FOK PO NAM v. HSBC TRUSTEE (HONG KONG) LTD

HCCA 3844/2017

[2018] HKCFI 1

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CAVEAT NO HCCA 3844 OF 2017

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D E C I S I O N

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INTRODUCTION

1.  The following issues arise for determination under the summons for directions taken out by the Caveator:-

(1)   whether a person must have an interest in the estate of the deceased to justify the entering of a caveat by that person; and

(2)   whether the court should, in any event, give the directions sought by the Caveator in the present case.

BASIC FACTS

2.  Fok Po Tun Ferdinand, deceased (“the Deceased”), a widower, died on 27 December 2016 at the age of 85.  He was survived by a son and a daughter.  He had three brothers, namely, Fok Po Shun (“Po Shun”), Fok Po Nam (“Po Nam”) and Fok Po Kai (“Po Kai”) (hereinafter collectively referred to as “the Fok Brothers”), and a nephew called Thomas (a son of Po Shun).

3.  Prior to his death, the Deceased used to live at Flat B, 14^th Floor, 5 Babington Path, Hong Kong (“the Apartment”), which he purchased in or about 1974.  He gave each of his brothers a set of keys to the Apartment, so that (i) he could come to one or the other of them whenever he locked himself out of the Apartment, and (ii) the domestic helpers employed by Po Shun or Thomas could enter the Apartment to render assistance in relation to his daily living needs and activities.

4.  By a will of the Deceased dated 14 August 2003 (“the Will”), the Deceased appointed HSBC International Trustee Limited (“HSBC International”) as the executor and trustee of the Will.

5.  On 7 July 2017, HSBC Trustee (Hong Kong) Limited (“HSBC Trustee”), as lawful attorney of HSBC International, applied to the Court of First Instance of the High Court for a grant of letters of administration (with the will annexed) of the Estate of the Deceased.

6.  On 28 July 2017, Po Nam (the Caveator) entered a Caveat in the Probate Registry against the sealing of any grant in relation to the Estate of the Deceased without notice to him.

7.  On 19 September 2017, HSBC Trustee (the Person Warning) issued a Warning to Po Nam requiring him to (i) enter an appearance setting forth what interest he had in the Estate of the Deceased contrary to that of HSBC Trustee, or (ii) issue and serve a summons for directions if he had no contrary interest but wished to show cause against the sealing of a grant to HSBC Trustee.

8.  On 29 September 2017, Po Nam entered an Appearance to Warning, stating that he had no interest contrary to the Person Warning (ie HBSC Trustee) but wished to show cause why letters of administration with the will annexed of the Estate of the Deceased limited to the part of the Estate comprising the Deceased’s residence at the Apartment and the contents therein should not be granted to HSBC Trustee.

9.  On the same date, ie 29 September 2017, Po Nam issued a summons for directions (“the Summons for Directions”).

THE DIRECTIONS SOUGHT BY PO NAM

10.  According to Po Nam, he and his brothers do not, and have no reason to, challenge the Will (see paragraph 5 of Po Nam’s first affidavit filed on 11 October 2017).  It is clear, however, from the stance that he has adopted in these proceedings that he does not admit the Will to be the last will of the Deceased.  Pausing here, I should mention that Po Nam has not produced any subsequent (or, for that matter, prior) will made by the Deceased.  Neither is there any evidence before the court of the existence of any other will of the Deceased.  In any event, the issue of whether the Will is the last will of the Deceased is not an issue which requires determination in the present application.

11.  Significantly, Po Nam does not claim to have any interest in the Estate of the Deceased.   In his own words:-

“None of us [ie the Fok Brothers] expect to be a beneficiary of the Deceased’s estate. Nor have we any claim against the estate, other than a claim by Po Shun for reimbursement of expenses relating to (a) the Deceased’s funeral and (b) the Apartment.”

12.  According to Po Nam, his “interests” in relation to the Estate of the Deceased, or its administration, lie in two matters:-

(1)   He does not wish to hold on to the keys to the Apartment and is eager to hand them over to whoever is the lawful personal representative of the Deceased.  He believes it to be his duty as “gratuitous bailee” and/or “constructive trustee” of the Apartment to hand over those keys, in accordance with the law and in a manner sufficient to safeguard and preserve such assets of the Estate as are inside the Apartment, and is concerned to ensure that he does not incur any criminal or civil liability in relation to the Apartment or its contents (see paragraph 6 of Po Nam’s first affidavit).

