HARVEY SIN WAI LEE v. The Estate of LEE (LI) SING HON (李醒漢) alias LEE (LI) SING HON(李星漢) alias LEE DO JIM (李道沾), deceased AND ANOTHER

HCAP 4/2000

[2021] HKCFI 615

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO 4 OF 2000

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D E C I S I O N

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1.  By a summons dated 23 September 2020 (“the Summons”), the plaintiff (“P”) seeks the following reliefs as a result of the judgment dated 16 September 2005 (“the Judgment”) handed down by A Cheung J (as he then was) (“the trial judge”) in HCA 1348/2000 and HCAP 4/2000:

(1)  Revocation of the grant of the letters of administration dated 26 June 1998 (“the Grant”) granted to CS Lee, as the sole administrator of the estate (“the Estate”) of SH Lee, deceased (“the Deceased”);

(2)  A declaration that CS Lee was not the adopted son of the Deceased;

(3)  Directions for distribution of the Estate and the recovery of the Guangzhou property;

(4)  Payment out of the security for costs paid into court by P (“the Payment Out Application”); and

(5)  Costs of the action (including the costs of the Summons).

2.  The Summons is opposed by the 2^nd defendant (“D2”).  Save and except costs of the Summons, the 1^st defendant (“D1”) has adopted a neutral stance.

3.  In view of D2’s opposition, P has decided not to pursue his application for directions for distribution of the Estate and the recovery of the Guangzhou Property as set out in the Summons.  P’s latest position is that he would deal with the distribution of the Estate in other proceedings at a later time.  Accordingly, it would not be necessary for me to resolve that application in this decision.

4.  This decision should be read together with the Judgment.  The facts and the findings of the court have been clearly set out in the Judgment, and I would not repeat the same herein.  For ease of reference, unless otherwise indicated, abbreviations used in the Judgment are adopted herein.

Revocation of the Grant

5.  As recorded in [2] of the Judgment, several weeks after the conclusion of the trial but before the handing down of the Judgment, CS Lee passed away.

6.  In the Judgment, the trial judge made a factual finding that CS Lee was not the adopted son of the Deceased (“the adopted son issue”).

7.  In the Judgment, the trial judge said:

“6. C S Lee was the administrator of the estate of the deceased pursuant to letters of administration granted to him in 1998. However, C S Lee did not obtain the grant by virtue of his status as a nephew of the deceased. Rather he obtained it on the basis that he was the adopted son of the deceased.

……

160. Turning to the probate action, having concluded that C S Lee was not the adopted son of the deceased as claimed, the grant of letters of administration in his favour based on the sole premise that he was the adopted son is prima facie liable to be revoked pursuant to section 32(1) of the Probate and Administration Ordinance (Cap. 10) – this is so even though the grantee is dead and the grant has therefore ceased: Tristram and Coote’s Probate Practice (29th ed.) paras. 17.11(m) and 17.37. It is not necessary to make a finding of fraud against C S Lee: see Williams, Mortimer and Sunnucks, op. cit., 371 and the cases cited in note 33.” (Emphasis added)

8.  Mr Andrew Tse, counsel for P, submits that the Grant ought to be revoked as a result of the factual finding made by the learned judgment.  Mr Tse submits:

(1)  Upon death of a grantee, the grant would have ceased. However, the Grant is issued by the court in exercise of its jurisdiction. There is no reason why the court should not correct such an error and revoke the Grant to avoid any possible complications. This is especially so when there is no prejudice to CS Lee or his estate if the Grant is to be revoked.

(2)  So long as letters of administration remain in force, they are conclusive evidence that the administrator to whom as next-of-kin a grant is made is in fact such next-of-kin.  The conclusiveness of a grant is subject to the grant remaining unrevoked[1].

(3)  Even assuming that CS Lee survived the judgment, the Grant would nonetheless be revoked.  If P is not a suitable candidate given the serious conflict between the families, the same would also apply to CS Lee.

(4)  Death of the grantee, is no bar to revocation of a grant[2].

(5)  A finding of fraud is not necessary[3].

9.  Mr Tommy Lo, counsel for D2, submits that notwithstanding the finding that CS Lee was not the adopted son of the Deceased, the Grant should not be revoked.  Mr Lo argues that:

(1)  CS Lee genuinely believed that he was an adopted son of the Deceased.

