IP PING YEE FORMERLY KNOWN AS IP CHUN MUI v. WONG KWONG SIN BENJAMIN

HCMP 915/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 915 OF 2014

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D E C I S I O N

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Introduction

1. This is an administration action.  There are 3 applications before this court.

2. By the originating summons, the plaintiff sought, inter alia, a declaration that the grant issued by this court under HCAG 8512/1996 was a limited one and as such, a further letters of administration regarding the remaining estate should be issued to her.

3. In the middle of the proceedings, the plaintiff sought to join a further defendant and asked for more reliefs.  The summons was adjourned to be dealt with together with the originating summons.

4. About 2 weeks before the hearing, the defendant took out a summons seeking leave to rely on further affidavit evidence.  I allowed it partly and adjourned the affirmation of Hou Tung (侯東) to be dealt with when the originating summons was heard.

Background

5. On 14 March 1996, the Deceased died testate, leaving a will dated 13 October 1993.  By the will, he appointed the defendant as the sole executor and devised the land known as Lot No 2594 in DD No 76 (“the land”) to him.  The defendant later lodged HCAG 8512/1996 applying for probate and it was later issued to him on 10 December 1996.

6. About fifteen years later, in 2011, the defendant applied to the Estate Duty Office to include 3 more landed properties (collectively called “the residuary estate”) to the estate.  Subsequently, in early 2012, the probate was amended accordingly.  The 3 properties are:

(a)   Lot No. 2014 in D.D. no.76 (“the 1st property”),

(b)   Half share in Remaining Portion of Section A of Lot No. 2101 in D.D. 76 (“the 2^nd property”), and

(c)   Flat C, 12/F and Roof, Hang Shun Building, Nos. 27-41 Boundary Street, Kowloon (‘the 3^rd Property”).

7. About a further of two years later, on 11 April 2014, the plaintiff commenced the present proceedings.  She said that the Deceased only disposed of the land in the will and so, the residuary estate was to be inherited by 9 persons.

“	Items	Name	Relation	Age
	(a)	HON LAI TSUN	his lawful kit-fat wife and relict	since deceased
	(b)	IP PING YEE formerly known as IP CHUN MUI	his lawful and natural daughter	65
	(c)	IP KAM SING formerly known as IP CHE KAN	his lawful and natural son	61
	(d)	IP WAI SHING	his lawful and natural son	58
	(e)	YIP CHING YU IRENE	his lawful and natural daughter	54
	(f)	YIP WAI CHOI	his lawful and natural son	50
	(g)	IP KIM SING	his lawful and natural son	since deceased
	(h)	YIP KANG	his natural son	61
	(i)	YIP WAH	his natural son	Around 70	”

8. The plaintiff made enquiries with the defendant as to the administration of the residuary estate.  Although he did replied, she was not satisfied and went ahead to issue the present proceedings.

9. The defendant opposed the application.  He explained that one of the sons of the Deceased, Yip Wah contacted him to include the said 3 properties in the estate.  He did so, including taking steps to defend and settle a High Court action relating to the 1^st property (“HCA No 2592/2008”) and preparing a deed of family arrangement to be signed by all beneficiaries.  It was only that the plaintiff who was not happy about it.  He said that there was no need to obtain a further grant and he agreed to appoint both the plaintiff and Yip Wah as his joint attorneys to administer the residuary estate.

10. Yip Wah also filed an opposing affirmation against the originating summons.  He took some time to explain the family background.  He further explained that he had started his involvement in the matter by defending HCA No 2592/2008. At that time, default judgment had been obtained against the 1^st property and none of the beneficiaries was willing to take the risk and bear the legal costs to defend it.  He did so and eventually, the proceedings were settled and he did consult the beneficiaries as to the distribution of the residuary estate.  He had tried his best to come up with the deed of family arrangement to achieve a fair distribution.  However, in the event that the plaintiff was not satisfied and asked for a “strict” distribution under Intestates’ Estates Ordinance (Cap 73), he also welcomed.  He did not object to the suggestion that the plaintiff was also to be appointed as an additional attorney.  However, it was not necessary to make a further grant.

