LEE SUI HONG JEROME, AS THE ADMINISTRATOR OF THE ESTATE OF KAN HAK MING DECEASED v. YE JINXIANG ALSO KNOWN AS YE JINXIANG ALSO KNOWN AS YIP YIM KAM AND OTHERS

HCMP 106/2022

[2022] HKCFI 3580

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 106 OF 2022

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BETWEEN

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REASONS FOR DECISION

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Introduction

1.  The three named defendants in the present application are the present beneficiaries of the estate of the Deceased (“Estate”). They will be referred herein respectively as “Mr Ye”, “Madam Yu”[1], and “Madam Ye”[2] (collectively “Beneficiaries”). The present application is commenced by the administrator of the Estate (“Administrator”) for directions on administration matters regarding the Estate. Various directions were granted by this Court at the hearing on 2 November 2022 (“Hearing”) for which reasons are set out hereinafter.

Brief Background

2.  Mr Ye had two siblings, namely a brother Mr Yip Yim Fan William and a sister Madam Ye (the 3^rd defendant herein)(the three of them will be referred to collectively as “Siblings”). The brother Mr Yip Yim Fan William passed away on 23 March 2011, leaving Madam Yu, the 2^nd defendant herein, his widow, the sole executrix and sole beneficiary of his estate under the grant of probate in HCAG 6449/2012. Madam Ye passed away on 31 October 2022, shortly before the hearing before this Court. The father of the Siblings was Mr Yip Ching Bong (“YCB”).

3.  The Deceased died intestate on 24 April 2005, domiciled in Hong Kong. She had no children of her own.

4.  There have been a number of proceedings in connection with the Estate, amongst which the following:

(1) Caveat Proceedings (HCCA 2188/2010 & HCCA 2837/2012) entered into by Mr Ye in respect of the application for letters of administration of the Estate by Mr Kam Ping Kwong (“Mr Kam”) who claimed to be the Deceased’s brother;

(2) Probate Action HCAP 25/2012 commenced by Mr Ye against Mr Kam, seeking amongst other things declarations that the Deceased was the concubine of YCB whose three children born out of his marriage with his principal/kit fat wife Madam Wong Fuk, namely the Siblings, were “issues” of the Deceased as defined under the Intestates’ Estate Ordinance, Cap 73 (“Main Action”). Mr Ye successfully obtained the declaration/s on 20 October 2016[3]. Mr Kam subsequently applied under HCMP 3548/2016 for leave to appeal out of time (“Leave Application”), but the Leave Application was dismissed by the Court of Appeal on 6 March 2017.

(3) Pursuant to the declaration/s in the Main Action, Mr Ye applied and was granted letters of administration of the Estate under HCAG000544/2017. Prior thereto, letters of administration pendente lite had been granted under Grant No HCAG 11446/2016 on 16 August 2016 to one Mr Fu Yu Hong pending the determination of the Main Action.

(4) Mr Ye had incurred substantial costs in the Main Action and related proceedings including the Leave Application (“Related Proceedings”) which were paid by Mr Ye out of the Estate (“Legal Costs”). Although Mr Ye was awarded various costs orders against Mr Kam in the Main Action and the Leave Application, such had not been paid by Mr Kam. Mr Ye subsequently took out garnishee proceedings against Mr Kam in both the Main Action and the Leave Application to enforce those costs orders, but Mr Ye’s application was refused by the master. His appeal out of time against the master’s decision was dismissed by DHCJ Keith Yeung SC (as he then was). He then lodged a further appeal to the Court of Appeal under CACV 588/2018 which was dismissed on 12 March 2019.

(5) Thereafter, Madam Ye commenced HCMP 754/2019 to remove Mr Ye as administrator. Pursuant to a judgment dated 2 July 2021 and an order of the same date made by Wilson Chan J (respectively “Removal Judgment” and “Appointment Order”), Mr Ye was removed as the administrator of the Estate and the Administrator herein, namely Mr Lee Sui Hong, Jerome, a professional accountant, was appointed in place of Mr Ye. Mr Ye was also ordered to provide a true and perfect inventory and account of the Estate and to allow Madam Ye to inspect all supporting documents in relation to the Estate account and to take copies thereof.

(6) Subsequent thereto, Mr Ye applied for a retrospective Beddoe Order under HCMP 1148/2021 for the Legal Costs to be treated as administration costs recoverable out of the Estate (“Retrospective Beddoe Application”). The Retrospective Beddoe Application was dismissed on 7 June 2022 by Keith Yeung J[4], and Mr Ye has since appealed against that decision. The appeal under CACV 262/2022 (“Appeal”) is scheduled for a hearing before the Court of Appeal on 31 January 2023[5].

