IP CHEUNG KWOK v. IP SIU BUN AND OTHERS

1984, No. 7440

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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Godfrey, J.

1. On 18th May 1988, I gave judgment in these proceedings but postponed consideration of the terms of the Order to be made in consequence of that judgment. The case was in due course restored to the list and, on 14th September 1988, I heard further argument as to the terms of the Order to be made. On 17th October 1988, I delivered a further judgment dealing with the points raised in argument on 14t h September 1988; and I made an Order to give effect to that judgment. This Order has been the subject of a dispute between the parties which I now have to resolve. Before turning to that dispute I should say at once that in order to understand this judgment reference must be made to the judgments I delivered on 18th May 1988 and 17th October 1988, which I do not intend to recapitulate here, save insofar as necessary to explain my conclusions upon the present dispute.

2. The argument before me on 14th September 1988 concerned a number of matters included in a draft minute of the Order which the Plaintiff had proposed. One of these matters was the proposal of the Plaintiff to include in the order an order for an account and inquiry in the following terms:

"IT IS FURTHER ORDERED that the following account and inquiry be taken and made, that is to say

(1) an account of the rents and profits of the trust estate come to the hands of the Defendants Ip Siu Bun, Ip Cheung Kit Yee and Sin Hua Bank Trustee Limited or any of them; and

(2) an inquiry what has become of any such rents and profits."

The making of this Order for an account and inquiry was not the subject of any argument on 14th September 1988, although much else was. I did however myself suggest (see p.73 of the transcript) that the party to whom the named Defendants ought to account might be, not the Plaintiff, but the duly constituted personal representative of IP Koo Chi (the settlor whose estate I had held entitled, in my judgment of 18th May 1988, to the property the subject of the action). Mr. John McDonnell Q.C., for the Plaintiff, appointed to represent the estate of Ip Koo Chi for the purposes of the action, replied (in my view correctly) that the Defendants were being ordered to account to the Court, not to the Plaintiff. He maintained his position, that the Order should include the Order for an account and inquiry for which be had asked.

3. However, in my judgment of 17th October 1988 1 declined to accept Mr. McDonnell's submission that the Plaintiff (who had not obtained any grant of representation to the estate of Ip Koo Chi) was entitled to institute proceedings against the trustees for the execution of the trusts affecting the trust property. I pointed out that the Plaintiff was strictly speaking, a stranger to the trust; by which of course I meant that even if he was a person, beneficially interested in or entitled to the estate of Ip Koo Chi, he had to be regarded, unless and until he obtained a grant of representation to that estate, a stranger to the trusts affecting the trust property. For this reason, I refused the Plaintiff the Order for sale for which he had asked, a matter which had been argued before me; but I included in the Order which I made the Order for an account and inquiry, a matter which had not been so argued.

4. It now appears to me that it is, at least, arguable that the request made by the Plaintiff for an account and inquiry was a request which, at that stage, I should have refused, just as I had refused the Plaintiff's request for an Order for sale. But I did not do so. The Order I made on 17th October 1988 accordingly included the Order for an account and inquiry to which I have referred; and unless it is reversed on appeal it must be given effect. The Order has been perfected and I have no jurisdiction to recall it even if I were mended to do so. The account and inquiry must proceed and the Plaintiff is entitled to proceed with it.

5. The Plaintiff has, however, encountered a difficulty in doing so, which is why the case has come before me again. The difficulty arises in this way. The Plaintiff was advised, in my view correctly, that following the Order of 17th October 1988 he was entitled to issue a summons to proceed with the account and inquiry thereby ordered. He issued a summons to proceed accordingly, seeking common from directions, and returnable before a master, Master O'Donnell, on 19th December 1988.

6. But one of the Defendants, Sin Hua Bank Trustee Limited ("the bank") was anxious to resist the prosecution of the account and inquiry which had been ordered; so anxious, indeed, that without the courtesy of any prior notification of its intention to the Plaintiff, it attended with leading counsel, Mr. Denis Chang Q.C., before the Master and submitted that the summons to proceed should be dismissed.

7. This ploy succeeded. Aware, presumably, that the effect of a decision in favour of the bank would be completely to frustrate the working out of the Order dated 17th October 1988, the Master, instead of adjourning the summons to the Judge (which he had power to do and which he should have done) elected to deal with it himself. His note (so far as relevant) reads as follows:

"Following decisions of Mr. Justice Godfrey in this action on 18th May 1988 and 17th October 1988 the present Plaintiff does not have the locus standi to seek the directions set out in this summons as he is a stranger to the trust unless and until he is appointed the personal representative of the estate."