(2)   The Deceased had a valuable stamp collection, and at least “some of his stamps had at some point in time been kept in the Apartment”.  He is unable to say whether the entirety of the Deceased’s stamp collection was in the Apartment at the time of his death, or the value of such stamps as were so located. Nevertheless, he wishes to draw the lawful personal representative’s attention to the “likely existence of some rare stamps whose true value, due to their miniature size, featherweight and unattractive looks, could easily be overlooked, underestimated, mislaid or even misappropriated” (see paragraphs 20 and 21 of Po Nam’s first affidavit).

13.  In the Summons for Directions, Po Nam seeks the following directions:-

(1)   letters of administration with the will annexed of the Estate of the Deceased should not be granted to HSBC Trustee, unless it compiled with the Warning Notice in Probate Form N4.1 and Section 60J of the Probate and Administration Ordinance, Cap10 (“the PAO”) limited to the Deceased’s residence at the Apartment and its contents therein; and

(2)   in the event HSBC Trustee fails to take an inventory of the contents in the Apartment in compliance with the aforesaid Warning Notice and Section 60J and in the manner as per the Schedule attached to the summons within 7 days, letters of administration with the will annexed limited to the Apartment and its contents therein be granted to such fit and proper person as the court deems fit.

14.  The “Schedule for Taking Inventory” annexed to the Summons for Directions sets out a list of 9 proposed directions, as follows:-

“1. The person warning (‘PW’) shall within seven days produce to the Caveator a full copy of the Will without redaction.

2. PW shall within seven days produce to the Caveator, sufficient proof, that the Executor named in the Will is legally competent to act as executor and trustee in Hong Kong notwithstanding the Executor so named has ceased maintaining a business address in Hong Kong since 2009 and its name is not in the Register of Trustee Companies in Companies Registry of Hong Kong.

3. PW shall, after complying with 1 and 2 above, agree and fix with the Caveator a mutually convenient time and date for inspection of the apartment of the Deceased (‘Inspection’) – namely, Flat B, 14^th Floor, 5 Babington Path, Hong Kong, deceased (‘the Apartment’) – and for taking an inventory of the contents of the Apartment (‘Inventory’), in the presence of the Caveator and/or his representative to ascertain whether the Deceased had left any other Will or testamentary instruments and/or details of the Deceased’s assets in the Apartment.

4. PW shall, so soon as practicable, request for and procure the return to the Caveator by the daughter of the Deceased – namely, NG Kah Yee Brenda (‘the Daughter’) – all items which the Daughter removed from the Apartment on or shortly after the Deceased’s date of death (that is to say, 27 December 2016), including but not limited to a stack of papers and a notebook bearing or containing the Deceased’s handwriting; and PW shall include all such items in the inventory.

5. Not more than 2 representatives with written authorization from PW shall be allowed entry to the Apartment on the appointed day for the Inspection and taking of Inventory.

6. A philatelic expert be appointed, by agreement between PW and the Caveator: to attend the Apartment on the appointed day for the Inspection and taking of Inventory; to assist in the Inspection, and in itemizing and listing out of the philatelic collection belonging to the Deceased for inclusion in the Inventory; and to prepare a written valuation of the said philatelic collection of the Deceased.

7. The Inventory, when completed, shall be signed by the representatives of PW attending the Inspection and countersigned by the Caveator, and a copy of the Inventory so signed and countersigned by given to the Caveator.

8. PW shall include the Inventory so taken and signed and countersigned in its application for grant of probate, annexing the Inventory to the grant.

9. At and after the taking of Inventory, PW shall make and provide arrangements, satisfactory to the Caveator and at the cost of the Deceased’s estate, to safeguard and preserve the Apartment andall asses therein, including but not limited to the taking out of appropriate and adequate insurance.”

15.  HSBC Trustee opposes the directions sought by Po Nam on two broad grounds:-

(1)   Po Nam has no interest in the Estate of the Deceased and does not have any locus standi to interfere with HSBC Trustee’s application for a grant of representation in relation to the Estate of the Deceased; and

(2)   in any event, the directions sought by Po Nam do not concern any genuine probate issues.