(2)  The Grant was put to good use for the benefit of the Estate.  Based upon the Grant, CS Lee commenced the High Court action against Madam Wong.  The claim in the High Court action was meritorious and was upheld by the trial judge.

(3)  No finding of fraud against CS Lee was made[4].

(4)  CS Lee was entitled to a grant of the letters of administration concerning the Estate by virtue of the fact that CS Lee being a nephew of the Deceased (“the nephew status”).  In other words, CS Lee was entitled to have a grant in any event.

(5)  The Grant issued to CS Lee did not state that it was issued to him in his capacity as an adopted son of the Deceased.

(6)  There would not be any prejudice to the Estate if the Grant is not revoked.  Since CS Lee has passed away, the Grant would not be used further.

10.  With respect, I am in agreement with Mr Tse, and I am unable to accept Mr Lo’s submissions.

(1)  In considering what order should be made, everything must be based upon the findings made by the trial judge in the Judgment.  The parties cannot travel beyond the judgment.

(2)  As clearly set out in [6] of the Judgment, “CS Lee did not obtain the grant by virtue of his status as a nephew of the deceased.  Rather he obtained it on the basis that he was the adopted son of the deceased.”  Further, as recorded in [160] of the Judgment, “the sole premise” of the Grant was CS Lee being the adopted son of the Deceased.

(3)  Whether CS Lee would be entitled to have a grant of the letters of administration concerning the Estate by relying upon the nephew status, and whether CS Lee should be allowed to amend the Grant by relying upon his nephew status to uphold the Grant, are matters which have not been raised in the trial.  In my view, D2 should not be allowed to introduce these issues after the conclusion of the trial, for this would offend the principle of res judicata in the wider sense as set out in Henderson v Henderson[5].

(4)  Mr Lo submits that the trial judge has expressly allowed D2 to make submissions on whether the Grant should be revoked, notwithstanding the finding that CS Lee was not the adopted son of the Deceased.  Counsel says that the trial judge has given leave to allow D2 to try to uphold the Grant by relying upon any other grounds, including the nephew status.  With respect, this submission must be rejected.  As rightly pointed out by Mr Tse, the fact that the trial judge allowed D2 to make further submissions is only due to the death of CS Lee after the trial but before the handing down of the Judgment.  The trial judge has not allowed D2 to try to uphold the Grant by relying upon any other grounds.  This has been made clear in [165] of the Judgment, in which the trial judge said: 

“165. Of course, the Court has a discretion whether to revoke the grant. It would not be fair to decide the question of discretion and revocation (in the context that the grantee has died) without affording the estate of C S Lee an opportunity to be heard, as the matter arose out of the untimely death of C S Lee after trial and the parties never addressed the Court on discretion and revocation in the context of the grantee having died.” (Emphasis added)

(5)  The Grant was made on the sole premise that CS Lee was the adopted son of the Deceased.  As a result of the Judgment, this sole premise is gone.  In these circumstances, I do not see any reason why the Grant should not be revoked.  As submitted by Mr Tse, letters of administration are conclusive evidence that the administrator to whom as next-of-kin a grant is made is in fact such next-of-kin.  For the purpose of truly reflecting the Judgment made by the court, the Grant ought to be revoked.

(6)  For the purpose of revoking the Grant, a finding of fraud or misconduct committed by CS Lee is not necessary.

(7)  The fact that the High Court action was properly commenced by CS Lee based upon the Grant cannot be a reason against the revocation of the Grant. The court has given proper reliefs in the High Court action, and justice is done.  In the probate action, while the Grant is standing on a sole factual premise (ie CS Lee being the adopted son of the Deceased) which in fact does not exist, there is no reason not to revoke the Grant. 

11.  I would order that the Grant be revoked.

Declaring that CS Lee was not the adopted son of the Deceased

12.  In the Judgment, the trial judge said:

“166. I would also defer the question of whether to grant a declaration, on top of the finding that I have made in this judgment, that CS Lee was not an adopted son of the deceased, until an opportunity has been given to CS Lee’s estate to address me on the matter, as CS Lee’s death, the cessation of the grant following his death, and whether the Court would revoke the grant nonetheless, might have a bearing on whether the Court should grant the discretionary relief in question.”

