WENG JENNY WAI YUM v. WENG WAI CHONG RICHARD AND OTHERS

HCMP 5/2021

[2023] HKCFI 1244

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 5 OF 2021

________________________

________________________

________________________

_______________

D E C I S I O N

_______________

1.  There is before me the Plaintiff’s originating summons dated 4 January 2021 seeking, inter alia, an order for the sale of a property situated at Carson Mansion in Kowloon (“the Property”) at market price. The Plaintiff is the daughter of the late 胡婉清 (“the Deceased”) and the administratrix of the Deceased’s estate. The parties to the proceedings are siblings and are also administrators of the estate.

2.  Pursuant to a deed of family arrangement (“the Deed”) entered in or about 19 July 2018 between the Plaintiff and the Defendants as beneficiaries of the estate.  There is no suggestion by anyone that the Deed is not valid or otherwise binding. The matter which gave rise to the present application is the not uncommon situation where interested parties disagree as to when to sell and what the market price should be.

3.  The Plaintiff seeks relief to give effect to the sale at the proper market price.  The position appears to be that notwithstanding many offers having been made for the Property in the last couple of years, the parties have been unable to agree on the sale price, and there is even a suggestion by one of the parties as to whether or not the Property should in fact be sold or instead perhaps be given to church or charity.

4.  After the Deceased passed in October 1998, the Property was left as part of her estate and was originally dealt with, or purportedly dealt with, under testamentary papers found amongst her possessions.  The purported will gave all the assets to her three sons, namely, all of the Defendants but apparently nothing to the Plaintiff, and no executor was appointed under the said purported will.

5.  In August 2011, the Defendants sought a grant with respect of the purported will and the estate, but that application was withdrawn for reasons which do not matter for the present proceedings.  In about 2017, the Plaintiff then took out an application for letters of administration ad colligenda bona in respect of the estate.  Nevertheless, soon after, it had been agreed that the Plaintiff would withdraw the application for letters of administration, and the parties would collectively administer the estate and divide it amongst themselves equally.

6.  Letters of administration were granted on 4 September 2019, and all of the parties to these proceedings were appointed as administrators.  For reasons which need not be explained for the purpose of the present decision, by result of an incident which arose in the Property, the said Property is considerably less marketable in the sense of it being harder to sell and that the price would be affected by the said incident.  Pursuant to one of the terms of the Deed, the Plaintiff identified two independent valuers for the Property in or about October 2020 at a price slightly above HK$7 million.

7.  A few months prior to those valuations, it would appear that certain offers had been made for the Property at a price slightly higher.  It is fairly clear that by reason of a number of extraneous factors, the price of property in Hong Kong has been fluctuating.  Notwithstanding that the Plaintiff and the 3rd Defendant seemed content with the proposed price as made under the offers, these were rejected by the 1st and 2nd Defendants as being too low.  The 2nd Defendant in particular, in an email dated 29 June 2020, said this:  “I decline HK$8.6 million, low offer, even the house had an issue.”  He then referred to another property for the purpose of reference, suggesting that the price currently being offered for the Property was not high enough.

8.  In August 2020, the 1st Defendant informed the Plaintiff via WeChat that he did not wish to discuss the matter further and apparently mooted the possibility of the Property not being sold but being given to church or charity instead.

9.  By reason of the valuations, the Plaintiff later proposed selling the Property for a sum no less than HK$7.395 million and informed the Defendants of the same on 23 October 2020.  On 24 October 2020, the 3rd Defendant’s wife suggested the 3rd Defendant would be willing to sell the Property for 8.6 million and nothing more has been said by her about whether or not the 3rd Defendant agreed with the said proposal.  On the other hand, on 26 October 2020, the 1st Defendant rejected the said proposal and suggested that it was best to wait until the property market recovered in Hong Kong.  At that stage, nothing had been heard by the Plaintiff from the 2nd Defendant.

10.  The other problem with the Property is that it appears that the title deeds to it have been lost or at least these are not within the Plaintiff’s possession, control, and is not aware of their whereabouts.  It maybe that they are in the possession in one of the Defendants, and this is one of the matter which gives rise to relief currently being sought by the Plaintiff in these proceedings.

11.  Insofar as service on the Defendants is concerned, by the order of the master dated 21 April 2021, leave was granted for these proceedings to be served out of the jurisdiction on the 1st to 3rd Defendants.  Insofar as the 1st Defendant is concerned, whilst the 1st Defendant filed an acknowledgement of service apparently opposing the summons, no affirmation of opposition has been filed to date, and certainly the 1st Defendant has not appeared at these proceedings.  The notice of appointment for the originating summons dated 13 February 2023 and the evidence was served on the 1st Defendant by registered mail and sent to the address provided in his acknowledgement of service.  These were not returned undelivered.