PO NAM DOES NOT HAVE SUFFICIENT INTEREST TO ENTER THE CAVEAT

16.  On behalf of HSBC Trustee, Mr Ken To submits that a person must “have or assert an interest” in the estate of the deceased to justify the entering of a caveat.  Otherwise, says Mr To, a person who has no interest in the estate of the deceased would be able not only to file a caveat and enter an appearance, but also take out a summons for directions and compel the putative personal representative(s) of the deceased to entertain his demands before the court (see paragraphs 12 and 17 of the Skeleton Submissions of the Person Warning dated 12 December 2017.

17.  On the other hand, Mr Denis Gordon Yu, on behalf of Po Nam, submits that Rule 44(1) of the Non-Contentious Probate Rules, Cap 10A (“the NCPR”), does not define the “interest” necessary or sufficient for a person to enter a caveat.  He does not accept that a person must have an interest in the estate of the deceased to justify the entering of a caveat, but has not offered any view on what interest would be necessary or sufficient for this purpose.

18.  Neither party has referred me to any case authorities bearing on this issue, but Mr To has drawn my attention to some textbook passages which I shall refer to later in this decision.  In my view, the question of what interest a person must have in order to justify the entering of a caveat by that person should be approached from a consideration of the purposes and effect of a caveat.  In this regard, the proper starting point must be the statutory scheme under the PAO and NCPR governing the entry and disposition of caveats.

19.  Section 45 of the PAO states that:-

“A caveat against a grant of probate or administration may be entered in the Registry.”

20.  Rule 44 of the NCPR, so far as relevant, provides as follows:-

“(1) Any person who wishes to ensure that no grant is sealed without notice to himself may enter a caveat in the Registry.

(4) Except as otherwise provided by this rule, a caveat shall remain in force for 6 months from the date on which it is entered and shall then cease to have effect, without prejudice to the entry of a further caveat or caveats.

(5) The Registrar shall maintain an index of caveats entered in the Registry and on receiving an application for a grant, he shall cause the index to be searched.

(6) The Registrar shall again cause the index to be searched before he shall allow any grant to be sealed and shall not allow any grant to be sealed if there is an effective caveat in respect thereof:

Provided that no caveat shall operate to prevent the sealing of a grant on the day on which the caveat is entered.

(7) A caveat may be warned by the issue from the Registry of a warning in the specified form at the instance of any person interested (in this rule called "the person warning") which shall state his interest and, if he claims under a will, the date of the will, and shall require the caveator to give particulars of any contrary interest which he may have in the estate of the deceased; and every warning shall be served on the caveator.

(9) A caveator having an interest contrary to that of the person warning may, within 8 days of service of the warning upon him inclusive of the day of such service, or at any time thereafter if no affidavit has been filed under paragraph (11) of this rule, enter an appearance in the Registry by filing an appropriate specified form…

(10) A caveator having no interest contrary to that of the person warning but wishing to show cause against the sealing of a grant to that person may, within 8 days of service of the warning upon him inclusive of the day of such service, or at any time thereafter if no affidavit has been filed under paragraph (11) of this rule, enter an appearance to the warning and issue and serve a summons for directions, which shall be returnable before the Registrar.

(11) If the time limited for appearance has expired and the caveator has not entered an appearance, the person warning may file in the Registry an affidavit showing that the warning was duly served and that he has not received a summons for directions under the last foregoing paragraph, and thereupon the caveat shall cease to have effect.

(12) Unless the Registrar otherwise directs-

(b) any caveat in respect of which an appearance to a warning has been entered shall remain in force until the commencement of a probate action”.

21.  From the above provisions, it is can be seen that:-

(1)   The effect of entering a caveat is that no grant relating to the estate of the deceased can be sealed without notice to the caveator.

(2)   The provisions in sub-rules (5) and (6) ensure that no grant would be sealed by the Registrar where there is an effective caveat in force in relation to the estate of that deceased.

(3)   By issuing a warning, the person warning can compel the caveator to state whether he has any contrary interest “in the estate of the deceased” (sub-rule (7)).

