CHU YA TAK v. CHU STELLA YA WING

HCMP 1255/2025

[2026] HKCFI 1911

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1255 OF 2025

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J U D G M E N T

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A. INTRODUCTION

1.  The Plaintiff (“P”) is the younger brother of the Defendant (“D”).  These proceedings concern the estate (“the Estate”) of their late mother (“Mother”), the late Madam Chu Ng Bik Ling.  At present, D is the sole executrix of the Estate.

2.  By the Originating Summons (“the OS”) herein, P seeks the following reliefs:

(1)     that D be removed as the executrix of the Estate and P be appointed as the executor of the Estate (“the Removal Order”);

(2)     alternatively, an order that D do procure the Estate to make a payment of no less than HK$6,417,118.80 (“the Claimed Sum”) to P within 28 days (“the Payment Order”).

3.  This is the substantive hearing of the OS.  In this hearing, P is represented by Mr Leon Ho, and D is represented by Mr Alex Chan.

4.  In his skeleton submissions dated 17 March 2026, Mr Ho indicated that D had paid a sum of HK$4,587,970.01 (“the Sum”) to P.  Mr Ho also submitted that the administration of the Estate, so far as P is concerned, is mostly (although not fully) completed.  Given the recent development, P has decided not to pursue for the substantive reliefs set out in the OS.  However, P would seek costs of these proceedings against D personally.

5.  At the beginning of this hearing, given the stance adopted by P, I granted leave to P to withdraw the OS.

6.  The only issue to be resolved by this Court in this hearing is who should bear the costs of these proceedings.  Each side claims that costs of these proceedings should be borne by the other side personally.

B.BACKGROUND[1]

7.  The Mother passed away on 26.11.2022.  By her last will dated 17.06.2021 (“the Will”), D was appointed as the sole executrix the Estate.

8.  On 20.06.2023, probate was granted to D.

9.  According to the Will, the assets in the Estate are bequeathed to the following beneficiaries:

(1)     an immovable property in Canada (“Canada Property”): to P and D in equal shares;

(2)     an immovable property in Hong Kong (“Hong Kong Property”): to P;

(3)     a car parking space in Hong Kong (“Parking Space”): to D;

(4)     Gold ornaments and jewellery: to D; and

(5)     Cash in bank accounts and shares held in securities accounts and in scrip form (“Shares”): to be divided into 3 equal shares: (a) one share to P; (b) one share to D; and (c) one share to D for setting up a fund for ancestral worship and the maintenance of ashes depository (“the Ancestral Worship Fund”).

10.  On 07.08.2023, P expressed an interest to buy D’s 50% share of the Canada Property.  On 30.08.2023, D said she did not object to the proposal, and recommended a Canadian lawyer (Joyce Lee) to handle the transaction.  On 05.09.2023, P agreed to purchase the Canada Property at CA$908,500, if all the relevant expenses (“the CP Expenses”) were paid out of the Estate.  D agreed the next day.  On 07.09.2023, P agreed to engage Joyce Lee introduced by D for the transaction.

11.  On 14.09.2023, the Parking Space was assigned to D.

12.  On 09.11.2023, P asked for the progress of Joyce Lee’s work, and demanded payment of his share of the Cash and the Shares.

13.  On 21.11.2023, D sent a letter to P, setting out the progress of dealing with the Canada Property.  D also stated that the Cash amounted to HK$32,200,077.24.  D estimated that around HK$1.1m expenses would be incurred by the Estate.  HK$330,485 was expenses already incurred (“D’s Expenses”), and HK$780,000 were expected expenses (which include the CP Expenses).  D proposed to absorb this HK$1.1m into the Ancestral Worship Fund, and pay 1/3 of the Cash to P.

14.  On 29.11.2023, the gold ornaments and jewellery were collected by D’s lawyers.

15.  On 14.12.2023, P did not accept D’s proposal for distribution as set out in [13] above.  P asked for documentary evidence of the expenses.  At the same time, P claimed that he had spent some 112 expenses totalling HK$683,759.72 to deal with the Canada Property on Mother’s behalf (“P’s Expenses”), and asked that those expenses be borne by the Estate.