11. On 2 July 2014, the plaintiff issued a summons and filed her affirmation in reply.  By the summons, she sought leave to amend the originating summons by adding Yip Wah as a defendant and asked the court for:

(a) a declaration if Yip Wah had the authority to deal with the 3^rd property by the Power of Attorney signed by the defendant on 28 October 2013, and

(b) an order directing both the defendant and Yip Wah to render an account of the estate, verified on oath, in particular the 2^nd property.

12. In her affirmation in reply, the plaintiff explained that she had made various enquires but yet to be fully answered.  She therefore sought further reliefs from the court.  She also took the view that Yip Wah had taken part in the matter.  Although she and Yip Wah enjoyed the same priority to the grant regarding the residuary estate, it was doubtful if he was appropriate to be appointed. In the circumstances, she also asked to join him in the proceedings.

13. The defendant opposed the summons.  He reiterated that he took a neutral position among all beneficiaries.  He informed the handling of the 3 properties so far.  He took the view that the position of all the residuary estate had been clear and saw no need for a true inventory and/or account.

14. I dealt with the call-over hearings of both the originating summons and the said summons on 8 July 2014.  Having heard from the parties, to save costs and time, I adjourned them to be heard together.  In so doing, I had the confirmation from Yip Wah that he would (continue to) oppose the originating summons if he would be ordered to be joined in.  However, he would only rely on the evidence having been filed by him and the defendant. 

15. The 2^nd affirmation of Yip Wah was filed and served. In the document, he reiterated that the residuary estate consisted of the 3 properties only.  They had been accounted for clearly and as such, there was no need for an account to be done.

16. It then followed by the 3^rd affirmation of the plaintiff.  She reiterated her stance and the need to obtain another grant to deal with the residuary estate, including that there was improper administration by the defendant. No sufficient information had been provided with her to consider the administration of the 1^st property and HCA No 2592/2008. She did not accept the explanation that the 2^nd property was transferred to the wife and son of Yip Wah for convenience only.  Regarding the 3^rd property, she also complained that the defendant had failed to answer her enquires and she had lost confidence in him.

17. The plaintiff also denied that the mother of Yip Wah was the lawful kit-fat wife and the allegation that her mother was only a concubine.  She further said that the mother of Yip Wah was only “taken into the Deceased’s family as a daughter-in-law to be the Deceased’s bride (童養媳)”.

18. Probably, in light of the raise of issue of the status of the mother of the Yip Wah, the defendant sought to rely on one Mr Hou Tung who informed that the mother of Yip Wah was the ‘kit fat” wife of the Deceased and the one of the plaintiff was only concubine.  Further, Yip Wah also prepared his 3^rd affirmation denying the allegations of the plaintiff, explaining how he had dealt with the residuary estate and exhibiting the documents/accounts relating to the 2^nd property.

19. To make use of the limited time available at the call-over hearing, I allowed the reliance of the 3rd affirmation of Yip Wah by the defendant and granted corresponding leave for the plaintiff to reply.  As to the affirmation of Hou Tung, I adjourned it to be heard at the hearing of the originating summons.

Rulings and Discussions

20. Parties appeared before me on 19 December 2014.  Mr Matthew Ho of Counsel acted for the plaintiff and Mr Leung Kin of Messrs Leung Kin & Co represented both the defendant and Yip Wah.  Having heard from them, I adjourned the matter for written decisions to be handed down.  I now do so.

Preliminary matters 

21. I start to deal with 3 preliminary matters, (a) whether the affirmation of Hau Tung should be allowed to be relied upon at the hearing, (b) if Yip Wah should be joined in the present proceedings, and (c) should the plaintiff be allowed to add 2 further reliefs (declaration and account as per paragraph 11 above).  Upon thought, I decline both (a) and (b) but would allow (c).

22. The affirmation of Hau Tung mainly purports to argue that Yip Wah’s mother was the lawful kit fat wife of the Deceased. Leaving aside the question that such disputes could not be resolved by affidavit evidence, it is simply irrelevant for the purpose of resolving the administration action commenced by the plaintiff who mainly argues that she should be granted to the right to administer the residuary estate of the Deceased.

