WAH YING CHEONG CO LTD v. CHAN KWOK PING AND OTHERS

HCMP 3059/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 3059 OF 1997

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D E C I S I O N

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1. I have pinpointed some fundamental issues in these proceedings in my Decision of 27 August 2003. Parties come to back to argue in respect of the same at the hearing of 13 January 2004. From the skeleton submissions filed by the parties, there seems to be a misapprehension on the part of the Plaintiff that the purpose of the hearing is to enable them to re-open arguments as to who are the beneficiaries. Ms Chan, counsel for the Plaintiff, now contends that the beneficiaries are the descendants rather than the estates. This was not the position she had previously adopted, see Paragraphs 4 to 5 of my previous Decision.

2. It was therefore necessary for me at the outset of the hearing to define the scope of this hearing. To do that, one must not forget that the present application by the Plaintiff for distribution of the sale proceeds as per their summons of 13 August 1999 arose from the order of Rogers J (as he then was) of 19 November 1997. The two most relevant paragraphs were set out in Paragraph 1 of my previous Decision.

3. Under Paragraph 2 of that order, the court had already declared that the beneficiaries are, inter alias, the three estates. There is no ambiguity in the terms of the order in that regard. Hence, unless and until that declaration has been set aside or amended, this is binding on the parties. Up to the end of the hearing, there was no application for amendment of the order nor was there any appeal against the same. In those circumstances, the Court of First Instance simply has no jurisdiction to re-open this matter.

4. At the last hearing, the only ambiguity is in respect of the expression "persons who are entitled under the respective estates" in Paragraph 3(1) of the order of 19 November 1997. As set out in my previous Decision, the focus of the Plaintiff's argument at the last hearing was on the same.

5. The relevant principles on construction of a court order are not disputed. If the wordings of the relevant part of the order are clear, one should not refer to other material to see whether the order means what it said. If there is an ambiguity in the wordings, it is permissible to refer to material placed before the court and what transpired at the relevant hearing in order to ascertain the true meaning of the order. However, under no circumstances would it be permissible to refer to new material which was not before the court at the time when the order was made. That would tantamount to re-opening the evidence on issues which had been decided previously.

6. Adopting such an approach, as mentioned above, I do not think there is any ambiguity in Paragraph 2 of the order of 19 November 1997. The estate of Chan Leung Sing means what it said, viz. the estate of the deceased person called Chan Leung Sing. I fail to see how it can be suggested that it means something else as suggested by the Plaintiff, viz. a group of male descendants which had been for convenient sake designated as "Chan Leung Sing" in the accounts of the Plaintiff. There is simply no room for entertaining the submission of Mr Fung encapsulated in Paragraph 12 of my previous Decision. The same applies to the estate of the other two named individuals, viz. Chan Yee Kin and Chan Hok Hin.

7. Even if I were wrong about the lack of ambiguity in Paragraph 2 of the order, the material placed before the court when the order was made showed clearly that the references to the estates mean the estates of these deceased persons instead of bearing the meaning now suggested by the Plaintiff. To start with, if the Plaintiff were correct, it is difficult to see why the mode of naming the 5th and 6th Defendants was not adopted in respect of the 2nd to 4th Defendants. Further, after the issue of the Originating Summons herein, the Plaintiff made an application for representation order under Order 15 Rule 6A in respect of the 2nd to 4th Defendants. The rule is only applicable when the estate of a deceased person is a party to the proceedings. The application was supported by the 2nd Affirmation of Yu Shuk Mei. It was said in Paragraph 4 of that affirmation,

"The 2nd, 3rd and 4th Defendants are the forefathers and ancestors of the Chan" clan. The 2nd Defendant is the father of the 4th Defendant. The 3rd Defendant is one of the two sons of the 4th Defendant."

Paragraph 5 of the affirmation referred to the fact that these gentlemen died a long time ago and probate search in respect of their estates had been conducted but to no avail. There were then references to the descendants of these deceased persons and in Paragraph 6 it was said that the board of the Plaintiff could only do their best in tracing the personal representatives of the estates of the three defendants.

There is no suggestion whatsoever in this affirmation that the reference to the estates of these deceased persons was meant to be a collective reference to the male descendants of these persons instead of the estates.

8. In the first Affirmation of Yu Shuk Mei, the deponent also dealt with the position of these three defendants in Paragraphs 44 to 48. In particular, at Paragraph 48, it was said,

"Since the monies in the accounts of these names have remained dormant for so long, the Company wishes to seek this Honourable Court's direction for the Company to release these monies to the personal representatives of the estate of the deceased Chan Leung Sing, Chan Hok Hin (or Chan Kwong Hau) and Chan Yee Kin (or Chan Kwong Yue)." (my emphasis)

9. It was on these materials that representation order was made by Rogers J on 25 September 1997. The representatives were appointed to represent the estates of the 3rd Defendant and the 2nd and 4th Defendants respectively. There was nothing to indicate that these representatives were aware that they did not represent the estates as such but were representing three groups of unidentified and unnamed male descendants in the Chan clan who had been designated respectively by those three names.

