inter vivos, some form of delivery of possession is necessary.  The donor must intend there and then to give the chattel to the donee.  Words of instruction would not be enough.  Nor would words indicating an intention to give in future, whether by will or otherwise.  I was referred to the case of Young Tin Kin Kenneth v Lau Lan Fong Nancy, HCA 1545/2004 (unreported, 9 September 2006) in which DHCJ Muttrie dealt with a vexed question of whether there was in law “delivery of possession” when there was no actual handing over of anything.  After examining a number of English authorities, his Lordship said:

“61. It seems to me that in cases where the courts have found delivery of possession where there was no actual handing over of anything, emphasis has been placed, albeit tacitly, on the element of intention, rather than that of custody or control. What has been found is some action by the donor, going further than mere words, which indicates clearly that he gives up his intention to possess, in favour of the donee’s intention; so long as there is some such action, it is immaterial that custody or control apparently remains with the donor, or is joint, or has already passed from the donor to the done. What is required is an action which demonstrates intention. The donor’s intention is the most important element.

….

63.  It seems to me, therefore, that what really has to be proved here is that Master Yang in 1987 intended to give the Collection to Madam Lau and did something to manifest that intention.”

25. In the present case, I conclude that on the plaintiffs’ evidence, the Deceased had not made a gift inter vivos to the 2^nd plaintiff for two reasons.  First, the Deceased said that the 2^nd plaintiff could look for and keep the jewelleries for her use after his death. There was thus no intention to make an immediate gift.  It was conditional upon his death.  Second, there was no action in which one can point to as the Deceased manifesting his intention to make a gift there and then other than mere words of intention.  In my judgment, the gold chain with jade pendant and the gold ring form part of the estate of the Deceased.  I will give directions on how to handle with these chattels in my order.

Order for sale of the Property

26. The Property is a flat bought under the Home Ownership Scheme and registered in the sole name of the Deceased.  The Deceased remained as registered owner until 10 April 2014 when the defendant became the registered owner (in her capacity as administratrix).  It is not in dispute that the Property is held by the defendant on a statutory trust for sale pursuant to section 62 of PAO which provides that:

“(1) On the death of a person intestate as to any property, such property shall be held by his personal representatives-

(a) as to the immovable property upon trust, subject to section 54, to sell the same; and

…

with power to postpone such sale and conversion for such a period as the personal representatives, without being liable to account, may think proper …”

27. The defendant agrees that the Property should be sold.  She is not exercising any right of postponement.  In her 2^nd affirmation, she claimed to have taken various actions towards that end since obtaining the Letters of Administration on 21 October 2010.  She alleged that it was difficult to sell the Property because of: (i) the registration of this Originating Summons against the Property; and (ii) the “unmarketable” nature of the Property in the prevailing market conditions.  These were of course disputed by the plaintiffs.  Counsel for the defendant submitted that it is not meaningful to dwell on past events.  He submitted that the Property has already been offered for sale in the market and with the plaintiffs’ cooperation, the process could be expedited.  It would not be necessary to make an order for sale. 

28. Counsel for the plaintiffs questioned the genuineness of the defendant’s assertions.  He referred me to the 1^st affirmation of the defendant in which she initially asserted a right to stay in the Property (獨立居住權).  She also stated that the plaintiffs could not ask her to move out or to pay rent for her occupation.  He submitted that more than 3½ years had lapsed since the obtainment of Letters of Administration and it is plainly incredible that the Property could not be sold within such a long period. He also pointed to the very substantial delay in registering the Letters of Administration (only on 10 April 2014) and applying for Housing Authority’s “permission for sale” (only in March 2014). 