(4)   The caveator, if he has a contrary interest, is then required to enter an appearance by filing an appropriate specified form.  Pausing here, it may be noted that the specified form, namely, Form No.C1.4, requires him to set out “the interest of the caveator, stating the date of the Will, if any, under which such interest arises”.

(5)   On the other hand, if the caveator has no contrary interest but wishes to show cause against the sealing of a grant to the person warning, he is required to issue and serve a summons for directions returnable before the Registrar.

22.  In so far as the purposes of entering a caveat are concerned, in Tristram and Coote’s Probate Practice, at paragraph 23.05, the following is stated:-

“The following are some of the purposes for which a caveat may be entered:

(a) to give time to the caveator (objector) to make enquiries and to obtain such information as may enable him to determine whether or not there are grounds for opposing the grant;

(b) to give any person interested in the estate an opportunity of bringing any question arising in respect of the grant before the court on summons; and

(c) as a step preliminary to a probate claim, or to the issuing of a citation (notification).”

23.  Although the purposes mentioned in the above passage are not exhaustive, it is nevertheless instructive to note they relate to matters such as whether a grant of representation of the estate of the deceased should be made, to whom the grant should be made, and possibly the terms of the grant.  Generally, these are matters which a person having some interest in the estate of the deceased may legitimately be concerned with, but not someone who has no interest in the estate.

24.  It is clear from Rule 44(7) that the legislature envisages that both the person warning and the caveator having a contrary interest would have some interest “in the estate of the deceased”.  As earlier mentioned, if the caveator has, or asserts, an interest contrary to that of the person warning, he is required, under sub-rule (9), to enter an appearance in the Probate Registry by filing Form No.C1.4 (being the relevant specified form), and that form requires him to set out his interest.  Examples of persons who may enter an appearance as having a contrary interest include an executor, legatee or devisee, the personal representative of a legatee or devisee, any other person claiming an interest under a will or codicil, a person claiming to be entitled to share in, or interested in, the estate of the deceased on his intestacy or partial intestacy, or the personal representative of any such person (see Tristram and Coote’s Probate Practice, at paragraphs 23.64 and 23.65).

25.  In my view, the same interest requirement must also be applicable to a caveator who does not have, or assert, any contrary interest to the person warning.  An example would be where both are entitled to a grant in the same degree (see Parry & Kerridge, The Law of Succession, 12^th Ed, at paragraph 19-02(ii)).  At the time of the entry of a caveat, the caveator would not necessarily know whether there will be any person warning.  Neither would the caveator necessarily know, at that time, that he has, or does not have, any interest contrary to that of the person warning.

26.  It cannot, I believe, have been the intention of the legislature that a person who does not have, or assert, any interest in the estate of the deceased should be entitled to be given prior notice of the sealing of a grant in respect of the estate of the deceased, or be entitled to issue a summons for directions so that his demands can be considered or entertained prior to the sealing of the grant, thereby enabling or permitting any busybody to interfere in the process of applying for and obtaining a grant of representation by the proper personal representative of the deceased.

27.  Support for the view that a person must have some interest in the estate of the deceased to justify the entering of a caveat can be found in the standard textbooks on probate law and practice.  In Tristram and Coote’s Probate Practice, at paragraph 23.11, it is stated that “[a] caveat (objection) can be entered by any person having or asserting an interest in the estate of the deceased, either by the party himself or his probate practitioner”.

28.  In Christopher Sherrin, Probate Practice in Hong Kong, 3^rd Ed, at paragraph 5.053, it is stated that “[t]he applicant will have to show an interest in the estate sufficient to justify the caveat.”

29.  In the present case, on his own evidence, Po Nam has no interest in the Estate of the Deceased.  It follows that he has, in my view, no locus standi to enter the Caveat, and his Appearance to Warning should be struck out.  In Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, 20^th Ed, at paragraph 30-09, it is stated that “[i]f a person entering an appearance does not show an interest, the entry of the appearance may be refused or struck out on application by summons of the person warning the caveat.”

30.  In passing, I should mention that Po Nam says that he also represents his two brothers, ie Po Shun and Po Kai.  However, neither of them has entered any caveat.  Further, any order made herein will not be binding on them.  In the circumstances, I consider that the court should only consider the position of Po Nam.  It is not necessary to consider whether Po Shun and Po Kai or either of them have any interest in the Estate of the Deceased.