16.  On 18.12.2023, the Hong Kong Property was assigned to P.

17.  On 22.12.2023, D said that it was uncertain whether Joyce Lee could act for both parties as to the Canada Property, and asked if P wished to sell the Shares.  D also produced receipts for D’s Expenses.  As to P’s Expenses, D said that only 13 out of the 112 items were paid after Mother’s death (which D asked for proof), and those paid before that date should not be borne by the Estate.

18.  On 28.12.2023, P asked whether Joyce Lee would act for both parties.  P complained that D only produced receipts for part of D’s Expenses.  As to P’s Expenses, P produced bank statements as proof.  P said that he might sue the Estate to recover those expenses.  P also asked D to sell the Shares and pay him his share of the proceeds as soon as possible.

19.  On 08.01.2024, 1/3 of the Shares were sold.

20.  On 09.01.2024, D filed an Additional Schedule of Assets and Liabilities.  It was discovered that there was HK$770,332.71 cash in a securities account of the Mother (“the Additional Cash”).

21.  On 10.01.2024, D provided 15 pages of further receipts of D’s Expenses.  As to P’s Expenses, D said the bank statements could not show the relevant payments were made in relation to the Canada Property, and asked for more record.  D also updated P on the progress of selling the Shares.

22.  On 23.01.2024, P chased the engagement of Joyce Leung.  P also said that the receipts produced by D were insufficient in support of D’s Expenses.  As to P’s Expenses, he said he would send another letter to enclose the relevant proof.

23.  On 01.02.2024, D distributed 2 sums to P: (a) HK$2,488,027,23 (P’s entitlement in the Shares); (b) HK$5m (around 50% of P’s share in the Cash).  As to P’s other 50% share, D said that it “will be paid till and after all the claims (including your client’s claim for [P’s Expenses]) are met and settled”.

24.  On 02.02.2024, P complained that D refused to pay HK$10,733,359.08 (1/3 of the Cash) as promised, and said that he might commence proceedings for his other 50% share of the Cash.

25.  On 05.02.2024, D said that when she proposed to pay P HK$10,733,359.08, P had not yet made his claim for P’s Expenses.  Now that P might have claims against the Estate, D asked P to raise them in one go so that P’s entitlement can be ascertained.  D would withhold payment in the meantime.

26.  On 27.02.2024, D said that Joyce Lee indicated that she would not act for both P and D as to the Canada Property.

27.  On 29.02.2024, 1/3 of 30,000 CLP Holdings shares Mother held in her account with Everbright Securities Investment (HK) Ltd (“Everbright”) were sold.  On 11.03.2024, D paid proceeds of HK$658,105.14 to P.  D also told P that there were some complications in selling shares in MTRC held by Mother.  On the same day, P asked D how she would deal with the MTRC shares.

28.  On 15.03.2024, P asked D to pay him his share of the Additional Cash.

29.  On 19.03.2024, shares in MTRC held by Mother were sold.

30.  On 25.03.2024, as Joyce Lee could not act for him, P asked D to nominate a Canadian lawyer for him.  On the same day, D updated on the MTRC shares, and said she would pay P his share of the proceeds in 10 days.

31.  On 02.04.2024, D distributed 2 sums to P: (a) HK$18,648.80 (P’s share in the MTRC shares); (b) HK$296,989.46 (P’s share in the cash in Mother’s account with Everbright).

32.  On 09.04.2024 and 12.04.2024, P and D discussed the progress of the Canada Property transaction. From 15.04.2024 to 25.04.2024, they exchanged letters on deregistering a company called T.C. Enterprises Ltd.

33.  On 04.07.2024, P chased the progress of the Canada Property.  D replied and updated him on 08.07.2024. P chased again on 28.08.2024.

34.  On 03.09.2024, D updated P that Mother’s probate was finally resealed by the Canadian Court, and attached a copy to him.  The next day, P asked D to propose a Canadian lawyer.  On 10.09.2024, D proposed a Canadian lawyer Ivan Lai.  On 08.01.2025, P supplied further information to the Canada Property purchase, and agreed to engage Ivan Lai.  On 27.02.2025, D said she was ready to transfer the Canada Property to P. On 22.05.2025, D sought further documents from P.  On 09.06.2025 and 24.06.2025, D chased again and demanded a response (otherwise she would sell it in open market) as the tax for vacant properties in Canada is high.  On 26.06.2025, P replied and objected to D putting the Canada Property on sale, and said he was still working on the logistics.