13.  For the reasons set out in the above, I have determined that the Grant ought to be revoked.

14.  Mr Tse submits that there should be a declaration that CS Lee was not the adopted son of the Deceased (“the Declaration”).  Mr Tse submits:

(1)  The Declaration, if made, is one which is made after trial and after proper arguments.

(2)  The Declaration would serve a useful purpose in that D1 and D2 would be bound by the Declaration when considering the issue of distribution.  CS Lee’s successor(s) would not be allowed to re-litigate over whether CS Lee was the adopted son of the Deceased in subsequent proceedings.

15.  Mr Lo submits that the Declaration should not be made.  Mr Lo submits that:

(1)  Matters concerning distribution ought to be left for adjudication by the court when exercising its jurisdiction as a court of distribution.

(2)  Who and what share each potential beneficiary for distribution is to receive will be a subject-matter for the administrator once he is able to obtain a grant de bonis non after disposal of this probate action.

(3)  It is not necessary to grant the Declaration for the disposal of this probate action.  The Declaration would in any event not bind a court of distribution when interested parties subsequently go before it to deal with distribution issues.

16.  Mr Lo further submits that P commenced the probate action with an improper motive, and this should be a reason for refusing the Declaration sought by P.  Mr Lo refers me to [170] of the Judgment, in which the trial judge said:

“170.  I do not think Harvey Lee is an appropriate choice. He has obviously sided with his mother in the two actions, and I think there is much force in Mr Lo’s submission that the probate action was brought for the tactical purpose of thwarting the High Court action, under the (mistaken) belief that if C S Lee could somehow be removed as administrator of the estate, the action brought by C S Lee as administrator of the estate against Madam Wong would be dropped or otherwise disposed of. In any event, given the serious conflicts and disputes amongst the two families, it is simply inappropriate to appoint Harvey Lee as the new administrator.”

17.  In deciding whether a declaration should be granted, the ultimate consideration is whether the declaration would serve any useful purpose[6].

18.  In my view, the Declaration would serve a useful purpose.  Whether CS Lee was the adopted son of the Deceased has been fully argued by the parties and has been determined by the court in the probate action.  The purpose of granting the Declaration is not to bind the court in any subsequent proceedings.  As submitted by Mr Tse, the purpose of having the Declaration is not to allow the parties in the probate action, including CS Lee’s successor(s), to re-litigate over whether CS Lee was the adopted son of the Deceased in subsequent proceedings.

19.  In my view, the Declaration would serve a useful purpose.

20.  As to the motive of P in commencing the probate action, the trial judge has taken this into account and refused to appoint P as the administrator of the Estate.  However, there cannot be any doubt that P has succeeded in his challenge, ie CS Lee was not the adopted son of the Deceased and the Grant should be revoked on this ground.  The adopted son issue was the core issue in the probate action, and P succeeded on this issue after a full trial.  In my view, P should not be sent away empty handed notwithstanding this success[7].

21.  I would exercise my discretion in favour of making the Declaration.

Costs of the probate action (excluding costs of the Summons) between P and D2

22.  The principles concerning the exercise of discretion as to costs have been succinctly summarized by Lam VP in YBL v LWC (No 2)[8], in which the learned judge said:

“9.  In our judgment, the proper approach in determining costs is that succinctly put by the Chief Justice in Mimi Kar Kee Hung v Raymond Kin Sang Hung FAMV 10 & 11 of 2014, 7 July 2015 at [7]:

‘ The discretion as to costs in this Court, as in any other Court, is to be exercised in a principled way with a view to reality and justice.’

10.  For present purposes, the relevant principles on the exercise of discretion as to costs can be summarized as follows:

(a)  whilst the courts often start with the proposition of costs following event, it is no longer a general rule but a starting point, see Hung Fung Enterprises v Agricultural Bank of China [2012] 3 HKLRD 683;

(b)  there have to be some justifications for depriving a successful party of his costs;

(c)  in measuring who is the successful party and the extent of his success, the court must examine the reality and justice of the case. Thus, in Hysan Development Co Ltd v Town Planning Board (No 2) (2016) 19 HKCFAR 635, the Court of Final Appeal made no order as to costs notwithstanding the success of the appellants in reversing the Court of Appeal’s decision because they did not achieve the full objects of their appeals;

(d)  in addition, under Order 62 Rule 5, the court in exercising its discretion shall take into account the matters set out in Rule 5(1) as may be appropriate in the circumstances;

(e)  Rule 5(2) highlights some conduct which the court may take into account including whether it is reasonableness for a party to take an issue, the manner in which the matter was pursued or defended, the extent of success, and conduct before, as well as during the proceedings;

(f)  if a successful party has brought the litigation upon himself or has done some wrongful act in the course of the transaction, he could be deprived of his costs.”