12.  Insofar as the 2nd Defendant is concerned, this was served at his address in the United States of America by a process server.  And the 2nd Defendant was served personally and took delivery of the same on 16 June 2021.

13.  Insofar as the 3rd Defendant is concerned, service is deemed to have been duly served on the 3rd Defendant by virtue of the order of Master Hui dated 5 October 2022.

14.  Mr Tony Ko, who appeared for the Plaintiff, helpfully drew my attention to a number of legal principles which I believe to be trite.  One, as beneficiaries of an estate, beneficiaries are entitled to enter into a deed amongst themselves and agree to vary the testamentary dispositions made by a deceased. Provided all of the beneficiaries have consented, the court can give effect to such an agreement.  See, for example: Re Estate of Lee Da Kor [2010] 1 HKLRD 415 at paragraph 29 where Jeremy Poon J (as the Chief Judge of the High Court then was) held:

“At the time of the Deed, the plaintiff and the other defendants had no interest in Mr Lee’s estate because it was yet to be ascertained. But they had right to have the estate properly administered and applied for their benefit when the administration was complete. That right is a chose in action, which is transmissible. As a matter of law, the plaintiff and the other defendants, as beneficiaries, are perfectly entitled to enter into the Deed to vary the dispositions. The Deed is effected as soon as it is communicated to the personal representatives who become bound by the same.”

15.  Two, while the general rule is that administrators must act jointly, in the event of a deadlock, an administrator can apply to the Court to break the deadlock:  See Order 85, rule 2 of the Rules of the High Court, and Hong Kong Civil Procedure 2023, paragraph 85-2-11, where it is stated that the court has jurisdiction to make an order to direct an administrator to do or abstain from doing a particular act which includes directing an administrator to dispose of a property belonging to an estate, and that power extends to when and how a sale is to be effected.

16.  Three, Re The Estate of Li Sing Kui, (unreported, judgment dated 26 April 2019, per B Chu J at paragraph 14), her Ladyship accepted counsel’s submission that:

“...this court has power to direct the executors/administrators/trustee to sell the property belonging to a deceased’s estate under Order 85 rule 2 and further the court has power to direct how the sale is to be effected. For example, if the property is subject to encumbrances, the court may give directions as to whether the property is to be sold free of encumbrances or subject to the existing encumbrances. If there are occupiers in the property, then the court may have to give direction as to whether the property is to be sold with or without vacant possession.”

17.  Four, it is incumbent on administrators seeking the guidance from the Court to provide it with all the necessary information so as to be able to decide what is in the best interests of the estate as a whole.  

DISCUSSION

18.  It seems to me that the dispute which gave rise to the present proceeding is one which is quite common in Hong Kong and arises in a large number of contexts where different people take opposing views as to whether a property should be sold or not, when it should be sold, what is the best price, and so forth.  These decisions, depend on an analysis which to some extent depend on one’s views as to what the macro and microeconomics to be.  All the Court is concerned with and can deal with is the market price as determined by what a willing buyer and a willing seller would buy and sell under normal circumstances.

19.  Having regard to the valuation reports which have been exhibited to the evidence filed by the Plaintiff, it would appear that the price at which the Property is proposed to be sold reflects the current market value.  If one or more of the Defendants believes the market price is “too low”, it is entirely up to that party to make an offer for the Property.  It is not entitled to tie up or prevent the sale of the Property because of his or her own personal view as to the trend of the property market.

20.  Although the Defendants have not filed evidence to oppose these proceedings, I have considered the matters which have been said to be raised by them earlier and exhibited in the Plaintiff’s affirmation.  Having regard for the best interest of the estate and on the evidence before me, I will make an order in terms of the draft order submitted, which I will append to this decision.

21.  As explained above, the remaining matter is that it would appear that the title deeds cannot currently be found.  It may well be that they are within the possession of the Defendants, but that may not be the case.  In any event, if they have them, it would be in their interests to produce the title deeds to the Plaintiff.  If that can be done, a higher price can be fetched.  If not, it will simply fetch a lower price.  I will therefore make an order that the 1st to 3rd Defendants also make a statutory declaration as to whether or not the title deeds to the Property are within their possession, control, or custody in the form of the draft order submitted to me.

22.  Insofar as costs of these proceedings and costs of the sale are concerned, I agree with Mr Ko it is appropriate that these be paid out of the Deceased’s estate.  For the avoidance of doubt, I will also grant liberty to apply.  Once the order is sealed and the written reasons have been produced, the plaintiff should also send a copy of the same to the 1st to 3rd Defendants.