CHAN, THERESA SAU FONG v. CHIU IUT NGO, THE ADMINISTRATRIX OF THE ESTATE OF TONG CHUN BONG, DECEASED

HCMP 2020/2017

[2020] HKCFI 341

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2020 OF 2017

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J U D G M E N T

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A.  Introduction

1.  At the hearing before me, the plaintiff claimed the following relief: –

(1)  The substantive relief set out in the Originating Summons filed on 26 September 2017 (the “OS”), namely:

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

(b)  An order that the defendant do distribute the Deceased’s Estate to the plaintiff as the court may direct; and

(c)  Costs be to the plaintiff.

(2)  Pursuant to paragraph 2 of the Order made by DHCJ Sherrington on 22 November 2018, costs of and occasioned by the plaintiff’s summons filed on 25 October 2018 (the “Specific Discovery Summons”), including the costs of the hearing on 22 November 2018.

B.  Background

2.  I set out below the salient undisputed facts borne out by the evidence, taken from the defendant’s Skeleton Submissions: –

(1)  The late Mr Tong Chun Bong (the “Deceased”) died on 13 September 2015, intestate, aged 95, after admission to hospital just one day earlier.

(2)  The Deceased was survived by his wife the defendant (now aged 97), 3 sons and 2 daughters (the plaintiff being the youngest) - all in their 60s.

(3)  The defendant received very little education, reaching primary school level only.

(4)  The defendant with the help of one son (Tong Ying Yuen) applied for Letters of Administration, without legal representation, and was granted it on 11 December 2015.

(5)  The size of the Estate is relatively modest: it includes bank balances of about $0.77 million only and some shares in the Deceased’s name (the certificates of which were stored inside a safe deposit box).

(6)  Up to the stage prior to the commencement of these proceedings, the defendant had been dealing with the Estate without the help of lawyers. She did not want to incur unnecessary expenses.

(7)  On 30 September 2016, the plaintiff (hitherto living for decades in Canada) together with her lawyers suddenly turned up at the defendant’s home in Mei Foo to talk about the Estate.  The defendant was shocked.

(8)  By letter of 23 January 2017 in English, the plaintiff’s solicitors threatened to remove the defendant from her office as the Administratrix of the Estate.

(9)  On 26 September 2017, the plaintiff commenced the present set of proceedings against the defendant.

C.  Rendering of Accounts and Provision of Documents by the defendant

3.  Various estate accounts have been rendered by the defendant, updated in stages: –

(1)  21 November 2017;

(2)  12 October 2018 (the “October Accounts”); and

(3)  18 December 2018 (the “December Accounts”).

4.  By letter dated 22 August 2018 from the defendant’s solicitors, it was put on record that on 16 May 2018, the defendant’s representative had asked the plaintiff’s to specify what documents the plaintiff wanted the defendant to produce; and that for several months, nothing was heard from the plaintiff’s representatives until 14 August 2018.

5.  Supporting documents have since been provided to the plaintiff’s solicitors: –

(1)  Bank of China bank statements;

(2)  DBS bank statements;

(3)  DBS passbook;

(4)  DBS joint account statement;

(5)  Notices of dividends;

(6)  Bank of China letter/notice regarding dividend payments;

(7)  Receipts for expenses incurred regarding shares and application for Letters of Administration;

(8)  Further evidence of dividend payments; and

(9)  Receipts for funeral and related expenses.

6.  It is the defendant’s case that nothing more need to be provided.

D.  Issues between the parties

7.  According to the amended Letters of Administration, the Estate, inter alia, comprised the following items: –

Bank Accounts

Bank	Account Number	Amount (HK$)
Bank of China	57315359 (012-566-0-001246-3)	558,683.41
DBS Bank	26-330-59020	188,713.36
	26-100-10870	23,540.57

Safe Deposit Box

Bank of China (Mei Foo Sun Chuen Branch)

012-566-83-20288-9

Shares

(1)  In the name of the Deceased: –

	Stock Code	Shares
Bank of China	3988	190,000
Bank of East Asia Ltd	0023	7,920
Hong Kong and China Gas Company Ltd	0003	261,107

(2)  Held in the securities account with bank/broker (alleged by the defendant to be held by the Deceased in trust for her) (the “Disputed Shares”): –

	Stock Code	Shares
New World Development Co Ltd	0017	27,000
Bank of Construction Ltd	0939	80,000
ICBC (Asia) Ltd	1398	92,000
China Life Insurance	2628	5,000
China National Building Material Co Ltd	3323	20,000
Bank of Communications Ltd	3328	12,000
Bank of China	3988	21,000

8.  As regard the Disputed Shares, the defendant’s case is that she acquired those shares at various stages using money she had received from the sons and daughters and saved up throughout the years, that she had also made some profits from securities trading which profits had been put back into buying more shares; and all sons and daughters at all material times knew and understood that the shares in the bank account belonged to her, albeit registered in the Deceased’s name.