23.  Mr Lo submits that P’s motive in commencing the probate action was to thwart the claims against his mother, Madam Wong, in the High Court action.  P failed.  Hence, P should be regarded as a losing litigant.  With respect, I am unable to agree.

(1)  P is not a party in the High Court action.  It is true that Madam Wong lost in the High Court action.  Madam Wong’s failure in the High Court action has been dealt with by an appropriate costs order in the High Court action.

(2)  In the probate action, P succeeded on the adopted son issue in the probate action.  P obtained an order to revoke the Grant and P also obtained the Declaration.  At the same time, P failed to obtain an order to appoint himself as the administrator of the Estate, and he also failed to establish the allegation of fraud against CS Lee.  In my view, the overall picture is that P is the successful party in the probate action, although he has not succeeded on all the issues.

24.  Mr Lo submits that P should be deprived of the costs of the probate action because of the improper motive of P.  Mr Lo refers me to [11] of the Judgment, in which the trial judge said:

“11. Having listened carefully to the evidence and considered the case in some detail, it seems plain to me that the probate action was commenced by Harvey Lee as a means to counter the claim made by CS Lee on behalf of the estate against his mother for the return of the shares.”

25.  The improper motive of P is related to the wrongful acts committed by Madam Wong as found by the court in the High Court action. In respect of those wrongful acts, a judgment (including costs) against Madam Wong has been entered in the High Court action.  Justice has been done.  In my view, to penalize P on costs in the probate action by reason of a matter relating to those wrongful acts would amount to double penalty imposed on P and Madam Wong’s side.  Further, irrespective of P’s motive in commencing the probate action, P’s challenge on the adopted son issue is meritorious and has been upheld by the court.  P’s success in the probate action has to be recognized by an appropriate costs order.

26.  Mr Lo also refers to a letter marked “without prejudice save as to costs” and dated 27 June 2005 from CS Lee’s solicitors to P’s and Madam Wong’s solicitors, in which CS Lee’s side proposed that the Estate be divided between Yat Sun’s family and CS Lee’s family in equal shares, and all the legal proceedings be settled on this basis (“the Offer”).  Mr Lo submits that P has failed to obtain a judgment better than the Offer in the probate action, and hence no costs should be awarded to P in the probate action.  Mr Lo refers me to [168] of the Judgment, in which the trial judge said:

“168. In the circumstances of the present case and based on the expert evidence before me, I see no reason why in the absence of a valid adoption of C S Lee, and upon my rejection of the defence of gift raised by Madam Wong, the estate of the deceased should not be succeeded to by Yat Sun (and his family) and C S Lee (and his family).”

27.  With respect, I am unable to accept Mr Lo’s submissions.

(1)  Issues in dispute are defined by pleadings[9].  Who should be entitled to what shares in the Estate is not an issue in dispute in the probate action.  Accordingly, what the learned judge has said in [168] of the Judgment can only be regarded as obiter.  It is not a ruling on an issue in dispute.

(2)  P’s entitlement in the Estate has never been an issue in the probate action.  Nothing concerning P’s interest in the Estate has been determined in the probate action.

(3)  In the circumstances, it cannot be said that P has not done better than the Offer in the probate action.

28.  Taking into account the success and the failure of P in the probate action, adopting a broad brush approach, I would award 70% of the costs of the probate action (excluding costs of the Summons, but including costs reserved) to P.  Those costs are to be paid by D2 to P, to be taxed if not agreed. 

Costs of the Summons between P and D2

29.  P only indicated that he would not pursue the application as per [3] and [4] of the Summons through Mr Tse’s written submissions dated 4 March 2021.  By then, much time has been spent by D2 on those matters.  In my view, although P has succeeded in obtaining an order to revoke the Grant and in obtaining the Declaration, there should be a substantial discount on costs of the Summons to reflect P’s abandonment of [3] and [4] at a very late stage.