29. Even on her own evidence, the defendant knew as early as June 2011 that she needed to apply for a “permission for sale” (出售証) from the Housing Authority in order to market the Property for sale. This should have been the logical first step.  The defendant only approached the Housing Authority in or about March 2014.  She was able to obtain a Certificate of Availability for Sale fairly swiftly on 22 April 2014.  I agree with counsel for the plaintiffs that there is certainly a considerable degree of tardiness on the part of the defendant.  She had every motive to be lax as she has been occupying the Property.  Such motive was readily apparent from the stance she originally took in her 1^st affirmation.  Neither would I accept the evidence and argument that the registration of the lis pendens was the real culprit of delay in selling the Property.  If there were genuine difficulties in attracting potential purchasers, the lack of “permission for sale” from the Housing Authority would more likely to have been a source of deterrence.

30. On the other hand, it is my view that both parties should take a pragmatic approach and should not dwell on unnecessary arguments.  The most important thing is to move forward in the administration of this estate.  It is thus crucial to effect a sale of the Property as soon as practicable.  In my view, it is pointless to argue whether or not the lis pendens should or should not be vacated.  If I make an order for sale and give directions for sale under this Originating Summons, my order can be registered with the Land Registry and potential purchaser would not view these proceedings as a blot on title.  Both counsel agreed with my suggestion.  Similarly, even though I am of the view that the defendant was previously not sufficiently vigilant, she is now under supervision of this court.  I can give detail directions governing the process of the intended sale abiding both parties.  I will also give general liberty to apply if any hiccup arises.  The defendant is the lawful administratrix and is now the registered owner of the Property.  Eventually, it is the defendant who has to delivery vacant possession of the Property upon sale.  It will be convenient to let her have the conduct of the sale albeit under supervision of this court through the directions.  This is also the default position stipulated in Order 85, rule 6.  I will therefore make an order of sale of the Property.  I will hear counsel further on an agreed list of directions that I should make to safeguard the interest of all parties.

Funeral expenses

31. The 1^st plaintiff’s case is that as the eldest son of the Deceased, he was responsible for arranging the funeral.  Up to 28 March 2010, he had incurred a total sum of HK$78,301.10 as funeral expenses.  By a solicitors’ letter dated 26 August 2010, he had provided a detailed breakdown to the defendant with accompanying receipts.  Further demands were made in subsequent solicitors’ letters of 4 September 2010 and 31 August 2011.  The most updated figure reached HK$94,191.10 which he now claims.  The updated breakdown was exhibited in the 1^st affirmation of the 1^st plaintiff without the supporting receipts for the additional sum of HK$15,890.00 incurred since 28 March 2010.  They have now been exhibited in the 4^th affirmation of the 1^st plaintiff.

32. Counsel for the defendant made the following queries in his Skeleton Submissions:

(1)  the first item on the breakdown was HK$5,000 stated to be “a cash loan to the defendant”;

(2)  there are items for which the receipts provided were illegible; and

(3)  dinner and food for mourners and funeral meals should not be included as funeral expenses.

Having said that, counsel for the defendant stated that the defendant would act upon the court’s determination as to which items should be allowed as funeral expenses.

33. At the hearing, counsel for the plaintiffs fairly conceded that the HK$5,000 should be deducted from the 1^st plaintiff’s claim. Counsel for the defendant also fairly withdrew his complaint about illegible receipts.  The remaining dispute is on the “food and meals to mourners”.

34. These expenses for food and meals added up to slightly over HK$5,400.  Counsel for the defendant referred me to Wong Sau Wah and others v Leung Kam Cheuk and another [1982] HKC 333, at [19] to [20] and Wan Dan Nei and another v Dragages Et Travaux Publics and Penta‑Ocean Construction Co Ltd [2000] 4 HKC 116 at 136.  These are personal injury cases in which the court had to consider whether, in assessing the amount of damages that a tortfeasor should compensate the victim, expenses for funeral meals should be allowed. Obviously, different considerations apply when a third party is required to pay for such meals as an item of damages.  In the present situation, the sole question is whether the expenses for such meals, which are commonly arranged by the bereaved family for mourners, are properly incidental to the funeral rites such that it should be regarded as having been incurred on behalf of the estate of the Deceased.  In my view, these expenses should be borne by the estate. There is no reason why an individual family member, who cared to observe such common cultural etiquette at a ceremony honouring a deceased, should somehow be asked to bear the costs personally.  I would therefore order the defendant to pay a sum of HK$ 89,191.10 to the 1^st plaintiff.