5.  Counsel Mr Raymond WN Tsui appeared for the Administrator at the Hearing, Counsel Mr Ian Chu appeared for both Mr Ye and Madam Yu (collectively “Opposing Ds”). Prior to Madam Ye’s death, her Counsel Fung Pak Kay had lodged skeleton submissions on her behalf but upon Madam Ye’s death, such retainer came to an end, and with leave of this Court, her legal representatives were absent at the Hearing. As seen in their skeleton submissions, Madam Ye’s stance was to support the Administrator’s applications save and except the issue of costs.

Directions sought by the Administrator

6.  The directions sought by the Administrator in the amended originating summons are mainly as follows:

(1) The Administrator be authorized to appoint solicitors to discharge his duty as administrator of the Estate, at the rate of HKD 4,000 per hour and such fees be borne by the Estate (“Legal Services”);

(2) The Administrator be at liberty to apply the funds of the Estate towards payment of all costs and disbursements as may be incurred by the Administrator in the administration of the Estate (“Administration Costs and Disbursement”);

(3) The Administrator be at liberty to distribute the assets transferred by Mr Ye to the Administrator on 22 December 2021 and listed as items 2 to 31 of the schedule annexed to the originating summons in HCMP 754/2019 (“Schedule”), in specie, in such shares or items as may be agreed in writing by the three beneficiaries or their personal representative (“Distribution of Assets in the Schedule”);

(4) The Administrator be at liberty to make the 6^th distribution of the Estate of HKD 3.9m, ie HKD 1.3m to each of Ds (“Distribution in Cash”);

(5) Whether the Administrator should commence a legal action against Raymond Cheung & Chan, solicitors for Mr Ye and Madam Yu (“RCC”), for discovery of various documents (“Intended Discovery Proceedings”);

(6) A Beddoe order for amongst other things the Administrator to join the Retrospective Beddoe Application in HCMP 1148/2021 (“Intended Joinder Application”)(“Beddoe Order”).

7.  Prior to the Hearing, the parties were able to reach agreement on two of the above six matters, namely the Distribution of Assets in the Schedule and the Distribution in Cash, and on 14 June 2022, a consent order had been made accordingly.

Legal Services

8.  At the Hearing, Mr Tsui clarified that what the Administrator was seeking were directions to authorise him to appoint solicitors and to seek legal advice on the Legal Costs incurred by Mr Ye and paid out of the Estate, namely in view of the quantum, namely whether the Administrator should be authorised to issue the discovery proceedings for documents in relation to the Legal Costs[6] (ie the Intended Discovery Proceedings) and also whether the Administrator should apply to join the Retrospective Beddoe Application in HCMP 1138/2921 (ie the Intended Joinder Application).

9.  However, at the moment, the Appeal in respect of the Retrospective Beddoe Application has not yet been heard and the question of whether Mr Ye was entitled to pay the Legal Costs out of the Estate and/or whether the Estate was liable to pay the Legal Costs has not yet been determined. If the Appeal is unsuccessful, then the Estate may be entitled to recover the entire amount of Legal Costs from Mr Ye. Thus, it is premature to retain solicitors and/or to seek counsel advice for the Legal Services in relation to the Intended Discovery Proceedings, and the application for authorisation to retain solicitors for such purpose was thus adjourned sine die by this Court, with liberty to restore after determination of the Appeal.

10.  As for the Intended Joinder Application, at the Hearing, the Administrator decided to re-consider the direction sought in light of the Appeal. As a result, the application to retain solicitors and/or to seek counsel advice for the Intended Joinder Application was also adjourned by this Court sine die generally with liberty to restore.

11.  In connection with the above directions sought by the Administrator, the Opposing Ds had issued a late summons on 31 October 2022 for leave to file an affirmation of their solicitor, Mr Yau Chap Yiu to support their opposition to the directions sought by the Administrator in respect of the Legal Services. In light of the applications for the above directions being adjourned sine die, the summons issued on 31 October 2022 was agreed to be adjourned sine die with liberty to restore, with costs reserved.

Administration Costs and Disbursement

12.  At the Hearing, there was no objection from the Opposing Ds that costs and disbursements reasonably incurred by the Administrator in relation to administration of the Estate should be paid out of the Estate, and that such costs should be subject to section 60 of Probate and Administration Ordinance, Cap 60. As a result, an order was made in such terms.

Beddoe Order

13.  The Beddoe Order sought by the Administrator was in connection with the Intended Discovery Proceedings and the Intended Joinder Application. In light of what was said earlier, the Beddoe Order sought in relation to the Intended Discovery Proceedings was agreed by the Administrator to be adjourned sine die with liberty to restore upon determination of the Appeal. As for the Beddoe Order sought for the Intended Joinder Application, this was also agreed by the Administrator to be adjourned sine die generally with liberty to restore.

Costs

14.  Having considered the submissions from all the parties, and in light of those parties present at the Hearing being largely able to reach consensus after this Court’s preliminary comments, this Court ordered that the Administrator’s costs of the originating summons be paid out of the Estate, to be taxed if not agreed on trustee basis. As for the three defendants’ respective costs, these were ordered to be also paid out of the Estate, to be taxed if not agreed, on party and party basis.