10. Counsel have taken me to the transcripts of the hearings before Rogers J. Ms Chan emphasized that Mr Mok, who was counsel for the Plaintiff at a hearing on 25 September 1997, told the court that the three estates were joined for a very limited purpose to consent or to state any reason for objecting to the sale and that they were not into the question of the beneficial interest. That was mentioned in the context of argument as to who would be the appropriate representative for the estate of Chan Yee Kin. The Plaintiff was proposing to appoint Mr Chan Yam-po whilst the other side advocated Mr Francis Chan. Taking into account of what was said immediately before and after, it is clear to me that counsel was addressing the court about the limited power or authority of the person to be appointed to represent the estate of Chan Yee Kin. It has nothing to do with the question whether the estates were the beneficial owners of the property in question.

11. It is indeed difficult to see why would the estates be joined as parties if they were not regarded as the beneficial owners of the properties. It is also difficult to see why declaration in term of Paragraph 2 of the order of 19 November 1997 was sought from the court if the Plaintiff's position was that beneficial ownership should not be dealt with at that stage, as it is now contended by Ms Chan.

12. However, the transcript of 25 September 1997 sheds light on the meaning of the expression "persons who are entitled under the respective estates" in Paragraph 3 of the order of 19 November 1997. There was an application by the Plaintiff to amend the originating summons on 25 September 1997. As it was, the Plaintiff sought an order under the originating summons that the Plaintiff be at liberty to distribute the sale proceeds of the Property to the persons appointed by the court herein to represent the respective estates in the specified shares or proportions.

13. Those advising the Plaintiff then realized that the person appointed under Order 15 Rule 6A should not be given the power to distribute to the beneficiaries of the respective estate. Hence, it was proposed to amend the relevant paragraphs in the originating summons. The original draft appears to be amending the wordings in Paragraph 4(1) to the following,

"the Company may be at liberty to distribute the sale proceeds of the Property ... to the persons who are beneficially entitled under the respective estates ..."

14. At the hearing on 25 September 1997, counsel for the Plaintiff reflected further on the wordings and informed the court that he wished to delete the word "beneficially". He told that court that the Plaintiff would like to be able to distribute the proceeds to person who are entitled to represent the estates, be they administrators or executors. Reading together with Paragraph 48 of the First Affirmation of Ms Yu mentioned above, this showed that at least up to that stage the Plaintiff envisaged that eventually a personal representative would be appointed for each of the three estates and the Plaintiff could distribute the proceeds to those representatives.

15. The transcript of the hearing on 19 November 1997 did not show any change of position on the part of the Plaintiff.

16. Ms Chan also referred to the Decision of Rogers J in the winding-up proceedings on 7 July 1997. She said that provided the background to the originating summons proceedings. I cannot see how that Decision advance the Plaintiff's case for present purposes.

17. I accept the submission of Mr Chung, counsel for the 2nd and 4th Defendants that the amendment of the originating summons was to ensure that the persons appointed under Order 15 Rule 6A did not have the power to distribute the proceeds amongst the beneficiaries of the respective estate. This is evidenced by the submission of Mr Mok in his application for leave to amend. That must be correct in view of what I said in Paragraph 26 of my previous Decision concerning the limited effect of an order made pursuant to Order 15 Rule 6A.

18. Ms Chan attempted to advance an argument that the proper beneficiaries are the male descendants instead of the estates and these individuals whose estates were named as the 2nd to 4th Defendants should be regarded as setting up Tongs under Chinese custom law. I do not think this contention is open to her in the present context. The parties are bound by the order of Rogers J of 19 November 1997. There is simply nothing to suggest that when Rogers J made that order, His Lordship regarded the 2nd to 4th Defendants as three Chinese Tongs instead of the estates of the three deceased individuals.

19. I therefore reject the submission of the Plaintiff as to the effect of Paragraph 3 (1) of the order of 19 November 1997. I hold that as a matter of construction, that paragraph does not confer authority on the Plaintiff to take up the duty as personal representative of the three estates. Hence, for reasons already given in my previous decision, the Plaintiff should only be concerned about distribution to the properly appointed personal representatives of the respective estates. It is the duty of such personal representatives to identify the beneficiaries to each of the estate and make distribution in accordance with the general law. If such personal representative shall encounter any problems in these regards, he could make an application under Order 85. But this should not be the concern of the Plaintiff and cannot be within the scope of the present proceedings.

20. The way to move forward is therefore to take steps to appoint personal representative for the estate of each of the three deceased persons. Either the Plaintiff or anyone interested in the estates can take the initiative in that regard. Until then, the Plaintiff would be holding the proceeds on trust for the estates.

21. The summons of 13 August 1999 proceeded on the basis that the Plaintiff should act as the personal representative in relation to these estates. It is therefore misconceived and should be dismissed. I order accordingly.

22. Since I wish to hear parties about the further conduct of these proceedings in any event, I would also reserve the question of costs for argument at the direction hearing. This matter should be restored for further directions at a half an hour appointment in the morning. Parties are directed to submit draft directions at least three days before the restored hearing. I intend to release this Decision and my previous Decision for publication. If parties have any views in that regard, they should write to this court within 5 days.