YE XIUXIA v. YE JINXIANG AND ANOTHER

HCMP 754/2019

[2021] HKCFI 3927

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 754 OF 2019

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D E C I S I O N

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1.  By the Judgment of this court dated 2 July 2021 (the “Judgment”), it was ordered, inter alia, that:

“(1)   The 1^st defendant do within 28 days provide the plaintiff with a true and perfect inventory and account of the Estate (the “Account”) as verified on Affirmation, including but not limited to the following matters: -

(a)  the funeral expenses of Madam Kan Hak Ming (the “Deceased”);

(b)  the legal costs incurred by the 1^st defendant in HCAP 25/2012; and

(c)  the withdrawal of funds out of the net proceeds of sale of the Shop, if any, being unconditionally stake-held by Messrs Raymond Cheung and Chan, the solicitors of the 1^st and 2^nd defendants;

(2)  The 1^st defendant do within 14 days thereafter allow the plaintiff and/or his legal representatives to inspect all supporting documents in relation to the Account and allow the plaintiff to take copies thereof;

(3)  The 1^st defendant shall be removed as the administrator of the Estate of the Deceased;

(4)  Mr Lee Sui Hong Jerome (“Mr Lee”) be appointed as the new administrator of the Estate of the Deceased and his fees shall be calculated at the rate of HK$4,000 per hour and his employee Assistant Accountant at the rate of HK$1,020 per hour subject to a cap of 1% of the net assets of the Estate of the Deceased (subject to any further order of the court) to be paid out of the Estate of the Deceased;

(5)  Within 3 days from the date hereof, the 1^st defendant do transfer the following funds to Mr Lee as new administrator to hold on trust for and on behalf of the Estate of the Deceased:

(a)  the net proceeds of sale of the Shop being unconditionally stake-held by Messrs Raymond Cheung and Chan, the solicitors of the 1^st and 2^nd defendants, in the sum of HK$16,201,185.00; and

(b)  the balance of all net assets of the Estate of the Deceased other than (a) above, if any, including items 2 to 31 of the Schedule annexed to the Originating Summons filed on 24 May 2019, held on trust by the 1^st defendant as the administrator for the Estate of the Deceased.”

2.  There are 3 applications before the court, the 1^st defendant’s summons dated 7 July 2021 for a variation of the Order (the “Variation Application”); the 1^st defendant’s summons dated 16 July 2021 for a Stay of Execution of the Order (the “Stay Application”); and the plaintiff’s summons dated 10 November 2021 for a variation of the sum held by the new administrator to take account of a distribution of HK$3 million out of the Estate agreed since the date of the Judgment (the “Plaintiff’s Application”).

3.  As regard the Stay Application, the 1^st defendant says that he is unable to come to Hong Kong to carry out the tasks required of him under the Order because the PRC government has imposed a ban on the issuance of return permits to Chinese residents to visit Hong Kong (see paragraph 8 of the 1^st defendant’s Skeleton Submissions).

4.  I do not regard this as a good reason for ordering a stay of execution of the Judgment.

5.  There is no appeal against the Judgment.  The Stay Application is said to be made pursuant to Order 45, rule 11 of the Rules of the High Court, Cap 4A and the Inherent Jurisdiction of the Court.

6.  Clearly, the matters now relied on by the 1^st defendant was already in existence before the date of the Judgment.  Indeed, in another Skeleton Submissions of the 1^st defendant dated 9 September 2020 in support of an earlier interlocutory application, the 1^st defendant has stated his position that:

“However, unfortunately, due to the prevalence of Covid-19 virus in China since January 2020, D1 could not get travel permission out of China since January 2020. The validity of the travel document (自由行來往香港通行證) that D1 relied on to travel to Hong Kong was even subsequently nation-wide stayed by the Chinese Government due to the Covid-19 pandemic in both Hong Kong and China up to present until further notice.”

7.  It is clearly not a matter arising since the date of the Judgment.

8.  In applying for relief under Order 45, rule 11 of the Rules of the High Court for a stay of execution, the application can only be made on the ground of matters which had occurred since the date of a judgment or order.  If the grounds existed prior to the judgment or order, a stay would be refused (see Daiwa Bank Limited v Shum Shek Chiu and Anor [2005] 1 HKC 243 at 249B-C).

