FUNG YUEN LUN v. FUNG CHUI YING

HCAP 1/2020

[2023] HKCFI 2324

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 1 OF 2020

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BETWEEN

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REASONS FOR JUDGMENT

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1.  On 4 September 2023, this Court, after hearing the Plaintiff’s submissions and the evidence testified by the Plaintiff, Mr Fung Yuen Lun, made the following orders:

(1) An order that the Defendant be removed as the executrix of the Estate of Lam Mei Lin, that the Plaintiff be appointed in her place, and that any property belonging to the Estate of Lam Mei Lin be vested in the Plaintiff;

(2) An order that the Defendant do provide to the Plaintiff within 28 days a true and accurate inventory and account of the Estate of Lam Mei Lin from the date of her death to the date of the present Order;

(3) Costs of the present proceedings be paid out of the Estate of Lam Mei Lun.

2.  This Court also allowed the Plaintiff’s application for amendment to his Statement of Claim partially pursuant to his Summons dated 15 August 2023 with a costs order that the costs of and occasioned by the application and the amendments be paid by the Plaintiff to the Defendant to be taxed if not agreed.

3.  The Plaintiff also withdrew its Summons dated 15 August 2023 to file and serve the Supplemental Witness Statement of Fung Yuen Lun. This Court granted the withdrawal application with no order as to costs.

4.  Now I give reasons for the above decisions and orders.

Background

5.  By way of background, Madam Lam Mei Lin (the “Deceased”) was the lawful wife of Fung Kwok Yan (the “Late Husband”), with whom she had three children, namely, the Plaintiff, the Defendant and Fung Wai Man.

6.  The Deceased died of Carcinoma of the Gall Bladder on 19 April 2009, whereas the Late Husband died almost 10 years later on 9 December 2018.

7.  The Plaintiff’s primary case was that the Will of the Deceased dated 18 May 2007 (the “Will”) was invalid for want of testamentary capacity and/or knowledge and approval.

8.  Under the Will, the Plaintiff, the Defendant and Fung Wai Man (but not the Late Husband) were named as beneficiaries. The Defendant was named as the sole executrix of the Deceased’s Estate (the “Estate”).

9.  The Will and the Letter of Probate of the Estate granted to the Defendant on 20 February 2019 (the “Probate”).

10.  By way of amendments, the Plaintiff also seeks the following further and/or alternative reliefs:

(1) An Order that the Defendant be removed as the executrix of the Estate, that the Plaintiff be appointed in her place, and that any property belonging to the Estate be vested in the Plaintiff;

(2) An Order that the Defendant do provide to the Plaintiff within 28 days a true and accurate inventory and account of the Estate of from the date of her death to the date of the Order;

(3) An Order against the Defendant for due and proper administration of the Estate.

Procedural History

11.  This Court notes that after the Defendant filed her Defence and after the parties’ exchange of List of Documents in September 2021, the Defendant filed a Notice to Act in Person on 1 December 2021.

12.  However, the Defendant has failed to exchange any witness statements with the Plaintiff and is debarred from adducing any oral evidence from any witnesses by virtue of the Order of Master Matthew Leung dated 10 June 2022.

13.  The Defendant had also failed to attend the Registry to fix the dates for the pre-trial review and the trial despite the relevant notices were sent to her by registered post. The Defendant has not attended the pre-trial review.

14.  This Court is satisfied that the Defendant is duly notified of these proceedings and the fact that the present trial was due to commence on 4 September 2023. I refer to the Affirmation of Tong Wai Chun who affirmed that the trial bundles and the Plaintiff’s Opening Submissions with list of authorities were duly served on the Defendant on 21 August 2023.

15.  Nonetheless, the Defendant chose to absent herself from this trial.

16.  In the circumstances, the Plaintiff only has to prove his case and the Court has to satisfy that he has discharged the relevant burden and standard of proof.

Preliminary Issue – Jurisdiction of the Probate Court

17.  This Court has drawn to the attention of Ms Law for the Plaintiff the case of Re the Estate of Leung Yee Mee and Re the Estate of Au Kwok Tung, HCAP 8 and HCAP 9 of 2020, 24 February 2023, unreported, where Mr Justice K Yeung at §§20-25 rightly set out that there is a distinction between matters of probate and matters of administration. This being a probate action, I do not consider that it is right for this Court to deal with matters of administration, in particular, in relation to the Deceased’s bank deposits. Accordingly, this Court will only deal with matters of probate in these proceedings.

18.  With the above preliminary jurisdictional point in mind, Ms Law for the Plaintiff properly and rightly withdrew the application to adduce the supplemental witness statement of the Plaintiff which essentially sought to deal with matters of administration.

19.  I also allowed the proposed amendments insofar as they deal with matters of probate and not matters of administration. Hence, save for §18A, 18B, 18C, 26 and Prayer 3(c), the Plaintiff’s application for amendments to his Statement of Claim is allowed.