31.  The above conclusion is sufficient to dispose of the Summons for Directions.  Out of deference to counsel’s careful submissions, I shall briefly consider whether the directions sought by Po Nam are in any event proper directions to be given on the assumption that he has a sufficient interest in the Estate of the Deceased to justify the entering of the Caveat.

PARAGRAPH (1) OF THE SUMMONS FOR DIRECTIONS

32.  By this paragraph, Po Nam seeks an order that letters of administration with the will annexed of the Estate of the Deceased shall not be granted to HSBC Trustee unless it compiled with the Warning Notice in Probate Form N4.1 and Section 60J of the PAO limited to the Deceased’s residence at the Apartment and its contents therein.

33.  The Warning Notice in Probate Form N4.1, being the specified form of the schedule of assets and liabilities of the deceased to be annexed to a grant in respect of his estate, states as follows:

“WARNING

Pursuant to section 60J of the Probate and Administration Ordinance (Cap. 10), all companies, banks, firms and shops and other persons to whom a copy of this schedule may be presented should not deal with any property of the Deceased set out therein.  A person who fails to comply with section 60J commits a criminal offence and is liable to a fine and an additional penalty.”

34.  The Warning Notice reflects the provisions in Section 60J of the PAO relating to “prohibition against intermeddling of estate”.

35.  In the present case, Mr Yu has not suggested that HSBC Trustee has failed to comply, or will not comply, with either the Warning Notice or Section 60J of the PAO.  I do not see on what basis it is contended that HSBC Trustee should not be granted letters of administration with the will annexed of the Estate of the Deceased unless it “complied” with the Warning Notice and Section 60J of the PAO.

PARAGRAPH (2) OF THE SUMMONS FOR DIRECTIONS

36.  By this paragraph, Po Nam seeks an order that in the event HSBC Trustee fails to take an inventory of the contents in the Apartment in compliance with the Warning Notice and Section 60J of the PAO and in the manner as per the Schedule for Taking Inventory within 7 days, letters of administration with the will annexed limited to the Apartment and its contents therein be granted to such fit and proper person as the Court deems fit.

37.  The Schedule for Taking Inventory sets out a list of 9 proposed directions.

38.  Paragraph 1 of the Schedule requires HSBC Trustee to provide to Po Nam a full copy of the Will without redaction within 7 days.  I am unable to see any legal basis which would entitle Po Nam to be given a full copy of the Will without redaction prior to the issue of a grant of letters of administration with the will annexed of the Estate of the Deceased to HSBC Trustee.

39.  Paragraph 2 of the Schedule requires HSBC to produce to Po Nam “sufficient” proof that HSBC International was legally competent to act as executor and trustee in Hong Kong notwithstanding that it has ceased to maintain a business address in Hong Kong since 2009 and its name is not on the Register of Trustee Companies in the Companies Registry of Hong Kong.  In my view, the competence of HSBC International to act as executor and trustee in Hong Kong is a matter which it has to satisfy the court before it issues a grant. I do not see, however, that HSBC International is under any duty to satisfy Po Nam of that matter.

40.  Paragraph 3 of the Schedule requires HSBC to agree and fix with Po Nam a mutually convenient time and date for the inspection of the Apartment and for taking an inventory of the contents of the Apartment in the presence of Po Nam and/or his representative to ascertain whether the Deceased had left any other will or testamentary instruments and/or the details of the Deceased’s assets in the Apartment.

(1)   I shall deal with the question of inspection of the Apartment and the taking of an inventory of the assets of the Deceased in paragraphs 41 to 44 below.

(2)   It is, of course, the duty of an executor or administrator (with the will annexed), or putative executor or administrator (with the will annexed), to bring to the attention of the court the existence of any subsequent will made by the deceased.  However, there is no evidence of any will having been made by the Deceased subsequent to the Will.  There is also no basis to believe that HSBC International/HSBC Trustee will not inform the court of the existence of any subsequent will of the Deceased which may come to their attention after a grant has been issued.  In the circumstances, I do not see any basis for Po Nam’s insistence that no letters of administration with the will annexed should be granted to HSBC Trustee unless it has first ascertained, in the presence of Po Nam, whether the Deceased had left any other will or testamentary instruments in the Apartment.