9.  On the other hand, the plaintiff’s position is that the defendant’s above version regarding the Disputed Shares should be rejected by the court because: –

(1)  The defendant has failed to give any detailed explanation as to when, how, why and under what circumstances the Disputed Shares were held on trust by the Deceased for her.  The phrase: “acquired those shares at various stages” is unclear and ambiguous.

(2)  The defendant has failed to prove since when, why, from which children’s money and under what circumstances she made her securities trading.

(3)  If any of the defendant’s children knew and understood that the Disputed Shares were held on trust by the Deceased for her, they should have given affirmation evidence in support of the defendant’s case.

10.  The plaintiff went on to submit that in the light of the above analysis, given that the defendant has failed to prove that the Disputed Shares were held on trust by the Deceased for her, the opening balances of the October Accounts and the December Accounts were essentially flawed.

11.  The above formed the primary complaint of the plaintiff.

12.  By way of subsidiary complaints, the plaintiff also complained that the defendant has failed to (i) ascertain the funeral expenses relating to the niche in Macau; and (ii) confirm her “fee of administration of the Estate” (as alluded to in paragraphs 5 and 6 of the 2^nd Affirmation of the defendant filed on 20 December 2018).

E.  Discussion

13.  In the Schedule of Assets and Liabilities attached to the Letters of Administration as amended, the defendant stated that the Disputed Shares in the Deceased’s Bank of China Securities Account were held on trust by the Deceased for the defendant.

14.  The defendant explained in her affirmation that she had acquired those shares at various stages using money she had received from her sons and daughters and saved up throughout the years.  The Deceased had kept the defendant’s shares in that account whereas he had kept his own shares certificates in his safe deposit box instead.  The defendant asserted that all her sons and daughters at all material times knew or understood that the shares in the account had belonged to the defendant, albeit registered in the Deceased’s name.  The defendant alleges that the plaintiff in effect has been holding her at ransom, threatening her she would dispute the defendant’s ownership in those shares unless the defendant would accede to the plaintiff’s demands for reimbursing her travel and other expenses completely.

15.  In this regard, the penultimate paragraph of the letter from the plaintiff’s solicitors dated 22 December 2017 stated this: –

“We are instructed that should your client refused to reimburse our client the said expenses and legal fees mentioned above, our client will dispute your client’s entitlement to the [Disputed Shares] and all the queries of the deceased’s estate.”

16.  Further, in the letter from the plaintiff’s solicitors to the defendant’s solicitors dated 30 August 2018, the following demands were made: –

“We are instructed to inform you that our client would only consider to accept your assertions [that the Disputed Shares are held on trust for the defendant] on the condition that your client shall out of her own pocket reimburse our client the travelling expenses in the sum of HK$46,701.90 (which includes the legal costs in the sum of HK$26,132.90 our client has paid to her previous lawyers) and the legal costs incurred by our client in the captioned legal action up to this date and payable to our firm is around HK$50,000.00.”

17.  As submitted by the defendant, what appears to be the stumbling block to a speedy resolution of the present dispute is the plaintiff’s insistence on recovering all her travelling and legal expenses. She was claiming, through the said correspondence, recovery of the sum of HK$46,701.90 for such expenses, plus HK$50,000.00 additional fees said to be payable to her current lawyers.

18.  In support of the defendant’s case, I note that the Deceased’s holding in his safe deposit box overlapped with certain shares in the securities account: ie both depositories included shares in the Bank of China, 190,000 shares and 21,000 shares respectively.  I agree that this is evidence in support of the defendant’s assertion of the Disputed Shares being held by the Deceased on trust for the defendant in the securities account.  These shares were intentionally held separately from the Deceased’s own shares kept in the safe deposit box.