23. Similarly, the executor of the will and grantee of the probate has been the defendant herein.  There is no (good or sufficient) reason justifying the joining of Yip Wah as a necessary party to assist the court to determine the dispute(s) and/or answer the question(s) before him.

24. The further reliefs sought by the plaintiff come within the ambit of administration action.  They were not sought too late.  I see no prejudice suffered by the defendant to have these questions resolved at one go and indeed, the defendant has adduced evidence to deal with them.

25. I now turn to the substantive part of the 4 dispute(s)/question(s) raised by the amended originating summons.  For the present purpose, in order to answer them by a more logical order, they are re-arranged in the followings:

(a)  Is grant issued under HCAG 8512/1996 a limited one (limited to the land disposed under the will)?

(b)  Should the court order both the defendant and Yip Wah do provide accounts (verified on oath) of the estate, in particular the 2^nd property?

(c)  Does Yip Wah (with the attorney signed by the defendant on 28 October 2013) have the authority to convey the interest of the 3^rd property to the plaintiff or other beneficiaries?

(d)  Should the court order a further letters of administration to the plaintiff so that she could administer the residuary estate of the Deceased?

26. First, the grant issued under HCAG 8512/1996 is a general or full grant. dThere is no limitation on the probate issued to the defendant and the court did in 2012 allow the inclusion of the new estate duty paper into the same.

27. Mr Ho appeared to argue that a limited grant should have been issued the defendant.  I respectfully disagree.  The answers could be found at paragraphs 158 and 159 of the Guide to Non-Contentious Probate Practice issued by this court in 2013.

“ 158. A testator may limit the scope of disposal of his property or the power of the executor in whatever particular way he so desires. The probate to be issued will bear the same limitation accordingly. However, it should be borne in mind that there is a general policy against the issuance of a grant limited only to certain property because administration of the estate of the deceased should not be done in a piecemeal fashion.

159. When a will only disposes of one property, it is common for practitioners to apply for a grant limited to such property accordingly. However, practitioners should note that, by practice, if there is no express restriction on an executor in relation to his “power”, a general grant will be issued. No limited grant is to be issued unless the applicant can show evidence of contrary intention of the testator.”

28. There is no doubt that a full grant having been issued to the defendant at all material times.  The plaintiff has not adduced anything to “show evidence of contrary intention of the testator” to try to persuade the court that the original grant had been incorrectly issued.

29. Second, I would direct the defendant (but not Yip Wah) to provide an inventory and account in respect of the whole (and not just part of it) of the estate.

30. It is trite law that a trustee shall account to his beneficiaries. The defendant and Yip Wah have by a number of affirmations explaining the dealing with the estates and producing some documents.  A good summary of the position could be found in the skeleton of Mr Leung,

“ 26. Lot No. 2124 in Demarcation District No. 76

(a) The latest stage of the compensation money in respect of the resumption of the lot has been provided in the 3^rd Affirmation of Yip Wah.

(b) D applied to obtain the compensation money in respect of the resumption of the 1^st Property from government after setting aside the Default Judgment for adverse possession of the 1^st Property in 2012.

(c) In November 2014, compensation money in the sum of HK$1,419,286.00 (HK$1,779,286.00 – 360,000) was finally released following the resumption of the 1^st Property.

(d) The compensation money obtained from DLO is now kept by Messrs. Leung Kin & Co. (“LKC”) as stakeholder pending the consensus of the beneficiaries as to how the distribution of the assets of the Deceased’s estate should be carried out.

(e) The total sum was HK$1,779,286.00. Out of the said HK1,779,286.00, a sum of HK$360,000.00 (equivalent to a sum slightly over 20% of the compensation money) was for the Plaintiff in HCA2592/2008 pursuant to settlement of the parties which was approved by the court. The Plaintiff in that action already obtained judgment for adverse possession of Lot No. 2124 in Demarcation District No. 76 against the estate. The said settlement was made in the best interest of the estate.