Other relief

35. I would further note that in the course of the hearing, the parties agreed that: (i) the sum of HK$89,101.10 should be paid out of the BEA A/C to the 1^st plaintiff; (ii) a sum of HK$200,000 should be paid out to the defendant as interim distribution; and (iii) that I should make detail directions controlling the payment‑out of funds from the BEA A/C.  In the light of the orders and directions that I would give, counsel for the plaintiff agreed that it is not necessary to make an order of general administration or distribution of the estate.

Costs

36. I should first deal with the costs of preparing and rendering a just and proper account for the administration of the estate. Both counsel agreed that a reasonable amount should be allowed to be charged by the defendant and payable out of the estate.  Counsel for the defendant informed me that the defendant has been assisted by her solicitors and so far, a sum of HK$25,000 has been incurred.  There would also be some further costs to be incurred in carrying out the undertakings and to prepare a final distribution account after the completed sale of the Property.  Counsel for the plaintiffs reminded me that the defendant had attempted to draw up three sets of accounts and only the last set resembles what the law requires.  He argued that costs wasted on sub‑standard efforts should be discounted.  Both counsel fairly accepted that this court can only adopt a ballpark approach and deferred to my personal assessment.  In my view, this is a relatively simple estate.  If proper steps had been undertaken from the beginning, the costs of preparing a statement of account should be a relatively insubstantial with the assistance of professionals.  Bearing in mind the further steps and updating that would be required to end up with a final distribution account, I would allow the defendant to charge HK$20,000 which would be paid out of the estate.

37. In respect of the costs of the Originating Summons, both counsel agree that in relation to the plaintiffs’ costs, they should be paid out of the estate.  The only disagreement is on whether the defendant’s costs should also be allowed to be paid out of the estate.  Both counsel agreed that this issue depends on whether I find that the defendant has been acting reasonably in defending the Originating Summons.

38. I have already expressed my dissatisfactions over the defendant’s piecemeal and unwholesome preparation and rendering of the accounts.  The plaintiffs were effectively compelled to institute legal proceedings.  Even after proceedings were instituted, the defendant did not meet with her obligation to render “clean clear and accurate” account until the eve of the hearing.  As for the sale of the Property, I have also expressed my view that there was considerable laxity on the part of the defendant.  I do not accept the excuse put forward by her for the delay in securing the sale of the Property. The plaintiffs were justified in seeking the court’s intervention.  Even after proceedings were instituted, the defendant (in her 1^st affirmation) unreasonably asserted an independent right to occupy and stay in the Property. Such stance was formally changed only in June 2014 when she filed her 2^nd affirmation. Still then, she maintained that no order for sale would be necessary.  I have been shown certain without prejudice (save as to costs) correspondences.  As early as 23 April 2014, solicitors for the plaintiffs had provided the defendant with draft proposed directions for an order of sale.  There were then negotiations on the proposed directions.  In the end, no settlement could be reached because the defendant refused to commit to a definite time table for the sale of the Property.  In my view, the time‑table proposed (ie six months from the date of reaching settlement) was not unreasonable in the light of the hitherto delays (more than 3½ years after grant of administration) and the plaintiffs’ justifiable scepticism over the genuineness of the defendant’s intention to efficiently conduct the sale.  Having failed to reach settlement, the defendant maintained her position at the hearing that it is not necessary for the court to make an order for sale.  In the end, I rejected her submissions and order a sale of the Property.

39. All in all, I conclude that the defendant has not acted reasonably in opposing this Originating Summons.  I decline to allow her costs to be paid out of the estate.

Conclusion

40. After hearing counsel further, I had made various orders and directions at the conclusion of the hearing on 3 July 2014.  These orders and directions had been made with the contribution and agreement of Counsel for the plaintiffs and counsel for the defendant for which I am grateful.