19.  Further, as submitted by the defendant, the plaintiff was given the chance to rebut the defendant’s evidence regarding the Disputed Shares but she chose not to rebut it.  In the plaintiff’s Affidavit in reply at paragraph 22, where she was replying to paragraph 10 of the defendant’s Affirmation, the plaintiff merely denied the defendant’s allegation that “all my sons and daughters at all material times knew and understood that the shares in the bank account had belonged to [the defendant], albeit registered in their father’s name”.  The plaintiff did not in terms state that she herself had no such knowledge or understanding regarding the defendant’s beneficial ownership of those shares in the Deceased’s securities account.

20.  In paragraph 23 of the plaintiff’s Affidavit in reply, she stated that she had been advised by her solicitors and truly believed that the deponent (ie the defendant) can be subject to cross-examination at the substantive hearing of these proceedings.  Yet, there is no application made under the Rules of the High Court for the defendant to attend court and be cross-examined at the hearing.

21.  In any event, the matter now before the court is about the rendering of proper accounts, and, to some extent, the distribution of the Estate’s assets.  I agree that the defendant has discharged her duties by rendering the aforesaid accounts and providing the supporting documents. She is willing to distribute the net assets in accordance with the provisions of the intestacy scheme.

22.  As to the subsidiary complaints by the plaintiff, regarding the defendant’s “fee” for administration of the Estate, Mr Paul HM Leung, counsel for the defendant, has confirmed during the hearing that such “fee” in fact refers to the expenses in carrying out the administration of the Estate, including legal costs, which cannot be quantified at the present stage.  Mr Leung has further confirmed that the defendant will not be charging any fee for the administration of the Estate.

23.  As to the expenses relating to the niche in Macau, Mr Leung confirmed that since the filing of the defendant’s affidavit evidence, the defendant has been provided with the relevant information, and the defendant undertook to provide that information to the plaintiff within 7 days.

24.  I further note the undertaking by the defendant given at the hearing that she would give an updated account of the Estate within 7 days of the date of the hearing.

F.  Explanation for no distribution of the Estate up to now

25.  By her letter of 19 October 2018, the defendant provided an account of the Estate and indicated that she would distribute to those beneficiaries wanting distribution once everyone agreed on the accounts.

26.  I agree that the defendant’s desire to have consensus from all parties concerned as to the estate account is understandable, especially in light of the plaintiff’s litigious stance over the years.  If there were further dispute after distribution, the defendant could end up having to foot the litigation costs defending her actions, running into hundreds of thousands of dollars (if not more), when the only so-called dispute on the size of the Estate, insofar as the plaintiff is concerned, is capped at 10% (being the size of her share in the Estate) of the value of shares worth around HK$1.38 million at the time of the death of the Deceased.

G.  Conclusion on the relief claimed under the OS

27.  For the reasons stated above, I agree that no order need to be made for the rendering of further accounts for the Estate. Accordingly, I make no order under paragraph 1 of the OS.

28.  As for paragraph 2 of the OS, the plaintiff has not particularised how she wants this court to direct the distribution of the Estate.  Given the state of the evidence and the defendant’s expressed willingness to distribute the Estate to those beneficiaries who want distribution (ie the plaintiff), I agree that it is not necessary to make any order under paragraph 2 of the OS.

29.  I see no reason why costs should not follow the event.  I order that the costs of the OS be paid by the Estate.  I further order that the costs of the hearing of the OS before DHCJ Sherrington on 22 November 2018 and the costs of the hearing before me on 20 November 2019 be paid by the plaintiff, such costs are to be taxed if not agreed.

H.  Costs of the Specific Discovery Summons

30.  I agree with the defendant’s submissions that the costs of and occasioned by the Specific Discovery Summons should be borne by the plaintiff.

31.  In her application for specific discovery, the plaintiff asked for 2 categories of documents: (i) written proof (agreement, records, bank passbooks and bank statements) that support the defendant’s contention that the Disputed Shares were held on trust for the defendant by the Deceased; and (ii) the September 2015 Statement.

32.  As regard the first category of documents, I am of the view that the plaintiff had failed to establish a prima facie case that such documents existed or that such documents were in the possession, custody or power of the defendant.

33.  As regard the September 2015 Statement, I accept that, as stated in the defendant’s solicitors’ letter dated 20 November 2018, as early as 2 November 2018 the plaintiff’s solicitors had been told that the defendant was in the course of obtaining the same from the bank and the same would be provided to the plaintiff.  In the circumstances, the plaintiff should not have proceeded with the specific discovery application in respect of the September 2015 Statement.

34.  Lastly, I express my gratitude to counsel on both sides for their helpful assistance in this matter.