41.  Paragraph 4 of the Schedule requires HSBC Trustee to request or procure the Deceased’s daughter to return items which it is alleged were removed by her from the Apartment on or shortly after the Deceased’s date of death.  In Re Estate of Cheung Hung [2011] 1 HKLRD 455, Johnson Lam J (as he then was) referred to the judgment of Sir Denys Buckley in Re Berger [1990] Ch 118 at 133-134 as containing a “modern statement” of the distinction in the function of the court exercising its probate jurisdiction and one exercising its administration jurisdiction:-

“The function in English law of a probate court is to ascertain and determine what testamentary paper or papers is or are to be regarded as constituting the last will of the testator, and who is entitled to be constituted his legal personal representative… it is important to distinguish between the jurisdiction of a judge … trying a probate action from the jurisdiction of a judge … trying an administration action. The probate jurisdiction extends to the function referred to in the preceding paragraph. A judge exercising that jurisdiction can, of course, receive all evidence and entertain all submissions relevant to the performance of that function. He has, however, no duty to construe any of the instruments sought to be proved except so far as to do so may be necessary for the performance of that function. The probate court has no role to play in the administration of the testator’s estate in accordance with whatever valid testamentary disposition the testator may have made, nor in determining how far his intended dispositions are valid. Once the identity of the deceased’s testamentary papers has been determined and they have been admitted to probate, all questions of construction arising in the administration of the estate concern only the court of administration.”

42.  At paragraph 12 of his judgment, the learned judge further stated as follows: “this court, in the exercise of its probate jurisdiction (and that includes the Probate Registry), should not decide on matter concerning the administration or distribution of the estate.  Those matters should, if necessary, be determined by way of Order 85 administration proceedings.”

43.  In my view, the collection of assets belonging to the estate of the deceased is equally an administration issue for the personal representative who may, if necessary, seek the court’s directions in administration proceedings, and not a probate issue for determination in these proceedings.

44.  Paragraphs 5 to 9 of the Schedule relate to a proposed protocol for the inspection of the Apartment and taking of inventory of the Deceased’s assets in the Apartment, including the appointment of a philatelic expert to assist in the inspection, itemizing, and valuation of the Deceased’s stamp collection, as well as the safeguarding and preservation of the Deceased’s assets.

(1)   There was, I understand, some previous discussion between HSBC Trustee and Po Nam for the former to have access to the Apartment which would have enabled HSBC Trustee to prepare a detailed inventory of the Deceased’s assets in the Apartment.  However, the discussion was not fruitful, for reasons which I do not consider it necessary to go into in this decision.

(2)   As it is, HSBC Trustee has decided to list generally “the Apartment and all contents therein” in the schedule of assets and liabilities of the Deceased to be annexed to the grant (see paragraph 17 of the affirmation of Cheung Yin Yan Sarina filed on 7 November 2017).  While HSBC Trustee will have to satisfy the court that this is a sufficient description of the assets of the Deceased before it issues a grant, I do not see that this is matter which Po Nam is entitled to interfere with.

(3)   Save as aforesaid, the collection of the Deceased’s assets, including the itemizing and valuation of the Deceased’s stamp collection, as well as the safeguarding and preservation of the Deceased’s assets, are administration issues and not probate issues.  As earlier mentioned, they are not to be determined in these proceedings.

45.  Lastly, I should mention that, in so far as Po Nam’s concern is to ensure that he could hand over the keys to the Apartment to whoever is the lawful personal representative of the Deceased without incurring any civil or criminal liability on his part in relation to the Apartment and its contents, it would be in his interest to see that a grant of representation in respect of the Estate of the Deceased be issued by the court as early as possible.  Once a grant has been issued, he can safely hand over the keys to the personal representative acting under such grant.

DISPOSITION

46.  For the foregoing reasons, the Summons for Direction is dismissed, with costs to the Person Warning, to be taxed if not agreed.  I further order that the Caveat entered by the Caveator on 28 July 2017 shall be struck out.

47.  Lastly, it remains for me to thank counsel for their assistance rendered to the court.