35.  On 03.07.2025, P brought up the topic of his other 50% share in the Cash, and demanded payment of it together with P’s Expenses within 7 days.

36.  On 09.07.2025, D chased again on the Canada Property sale.  On 18.07.2025, P said he was still working on the logistics of the sale.  On 24.07.2025, D chased again and reminded P that the sale would take more than 1 month to process.

37.  On 28.07.2025, P issued the OS herein.

38.  On 31.07.2025, D said that P had received half of his share in the Cash; payment of the other half “will have to wait till all the debts, tax, duty etc. have been cleared as stated in the Residue Clause”.  D asked for documentary proof of P’s Expenses.  D also said that the total distribution and expenditure amounted to HK$8,567,958.94, which consisted of (a) HK$6.9m distributions (HK$5m to P and HK$1.9m to D herself); and (b) around HK$1.67m expenses. 

39.  On 26.08.2025, P asked for more documents for D’s Expenses.  As to his own P’s Expenses, P did not provide further documents and asked D to approach the Canadian authorities and find out the nature of the expenses herself.

40.  On 02.09.2025, D again asked for documents for P’s Expenses.

41.  On 09.09.2025, P again said there were insufficient documents for D’s Expenses.  He also said that food expenses should not count as funeral expenses.

42.  On 16.09.2025, P and D entered into a sale and purchase agreement for the Canada Property.  Completion was to take place on 09.10.2025.

43.  On 19.09.2025, D provided a further set of receipts and evidence for D’s Expenses.

44.  The purchase of the Canadian Property was not completed on 09.10.2025, but was completed on 09.12.2025.

45.  On 29.01.2026, P asked if D would distribute P’s remaining share in the Estate to him, because the purchase of the Canada Property had been completed, and the reason for not making distribution no longer existed.  On 20.02.2026, P proposed that (a) D might reserve at most HK$2m for D’s Expenses and to cover P’s potential claim for P’s Expenses, and (b) distribute P’s share to him from the remainder.

46.  On 02.03.2026, D agreed and indicated that she had instructed an accountant to work out the precise amount to be distributed.  On 10.03.2026, D sent a report prepared by an accounting firm (“the Report”), which concluded that the sum to be distributed to P was the Sum.  On 11.03.2026, P asked D to pay this sum to him, but he reserved the right to claim for further sums.  In their letter dated 11.03.2026, P’s solicitors said:

“……we note that the Report was prepared based on documents provided by your client to [the accounting firm] with some assumptions, and the Report is not meant to be an audit. It is not clear if the documents your client provided to [the accounting firm] have been provided to our client, and why your client believes that the assumptions are true. To avoid further delay, without prejudice to our client's rights to challenge on the contents, the allegations and the calculations contained in the Report, please let us have the payment for HK$4,587,870.01 by cheque payable to our firm being part of our client's entitlement as soon as possible.

Our client reserves his rights to claim for any further sum which our client is entitled under the estate of the deceased.”

47.  On 13.03.2026, D distributed the Sum to P.

C.      THE PRINCIPLES

48.  The principles concerning costs in administration proceedings have been succinctly summarized by DHCJ Dawes SC in Cheuk Lai Mau v Cheuk Lai Sheung[2]:

(1)     The starting point is Order 62, rule 3(2), which sets out the general rule that costs shall follow the event.  As an exception, in trust and probate matters, if administration proceedings are properly instituted (whether by the executor or a beneficiary) for benefit of the estate, the Court may make an order that costs incurred by all necessary parties be taxed as between solicitor and client and borne by the fund or estate.

(2)     However, if the application is made by a beneficiary and is in substance an adverse claim made in hostile litigation, the usual approach to costs in hostile litigation (i.e. costs follow the event) should be applied.