30.  As to the costs of the call-over hearing of the Summons on 4 November 2020, D2 claims that those costs should be borne by P, while P says that those costs should be in the cause of the Summons.

(1)  D2 submits that before the hearing on 4 November 2020, P had pressed for having a final determination of the Summons in that hearing, which was a hearing with 15 minutes reserved only.  P’s attitude was unreasonable and unrealistic.  As a result of P’s attitude, D2 has incurred much costs to prepare for that hearing and has to send legal representatives to attend the hearing.  These costs could have been saved if P had adopted a reasonable attitude.  If the parties could have some reasonable discussion, the parties could jointly propose directions to the court and vacate the hearing. Much costs could have been saved if this course was adopted.

(2)  P1 submits that the hearing on 4 November 2020 could not be vacated because D2 did not clearly indicate their scope of objection before the hearing.  In the circumstances, the hearing on 4 November 2020 became inevitable.

31.  Having perused the correspondence passing between the parties before the hearing on 4 November 2020, in my view, neither P nor D2 has really tried to iron out some proposed directions for the disposal of the Summons.  In my view, the necessity of having a hearing on 4 November 2020 is occasioned by the uncooperative attitudes of both P and D2 in working out some agreed proposed directions before the hearing.  In respect of costs of attending that hearing, P and D2 should respectively bear their own costs. 

32.  For avoidance of doubt, apart from the time spent on attending the hearing on 4 November 2020, all the other preparation done for the purpose of that hearing in fact can be and has been reused in the substantive hearing of the Summons.  The hearing on 4 November 2020 is a short hearing.

33.  With all the aforesaid in mind, taking a broad brush approach, I would award 60% of the costs of the Summons to P.  There be an order that costs of the Summons (excluding the costs of attending the call-over hearing on 4 November 2020) be paid by D2 to P, to be taxed if not agreed.

Costs of the Summons between P and D1

34.  There is dispute between P and D1 as to the costs of the Summons.  To be more precise, the dispute concern the costs incurred in relation to the call-over hearing on 4 November 2020.

35.  D1 is a neutral party and does not take part in the disputes between P and D2.

36.  Mr Tse submits that, in relation to the costs of the Summons as between P and D1, there should be no order as to costs.

(1)  D1 is a neutral party.  As such, there is no necessity for D1 to incur costs to attend the hearing on 4 November 2020.  D1 can simply write to the court seeking leave to be excused from attendance.

(2)  For reasons unknown, before the determination of the Summons, D1 has attempted to seek costs from P.  In view of this unreasonable stance of D1, the hearing on 4 November 2020 was unable to be vacated.

37.  D1 says that that they have tried to put forward the following proposed directions to P on 7 October 2020:

(1)  the attendance of D1 on 4 November 2020 be dispensed with;

(2)  subject to paragraph (3) below, D1 be bound by whatever Order which may be made by the court out of the Summons;

(3)  without inviting D1 to make submission, P shall not apply for any costs order against D1 under the Summons; and

(4)  costs occasioned and incurred by D1 be paid by the P to D1 forthwith.

38.  D1 says that P did not reply to the proposed directions before the call-over hearing.  As a result, D1 has to prepare an affidavit (“the affidavit”) made by a partner of D1’s solicitors (time spent on the preparation of the affidavit exceeds 8 hours) and has to attend the call-over hearing.

39.  Having considered the respective submissions made by Mr Tse and D1[10], I am in agreement with Mr Tse.  Since D1 is a neutral party, there is in fact no need for D1 to take part in the call-over hearing on 4 November 2020.  It is also not understandable why D1 would seek costs of the Summons against P.  Further, with respect, I am of the view that it would not be necessary for D1 to file the affidavit for the disposal of the Summons.

40.  As to the costs of the Summons between P and D1, there be no order as to costs.

Payment Out Application

41.  Since P is the successful party in the probate action and I have awarded costs to him, the Payment  Out Application should be allowed[11].

Disposition

42.  I order that the Grant be revoked.  I also make the Declaration.  There be leave to P to withdraw the application as per [3] and [4] of the Summons. 

43.  I make the costs orders as set out in the above.  D2’s own costs be taxed in accordance with the Legal Aid Regulations.

44.  I also allow the Payment Out Application.

45.  I thank counsel for the assistance rendered to the court.