20.  Although the application for amendments came very late in the proceedings, I am of the view that as the Defendant has full knowledge of the same since 16 August 2023 and the amendments also go to the alternative relief to be obtained, I do not see any real prejudice to the Defendant. As such the application for amendments is granted.

Analysis and Determination

21.  In my view, the key issue in the present case is whether the Defendant should be removed as the executrix of the Estate and the Plaintiff to be appointed instead. This is so because even if the Will were to be annulled or set aside for want of testamentary capacity, half of the Estate would devolve into the Estate of the Late Father to be divided by the three children under the statutory regime of our intestacy laws.

22.  Whether the Will is annulled or set aside, the net effect is the same. It will be different if the Late Husband is still alive.

23.  In relation to the key issue, Section 33 of the Probate and Administration Ordinance (Cap 10) (the “Ordinance”) provides that:

“33. Revocation of grants and removal of executors

(1) Where it appears to the court that a probate or administration either ought not to have been granted or contains an error, the court may call in the probate or administration and if satisfied that it would be revoked at the instance of a party interested, may revoke it.

(2) A probate or administration may be revoked under subsection (1) without being called in if it cannot be called in.

(3) The court may, if satisfied that the due and proper administration of the estate and the interests of the persons beneficially entitled thereto so require, suspend or remove an executor or administrator (other than the Official Administrator) and provide for the succession of another person in place of such executor or administrator and for the vesting in that other person of any property belonging to the estate.” (emphasis added)

24.  In exercising its jurisdiction under Section 33, the court must consider whether the removal of the executors is necessary for the due and proper administration of the estate and in the interests of the beneficiaries. In the case of Re Estate of Lee Da Kor [2010] 1 HKLRD 415 (per Poon J (as he then was)), the Court ordered the executors be removed for two principal reasons: (a) they had failed to render a full and proper account despite repeated requests from the plaintiff and the documents that they had provided were insufficient; and (b) they had been unjustifiably dilatory in distributing the estate (see §37).

25.  The Court of Appeal in Re Estate of Tsui Yuen Ying [2023] HKCA 876 §§17-18 summarized the principles on the removal of an administrator as follows:

“17. The legal principles applicable in these proceedings are clear. In respect of removal of an administrator, both sides were content to rely on the summary of legal principles in §§157 - 160 of the Judgment:

‘157. The applicable legal principles on removal of administrators are not in dispute. Section 33(3) of the Probate and Administration Ordinance (Cap 10) gives the court power to remove administrators. The section provides:

‘The court may, if satisfied that the due and proper administration of the estate and the interests of the persons beneficially entitled thereto so require, suspend or remove an executor or administrator (other than the Official Administrator) and provide for the succession of another person in place of such executor or administrator and for the vesting in that other person of any property belonging to the estate.’

158. The overriding consideration for the court is the welfare of the beneficiaries. In deciding whether to remove a personal representative, the proper question to ask is whether for that end the removal is necessary for the due and proper administration of the estate: see Chow Chak Kiu v Chow Man Chit. It is not every mistake or neglect of duty, or inaccuracy of conduct of trustees, which will induce the court to remove the office of a personal representative. The acts or omissions must be such as to endanger the trust property or to show a want of honesty, or want of proper capacity to execute the duties, or a want of reasonable fidelity: see Thomas and Agnes Carvel Foundation v Carvel.

159. In exercising its discretion, the court should have regard to the size of the estate, the nature of the assets that need to be administered, the background and education, training and experience of the remaining and substituted personal representatives and the interests of the beneficiaries: see Wong Tat Lun Eddie & Ors v Wong Chi Ho Jimmy & Ors. The view of the majority beneficiaries is a relevant factor: see Chan Yu Hong v Chan Kam Hong. The discretion is to be exercised with great caution and sparingly. In general, removal of a representative is not to be preferred unless the administration is still far from completion: Chan Yu Hong. The courts are reluctant to exercise the discretion where the incumbent executor or administrator wishes to carry on, without allowing that incumbent an opportunity to repair or remedy any defects and progress promptly with due administration. The fact that administration of the estate could have been done better is not of itself sufficient ground: Wong Tat Lun Eddie & Ors. Hostility between the trustee and beneficiaries as such is not a ground for removal of the trustee, unless the breakdown of relations between them is such as to lead to the administration coming to a standstill, or makes it difficult or impossible for the administration to be completed by an existing personal representative: Chan Sau Heung v Kwan Siu Fai; Re Estate of Kwan Chung; Jones v Firkin-Flood.

160. Common examples where the court has exercised its power of removal of administrators are: inactivity for years as in Re Lam Choi Hing Billy; failure to render a full and proper account despite repeated request while adopting a dilatory attitude in distributing funds of the estate as in Re Estate of Lee Da Kor; risk of misappropriation of the estate’s property by reason of the personal representatives’ drug addiction as in Re Estate of Yuen Wing Sum; misappropriation of the estate’s property and repeated failure to follow court’s order as in Chow Chak Kiu v Chow Man Chit.’