(3)     Order 62, rule 6(2) provides for costs of the executor:

“Where a person is or has been a party to any proceedings in the capacity of trustee, personal representative or mortgagee, he shall, unless the Court otherwise orders, be entitled to the costs of those proceedings, in so far as they are not recovered from or paid by any other person, out of the fund held by the trustee or personal representative or the mortgaged property, as the case may be; and the Court may otherwise order only on the ground that the trustee, personal representative or mortgagee has acted unreasonably or, in the case of a trustee or personal representative, has in substance acted for his own benefit rather than for the benefit of the fund.” (Emphasis added)

(4)     The general rule is that a trustee is entitled to an indemnity out of the trust fund for all costs and expenses properly incurred by him in connection with the performance of his duties and exercise of his powers and discretions as a trustee. “Properly incurred” means costs which are honestly and reasonably incurred.  Any doubts are to be resolved in favour of the trustee.  However, the right of indemnity can be lost or curtailed by inequitable conduct on the part of the trustee amounting to a violation or culpable neglect of his duty.  The word “misconduct” should be widely construed and may include caprice and obstinacy, neglect, negligence, or even unreasonable conduct.  While the mere fact that the trustee has made a mistake is not enough, it is equally clear that dishonesty is not requisite.

49.  The principles set out by Kekewich J in Re Buckton[3] are also relevant.  Regarding these principles, in Cheng Pui Yuen v Worldcup Investments Inc[4], Lord Scott of Foscote NPJ said:

“56. The case on costs …… is based on the principle that where proceedings have been properly instituted for the benefit of a trust fund, or a deceased’s estate, the court may, in an appropriate case, make an order for the costs of the proceedings to be borne by the fund or estate, as the case may be. The principle was explained by Kekewich J in Re Buckton [1907] 2 Ch 406 at pp.414/415. He referred, first, to cases in which trustees ask the court to determine some question which has arisen in the administration of the trust. In such cases, said Kekewich J, the general rule would be that the costs of all necessary parties would be taxed as between solicitor and client and paid out of the estate. He then referred to a second class of case in which the question for determination by the court is raised not by the trustees but by some of the beneficiaries. In such a case, if the question raised would have justified an application by the trustees but for some reason or other the application has been made by beneficiaries, the same costs consequences, he said, should follow:

‘The application is necessary for the administration of the trust, and the costs of all parties are necessarily incurred for the benefit of the estate as a whole.’ (p.415)

Kekewich J distinguished, however, the first and second classes of case from the third class, a class where the application to the court is made by a beneficiary but is, in substance although not in form, an adverse claim made in hostile litigation. In such a case, said the judge, the rule applicable to hostile litigation should be applied and the unsuccessful party ordered to pay the costs.

……

58. There is, moreover, a further principle regarding litigation to resolve questions arising in the administration of a deceased’s estate that needs to be borne in mind. If it is the deceased who is responsible for the creation of the doubts that have necessitated an application to the court for the doubts to be resolved, it is the deceased’s estate on which the costs of the application should fall. The principle is a well known one: “where the difficulty is occasioned by the … conduct of the testator … the costs are costs of administration” ……

59. But these principles do not constitute rules. They provide a guide as to how, in probate or administration proceedings, judicial discretion regarding the costs of litigation should be exercised. The answer to that may depend not only on the principles referred to but also upon the particular circumstances in which the litigation has been commenced and prosecuted. ……” (Emphasis added)

50.  In applying the principle of costs following the event, the Court would need to assess which party is the successful party in the proceedings.  In considering this issue, the following principles are relevant[5]:

(1)     When a party has achieved substantially what he or she sought in the action or application, costs should be awarded to him. This is an application of the principle that normally costs should follow the event.

(2)     The court does not adopt a mechanical approach, and instead looks into the substance and the merits of an application.  If, but for a plaintiff’s application, he would not have obtained the relief he seeks, then he is in effect the substantive winner of the case.

(3)     The fact that a defendant consents to the claims by a plaintiff which renders it unnecessary for the plaintiff to continue the action or summons should not be a reason for denying the plaintiff his costs.

51.  The question of which party has succeeded is a matter for the exercise of common sense.  In some cases, the question of who is the unsuccessful party can easily be determined by deciding who has to write the cheque at the end of the case.[6]  The Court should consider whether the plaintiff has won anything of value which he could not have won without fighting the action.[7]

52.  A distinction should be drawn in which (a) the successful party lost on a separate head of claim, and (b) the successful party lost on a separate basis for putting the successful party’s only claim.  Thus, where the successful party lost on an issue which it would not have litigated if the unsuccessful party conceded the issue on which the successful party won, the unsuccessful party should pay all or a very substantial part of the successful party’s costs[8].