27. 1/2 share of The Remaining Portion of Section A of Lot No. 2101 in Demarcation District No. 76

The 2^nd Property was assigned to Yip Chi Fung (the son of Yip Kang) and Yip Lee Tang Hei (the wife of Yip Wah) on trust for convenience. The rental income has been set out in Affirmation. Both of them are willing to give the property back to the estate of Ip Kat Cheong for distribution among the beneficiaries in accordance with the provisions of the Intestacy Ordinance or in accordance with the terms of the Deed of Family Arrangement if agreement can be reached by all beneficiaries.

28. Flat C (No. 33B Boundary Street) on 12th Floor and Roof, Hang Shun Building, Nos. 27-41 Boundary Street, Kowloon

P and her siblings now occupy the property and have not paid any rental for their occupation.”

However, as a matter of completeness and formality, I still prefer “a true and perfect inventory… and a just and true account…” in the circumstances.

31. Yip Wah has played a part in the administration.  However, he did so with the authority given to him by the defendant.  He is not obliged to give any account under the law.

32. The plaintiff prayed in her relief for an account with particular reference to the 2^nd property.  I take the view that it is unfair to do so, especially in light of the undisputed or indisputable evidence that the 2^nd property had been transferred to Yip Wah’ son and wife and the 3^rd property has always been occupying by the plaintiff/her siblings and family without paying any fee.  This court is not asked to adjudicate these matters and parties must be in a better position to see how they should be sorted out.  However, for the purpose of account, it must be a complete one so that everyone knows what has been going on.

33. Third, the defendant was issued with a full grant to deal with the whole of the estate of the Deceased.  There has never been any limitation in his power to deal with the administration.  I see no problem with the delegation of his power to someone, including Yip Wah.  Parties at the hearing informed me that the relevant power of attorney was valid for one year only, and as such it had expired on 27 October 2014.  In the circumstances, but for such expiration, I would have answered “yes” to this question posed by the plaintiff.

34. Fourth and finally, I would say ‘no” to the last question raised by the plaintiff.  Having decided that the probate in the hands of the defendant is a full grant, the taking out of any power having been given to him requires a revocation of the probate, of which only a Judge has the necessary jurisdiction to do so (section 5(3) (b) Probate and Administration Ordinance (Cap 10)).

35. Even if I had such power, for the best interest of the beneficiaries, I would decline to exercise it in light of the evidence before me.

36. The defendant has been doing his job.  The present proceedings do not provide a proper forum for me to decide on whether the defendant has done his job properly, including the delegation of power to Yip Wah.  It suffices for me to come to the conclusion that the plaintiff has not been able to satisfy the court of the administration on the part of the defendant is improper or wrong, and/or to such an extent that he shall be removed from his office.

37. On the other hand, with the stances taken by the plaintiff and her family in relation to the 1^st property and HCA No 2592/2008 as well as the 3^rd property, I do some doubt as to whether she could impartially administer the residuary estate.

38. Hopefully, with the present litigation, the parties have become more aware of the position, factually and legally, so that they could have the distribution resolved among themselves without further resort to the court for determination.

Summary

39. To sum up and answer the amended originating summons in its own order, I will order the followings.

(a)  Application for grant to be issued to the plaintiff in respect of the residuary estate is refused.

(b)  Declaration that the grant issued under HCAG 8512/1996 be limited to the land is also refused.

(c)  But for the expiry of the Power of Attorney by 27 October 2014, Yip Wah would have the proper authority or power to administer the 3^rd property and transfer its legal and beneficial title to the plaintiff or other beneficiaries.

(d)  The defendant do within 28 days file and serve an updated true inventory and account of the residuary estate, verified on oath.

Costs

40. I have not heard from the parties regarding the question of costs.  However, there appears to be no reason to depart from the principle that costs follow the event.  The substance of the plaintiff’s application is refused. I see no assistance to the administration by the reliefs she added in the middle of the proceedings.  The ordering of the defendant to provide an account is only a matter of formality.  Hence, there will be an order nisi that the plaintiff do pay all costs of the defendant and Yip Wah, including all costs reserved (apart from the costs of the summons issued by the defendant shortly before the hearing, of which I will direct the defendant to bear the costs instead), to be taxed if not agreed.