18. It may be added that in principle, where there are a number of beneficiaries, some of whom are content with the administrator and one is not, the view of the majority is a relevant factor, but the hostility between the administrator and the discontented beneficiary, or that beneficiary’s lack of confidence in the administrator, should be considered against the backdrop of what the administrator has done, or failed to do, in his conduct of the administration. That is because the overriding consideration is whether the administration of the estate is being properly carried out.” (emphasis added)

26.  It is not necessary to establish specific wrongdoing, misconduct or fault on the part of an executor before he can be removed. The main guide is the welfare of the beneficiaries. While the Court is entitled to take into account the choice of executor by the testator, there is a limit to the weight to be attached to this factor, especially where the removal is based on conduct or circumstances after the death of the testator or arises from a situation which the testator could not have reasonably foreseen at the time when the executor was chosen. See: Re Estate of Chan Mimi (supra), §§62-63.

27.  As to the duty to account, in §17 of Re Estate of Lee Da Kor (supra), it is stated that:

“17. It is the duty of an executor to keep clear and accurate accounts, and to be always ready to render such accounts when called upon to do so: see Halsbury's Laws of Hong Kong (2008 Reissue) Vol.27, para.425.897. In order to provide a true and perfect account, the executor must provide details of the whereabouts of all properties (including cash) which he is bound to administer: see Kwok Wing Yun v Lee Shuk Yee (unrep., HCMP 3904/2001, [2008] HKEC 846), per Chung J at para.19.” (Emphasis added)

See also §18 of Re Estate of Lee Da Kor (supra).

28.  Section 56 of the Ordinance also provides that:

“56. Duty of personal representative as to inventory

The personal representative of a deceased person shall, when lawfully required so to do, exhibit, by affidavit filed in the court, a true and perfect inventory and account of the movable and immovable property of the deceased, and the court shall have power as heretofore to require personal representatives to bring in inventories.”

29.  First, I am of the view that there is a clear dereliction of duty on the part of the Defendant to discharge her duties as the executrix of the Estate of the Deceased. She only applied for the Probate more than 9 years after the Deceased’s death. I do not accept her explanation that as the Late Husband was not included as a beneficiary, she was concerned that the Late Husband would be unhappy and/or hurt by knowing such fact and as such she did not apply for probate for more than 9 years. The beneficiaries all have a right to know about the existence of the Will and to have the assets under the Estate properly and efficiently administered. She owes a duty to all the beneficiaries. She cannot decide whether to apply for probate or not.

30.  In any event, I do not find it credible that the Late Husband would be unhappy or hurt by knowing that the Deceased decided to bequeath her assets to their children. It is only natural that the Deceased would have discussed her estate arrangement with the Late Husband. I do not find the explanation offered by the Defendant credible at all.

31.  I accept that the Defendant adopted a clear dilatory attitude in distributing funds of the Estate and had been inactive in administering the Estate (as in Re Estate of Lee Da Kor (supra)):

(1) Deceased passed away on 19 April 2009. Having been in possession of the Will dated 18 May 2007, it was only sometime after the Late Husband died (9 December 2018) that the Defendant applied for a grant which resulted in the Probate being granted to her only on 20 February 2019, almost 10 years after the Deceased’s demise;

(2) I also accept the Plaintiff’s evidence that he heard on various occasions that the Late Husband (before his death) chased the Defendant as to whether the assets of the Deceased had gone, but the Defendant was reluctant to discuss the matter.

(3) Sometime in 2016, the Plaintiff witnessed how the Late Husband chased the Defendant to deal with the Estate. The Defendant got angry and suddenly claimed that the Deceased made a will which bequeathed her ½ share of the Comfort Gardens interest and that “there is none left” (沒有了) for the other assets of the Deceased. However, the Will in question in fact did not bequeath her ½ share of the Comfort Gardens flat.

(4) As the Defendant was dilatory and reluctant to deal with the Deceased’s Estate, in 2018, the Late Husband asked the Plaintiff to obtain the personal information of Fung Wai Man to facilitate the Late Husband’s application to administer the Estate.

(5) According to the Plaintiff, the Late Husband knew that the Deceased had different types of assets in addition to her ½ share in the Comfort Gardens flat.

32.  The undeniable fact is that up till the present, nothing has been done to administer the Estate of the Deceased.

33.  This Court is told that Fung Wai Man is not in Hong Kong and difficult to contact. The Plaintiff is the obvious choice as a replacement. The only alternative of appointing an independent professional to be an executor of the Estate of the Deceased will have a real costs and expenses issue given the modest size of the Estate.

34.  Accordingly, I am of the view that the better course is to appoint the Plaintiff as the replacement to properly and duly administer the Estate of the Deceased.

35.  Ms Law for the Plaintiff also sensibly did not press for the primary relief of revoking or nullifying the Will.

36.  For the reasons stated above, I made the orders as set out in Paragraph 1 above.

37.  Finally, it remains for me to thank Ms Law for her helpful assistance to this Court.