53.  The fact that the plaintiff framed its case in terms of alternative relief and succeeded on one alternative in substantial part, and the fact that its success was so limited is no satisfactory reason to reduce an award of costs.  A plaintiff should not be punished for formulating a claim in the alternative, and costs should not be dependent upon success in every aspect of relief sought.[9]

D.      DISCUSSION

54.  Having considered the evidence before me and the parties’ respective submissions, I am of the view that costs of these proceedings should be borne by D personally for the following reasons:

(1)     The general rule of costs following the event should apply and P is the successful party in these proceedings.

(2)     D has acted unreasonably by adopting the stance that the remaining balance of 1/3 of the Cash would not be distributed to P until all claims against the Estate met and settled.

D1.  Costs following the event

55.  There is no dispute that this case is a “category 3” case in the Re Buckton taxonomy.  This case is a hostile litigation.  Each side is claiming that costs of the proceedings should be borne by the other side personally.  Accordingly, the general principle of costs following the event should apply.  I have to consider who is the successful party in these proceedings.

56.  Mr Chan submits that P cannot be regarded as the successful party in these proceedings for the following reasons:

(1)     P has failed to obtain the Removal Order.  Even if P pursues his application for the removal of D as the executrix of the Estate, the application is bound to fail, for D has been diligently and actively administering the Estate at all times.

(2)     In his application for the Payment Order, P is seeking an order to require D to pay him the Claimed Sum.  P has failed to achieve the task.  Although P obtained the Sum, the Sum is less than the Claimed Sum.  Further, the Claimed Sum and the Sum rested on fundamentally different bases.

(3)     According to P, the Claimed Sum consists of 2 sums, (a) HK$5,733,359.08, and (b) HK$683,759.72.

(a)     The HK$5,733,359.08 was said to be the remainder of P’s 1/3 share of the Cash that remained unpaid.  This was derived from D’s proposal on 23.11.2023, where D stated the value of the Cash was HK$32,200,077.24.  P took this figure and deducted the HK$5m distributed to him on 01.02.2024, arriving at HK$5,733,359.08.  P’s basis is unfounded.  The proposed sum of HK$10,733,359.08 was calculated on the basis that the Estate’s expenses only amounted to around HK$1.1m, which turned out to be less than the actual expenses (see [38] above).  The proposal was also made when P had not yet claimed P’s Expenses.  After P made his claim, the amount available for distribution would have to be adjusted.

(b)     The HK$683,759.72 is P’s Expenses claimed by P.  There is no basis in support of such a claim.  The proper approach is to first ascertain the amount of P’s Expenses, deduct it from the Estate’s assets, and to work out the remaining Cash to be distributed in the Estate.

(4)     The Sum was arrived after taking into account the Estate’s expenses, including the CP Expenses.

(5)     Since there is no proper basis in support of the Claimed Sum, P would not be able to get it anyway. The fact that D distributed the Sum to P does not mean P got what he wants.

(6)     Further, “but for” causation is not satisfied.  P cannot show that he would not have obtained the Sum but for issuing the OS.

(7)     P should never have claimed the Claimed Sum by way of OS in the first place.  There are plainly factual disputes as to the amount of D’s Expenses and P’s Expenses, as evident from parties’ demand for documentary proof against each other.  The Court cannot resolve those disputes on affidavits and grant P the Claimed Sum.

57.  With respect, I am unable to agree with Mr Chan.

(1)     As pointed out by Mr Ho, P is applying for (a) the Removal Order or (b) the Payment Order.  P is not seeking both reliefs but is seeking either relief.  After issuing the OS, P has obtained the Sum from D, which is a substantial part of the Claimed Sum in the Payment Order sought by P.  In these circumstances, P should be regarded as the successful party in these proceedings.[10]

(2)     I agree with Mr Ho that after informing P that there was a cash balance of HK$32,200,077.24 on 21.11.2023, D did not give any further update of the cash position of the Estate.  D has not provided any proper account of the Estate to P.[11] In the circumstances, P would have genuine difficulties in assessing his exact entitlement in the Estate.  These difficulties are caused by D having not fulfilled her duty to render a proper account of the Estate to P.  D cannot criticize P for not spelling out the exact figure of his entitlement, while P’s difficulty in doing so is caused by D’s fault in failing to render a proper account of the Estate to P.