9.  The 1^st defendant further relies on the Dicta of Ma CJHC (as he then was) in Credit Lyonnais v SK Global Hong Kong Limited [2003] 4 HKC 104 at paragraphs 2 and 3 that:

“...the court retains an inherent jurisdiction, in suitable cases, to make orders staying execution quite apart from those situations expressly permitted under the Rules of the High Court (namely, RHC O 45, r 11, O 47, r 1 and O 59, r13). By the term ‘suitable cases’ are meant those situations in which the inherent jurisdiction of the court is required to be exercised so as to avoid injustice, prevent abuse, preserve the dignity of the court or to facilitate the administration of justice…”

10.  However, Ma CJHC made clear that he accepted the point made by Rogers VP that the inherent jurisdiction must not expressly conflict with rules of court.  And in my view, to allow the 1^st defendant’s Stay Application to rely on matters which occurred before the Judgment would be such a case.

11.  Further and in any event, during the course of submission by Mr Yau on behalf of the 1^st defendant, I have gone through the list of matters which has to be done by the 1^st defendant in compliance with the Order, to see which of those genuinely required the personal attendance of the 1^st defendant in Hong Kong.

12.  The preparation of an account of the Estate can be done through solicitors in Hong Kong and would not require personal attendance of the 1^st defendant. Indeed, as noted in paragraph 3 of the Judgment, Mr Benjamin Chain, counsel for the defendants at the trial, indicated no objection to an order being made in terms of paragraphs 1 and 2 of the Order.

13.  Paragraphs 3 and 4 of the Order require no participation of the 1^st defendant.

14.  As to paragraph 5(a), the sum of HK$16 million odd is now stake-held by the solicitors of the 1^st and 2^nd defendants.  Mr Yau accepts that that sum can be paid out to the new administrator pursuant to the Order without participation of the 1^st defendant.

15.  As to paragraph 5(b), the items mentioned therein are now kept in a safe deposit box maintained with the Bank of East Asia.  No attempt has been made to the Bank of East Asia to retrieve these items based on written instructions given by the 1^st defendant through his solicitors.

16.  In short, I am not satisfied that the 1^st defendant has made all genuine attempts to comply with the Order, before coming to the Court to seek a stay of execution without an appeal against the Order.

17.  As to the 1^st defendant’s Variation Application, it is for, inter alia, an order that the sum of HK$16 million odd should be stake-held by the plaintiff’s solicitors, instead of the new administrator, Mr Lee.

18.  In this regard, the defendants claim that the arrangement of Mr Lee as the new administrator had not been gone so far in the mind of their handling solicitors at the material time but only after Judgment.

19.  In fact, as pointed out by the plaintiff, one of the main issues at trial was the appointment of a new administrator with consequential directions.  However, the defendants have never raised any issue at all whether Mr Lee’s professional insurance as a certified public accountant covered work as a trustee.  On the other hand, the defendants have at trial counter-proposed Mr Sam Fu as the new administrator.

20.  Since the commencement of these proceedings, the defendants have been legally represented and Mr Benjamin Chain, appeared on their behalf for the hearing.  I agree that it is impossible that the appointment/arrangement of Mr Lee as the new administrator had not gone through the minds of the defendants’ experienced legal team.  In any event, there is no appeal against the Order and there is no basis to have that question revisited again at this stage.

21.  For the reasons set out above, the Stay Application and the Variation Application are dismissed.

22.  As to the Plaintiff’s Application, parties agree that paragraph 1 thereof is not necessary if I dismiss the Stay Application.  Also, parties agree that an order should be made in terms of paragraph 2 of the Plaintiff’s Application with the figure changed to HK$13,074,645 to reflect certain property tax paid on behalf of the Estate.

23.  Accordingly, I order as follows:

(1)            The 1^st defendant’s Summonses dated respectively 7 July 2021 and 16 July 2021 be dismissed.

(2)            Order in terms of paragraph 2 of the plaintiff’s Summons dated 10 November 2021, save that the figure should be changed to HK$13,074,645.

(Discussion re costs)

24.  I see no reason why costs should not follow the event.  In the Judgment, I have made an order nisi that the defendants do pay costs personally, and there has not been any application to vary that order.

25.  For the same reason, I think the 1^st defendant should bear the costs of the Stay Application and the Variation Application.  Further, I think that the 1^st defendant should pay costs on an indemnity basis.  It is appropriate to do so because the 1^st defendant’s applications are completely lacking in merits.

26.  I order that the 1^st defendant do personally pay the plaintiff his costs of and occasioned by the Stay Application and the Variation Application, including all costs reserved, on an indemnity basis to be taxed, if not agreed.

27.  The defendants do personally bear their own costs of and incidental to the Stay Application and the Variation Application, and such costs are not to be borne by the Estate of the Deceased.

28.  I make no order as to the costs of the Plaintiff’s Application.  The outcome of that application was reached by agreement of the parties at the hearing.