8. I am sorry to have to say that this approach was completely misconceived. The Master's duty, on the hearing of the summons to proceed, was to give directions for the working out of the Order for the account and inquiry made on 17th October 1988. The Plaintiff had the carriage of that Order and, having obtained the Order, had the right to prosecute it.

9. I must however add that I have a great deal of sympathy for the Master, faced, as he was, with an argument from leading counsel designed to persuade him to go behind the Order of 17th October 1988 and look at the judgments which led to it, particularly since, as I have said, it is at least arguable that, on the basis of those judgments, the Order for an account and inquiry ought not to have been made at all. But it was made; and the Master was not entitled to frustrate it by dismissing the Plaintiff's summons to proceed. Unless upset on appeal, the Order for an account and inquiry stands; and effect must be given to it, as I have said,

10. The Plaintiff has appealed from the decision of the Master, and it is that appeal with which I am now concerned. I allow the appeal, and I will give the directions which the Master was asked to give (with certain minor variations, which I think it right to make, and with one major variation to which will refer later). There directions are set out in the schedule to this Order.

11. I must go further. It is important, I think, that in future all the interlocutory applications in these proceedings, so far as practicable, should be made to me, and I so direct. I am anxious to avoid the case being further bedevilled with false procedural steps: it already has a most unfortunate history. And, in fairness to all parties, I have decided that there should now be a breathing space of reach party to take stock of his position. The Plaintiff may want to take steps, if he cannot get a full grant of administration in the near future, to try to obtain, or persuade someone else to obtain, a grant pendente lite or colligenda bona. The Defendants may want to include, as a subject of their appeal against the Order of 17th October 1988 (which I understand is pending), the Order for an account and inquiry to which they now take objection. As I have pointed out, only the Court of Appeal can now deal with this. So I will make one major variation to the directions which the Master was asked to give, by extending the time for compliance with the first direction (for filing of accounts) from 14 days after service of the Order to 90 days after such service and of course the Defendants, if, but only if, they have good cause to do so will be able to apply for a further extension of time if so advised. I do not intend to encourage delay; merely to avoid conflict with the progress of the Defendants' appeal to the Court of Appeal.

12. The costs of the Plaintiff of the abortive hearing before the Master, and of this appeal, must be borne and paid by the bank out of its own moneys. I will not at this stage direct an immediate taxation and payment as the Plaintiff has asked me to do; that, as it seems to me, would be unfair to the bank, which challenges, as it always has, the Plaintiff's locus standi and which has an appeal pending from the Order of 17th October 1988. I will however give liberty to the Plaintiff to apply at a later date for a separate taxation and payment of those costs, such application not to be made (without the leave to the Court) before the determination of the bank's appeal.

THE SCHEDULE

1.    Let each of the Defendants Ip Siu Bun, Ip Cheung Kit Yee and Sin Hua Bnak Trustee Limited within 90 days after service of this Order upon them respectively file in the Chambers of the Judge their respective accounts showing

(a)    the amounts of any payments come to their hands either alone or jointly with one or more of the other trustees in respect of the rents and profits of the trust estate (including interest received);

(b)    the person or persons form whom any such payments or interest were received;

(c)    the amounts of any payments made by them either alone or jointly with one or more of the other trustees out of the moneys come t their hands;

(d)    the person or persons to whom any such payments were made; and

(e)    the respective dates of all such receipts or payments

together with an affirmation verifying the same and stating the amount of any balance remaining in their hands or under their control and where and in what form the same is held.

2.    Let each of the said Defendants serve copies of the said accounts and affirmations on the Plaintiff as soon as they have been filed.

3.    Let each of the said Defendants vouch their respective accounts by lodging at the Chambers of the Judge within 14 days after the filing of their respective accounts

(a)    all receipts, invoices, rent demands, paying in slips, cheques or other vouchers evidencing the individual receipts and payments listed in the respective accounts and

(b)    all ledgers, books of account, bank statements, bank books and other documents recording any such receipts or payments or showing the balance remaining in their hands or under their control respectively.

4.    Let the Plaintiff be at liberty to inspect the vouchers, documents and books so lodged and to file in the Chambers of the Judge his objections (if any) to the said accounts within 28 days after all the respective vouchers, documents and books have been inspected as aforesaid.

5. Let the account and inquiry be restored for further consideration before the Judge after the time for filing objections has expired.

6.    And let the parties be at liberty to apply.