(3)     It is worth to note that in P’s position as stated in his solicitors’ letter dated 11.03.2026 is that his acceptance of the Sum does not mean that his entitlement is limited to the Sum, and he has reserved the right to claim further sum(s) against D. The sole purpose of accepting the Sum is to avoid further delay in getting some payment from the Estate.

(4)     For the reasons set out in [62] below, there is no valid reason in support of D’s stance that the HK$5,733,359.08 should not be distributed to P just because of the existences of P’s claim for P’s Expenses and D’s claim for D’s Expenses.

(5)     It is indisputable that the Sum is a substantial part of the Claimed Sum.

(6)     As to the causation point taken by Mr Chan, the reality is that the Sum was only paid to P after P taking out the OS.  There is no evidence showing that D was willing and prepared to pay the Sum to P irrespective of these proceedings.

In view of all these, applying common sense, it is plain that P should be regarded as the successful party in these proceedings.

58.  In my judgment, P is the successful party in these proceedings.  Applying the general rule of costs following the event, costs of these proceedings should be paid to P by D.

D2.  D having acted unreasonably

59.  The duty of an executor is to act with reasonable diligence in both realising the estate’s assets and discharging debts, and also in distributing the estate to those entitled.[12] An executor can be removed if there has been unjustifiable delay in distributing sums to beneficiaries.[13]  The Court has inherent jurisdiction to order an interim distribution to beneficiaries.[14]  In consider whether an interim distribution should be ordered, the Court would consider the following:

(1)     Whether the estate is sufficiently large that the interim distribution will not impinge on the ability of the estate to meet claims against the estate and likely costs, without prejudicing the beneficiaries and/or claimants of the estate.[15]

(2)     Whether the interim distribution would carry no risk to the administration.  Thus, the executor must retain sufficient assets to ensure the liabilities of the estate can be met in full and that beneficiaries sharing in the residue of the estate under the will shall, in the end result, receive the net share to which they are entitled.  If an interim distribution can be made in an amount which would not present any realistic possibility of jeopardizing the ongoing administration of the estate according to law, then a failure to make it would breach the duty to distribute as soon as may be.[16]

60.  In Gonzales v Claridades[17], Campbell J held at §50 that:

“A further example can arise if there were expenses of administration which would need to be paid in the future from the estate. If those expenses were of uncertain amount (as could be the case if the legal personal representative were engaged in litigation on behalf of the estate) the legal personal representative would be entitled to adopt a very cautious (though not unrealistically cautious) view about what the possible extent of those expenses might be, in deciding whether, or to what extent, a gift might be cut down. If, however, after taking such a cautious view of what the expenses of the estate might be, it was clear that the assets of the estate were more than enough to meet them, and if there were no other problems of administration outstanding, it could be the obligation of a legal personal representative to make an interim distribution of those assets in the estate which are not at risk of being used up in the future administration of the estate, at least in circumstances when it was clear who the correct recipient of those assets was.” (Emphasis added)

61.  In Re Lau Wai Chau (Deceased)[18], DHCJ H Au-Yeung (as he then was) said:

“20. The general principles on interim distribution applicable to the circumstances of the present case are not in dispute and may be summarised as follows:

(1) An administrator has a duty to administer the estate cautiously. He has to ensure that there would be sufficient fund in the estate to make distribution to all the beneficiaries for their shares, taking into account the potential size of the estate: Li Kin Yan & Another v Li Lim Chi Dorothy (HCMP 3425/2015, unreported, 17 February 2017), at [52];

(2) The general rule is that the administrator must discharge the debts of the estate before he satisfies any description of legacy or assents to any devise: Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (21^st edition), at §47-02;

(3) An administrator can be liable for waste (devastavit) if he parts with the assets of the estate without paying or adequately providing for its debts. This is so even if he was unaware of the debt, even if he acted bona fide and in the belief that the estate had ample assets for the payment of such debts and even if the deficiency is occasioned by subsequent events which he had no reason to foresee. It is also so even though a court would have been likely to permit him to distribute had he first sought its directions: Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (21^st edition), at §47-02;

(4) The rule whereby the payment of debts takes priority over the payment of beneficiaries extends to future and contingent debts. Thus, before any of the estate can properly be distributed to the beneficiaries, an administrator must provide for future and contingent liabilities of the estate. Where there are contingent liabilities, an administrator is not bound to distribute assets to a beneficiary without first making a retention from the estate’s assets or obtaining some form of security or indemnity as a condition of any distribution: Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (21^st edition), at §47-09;

……

(7) If the expenses to be paid by the estate were of uncertain amount (as could be the case if the legal personal representatives were engaged in litigation on behalf of the estate), the legal personal representative would be entitled to adopt a very cautious (though not unrealistically cautious) view about the possible extent of those expenses might be, in deciding whether, or to what extent, a gift might be cut down. If, however, after taking such a cautious view of what the expenses of the estate might be, it was clear that the assets of the estate were more than enough to meet them, and if there were no other problems of administration outstanding, it could be the obligation of a legal personal representative to make an interim distribution of those assets in the estate which are not at risk of being used up in the future administration of the estate: Gonzales v Charidades [2003] NSWSC 508, at [50].” (Emphasis added)

62.  Before P commenced these proceedings, D refused to distribute the remaining balance of 1/3 of the Cash in the Estate or any part thereof to P.  In my view, in doing so, D was acting unreasonably.

(1)     On 23.11.2023, D said that the Cash in the Estate amounted to HK$32,200,077.24.  She proposed to absorb D’s Expenses (estimated total being around HK$1.1m, which include CP Expenses) into the Ancestral Worship Fund and pay 1/3 of the Cash to P.  1/3 of the Cash would be slightly over HK$10m.  That would mean that the Ancestral Worship Fund would also be slightly over HK$10m.  In the circumstances, there should be an interim distribution of around HK$10m to P.

(2)     On 14.12.2023, P raised the issue of P’s Expenses, the total of which being HK$683,759.72.

(3)     On 01.02.2024, D distributed HK$5m to P.  The remaining balance of the 1/3 of the Cash to P is HK$5,733,359.08.

(4)     On 05.02.2024, D said that since P had raised the issue of P’s Expenses, D would withhold further payment.  On 31.07.2025, D expressly confirmed that stance again.

(5)     There is no reason to withhold the payment of the remaining balance of the 1/3 of the Cash to P, bearing in mind that (a) the amount of P’s Expenses is less than HK$1m; and (b) while D’s Expenses (which include CP Expenses, and the total of D’s Expenses was around HK$1.67m according to what D said on 31.07.2025) can be absorbed by the Ancestral Worship Fund (the total of which would be slightly over HK$10m), there is no reason why P’s Expenses cannot be taken care of in the same way.

(6)     There is no evidence showing that at any time, D had genuinely estimated that the total of P’s Expenses and D’s Expenses (including CP Expenses) might well be very substantial and the HK$5,733,359.08 of any part thereof should not be paid to P.

(7)     In her affidavit dated 17.11.2025, D said at [4]:

“…… I fully intend to distribute to [P] his full share of the remaining cash balance and the primary reason why this process has been held up is that he has been dragging his feet in dealing with the sale of my interest in the Canada Property which was agreed back in September 2023. ……”

(8)     In my view, it would not be necessary to go into the details to see whether the delay in the sale of D’s interest in the Canada Property is indeed caused by P’s fault. Even if D’s complaint is established, P’s delay cannot be a reason for D (being the sole executrix of the Estate) not to perform her obligations in the administration of the Estate diligently in accordance with the law, including the obligation to make reasonable interim distribution(s) to P.

63.  Since D has acted unreasonably in refusing to distribute the remaining balance of the 1/3 of the Cash to P, P has commenced these proceedings against D to seek either the Removal Order or the Payment Order.  In the circumstances, I am of the view that costs of these proceedings should be paid to P by D personally.

D3. Conclusion

64.  Taking into account all the above, I would exercise my discretion to order that costs of these proceedings be borne by D personally.

E.      DISPOSITION

65.  For the reasons above, costs of these proceedings (including costs reserved, if any) be paid to P by D personally, to be taxed if not agreed.

66.  I thank both Mr Ho and Mr Chan for the helpful assistance provided to the Court.