YUEN KWOK LEUNG ERIC AND ANOTHER v. MING CHOR PAO by her guardian ad litem CHU KWOK KEE KOOKIE AND ANOTHER

HCA 1637/2015

[2018] HKCFI 583

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1637 OF 2015

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(By originating writ and order to carry on made by Master S Lo dated 2^nd November 2017)

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D E C I S I O N

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Introduction

1.  This is the 2^nd defendant’s appeal against an order made by Master S Lo on 2 November 2017 appointing Chu Kwok Kee Kookie (“Kookie”) to represent the estate of the 1^st defendant, deceased (“Madam Ming”), for the purpose of continuing this action. 

2.  On 4 May 2017, the plaintiffs issued a summons under Order 15 rule 7 of the Rules of the High Court, seeking, amongst other things, an order that D2, or Kookie, or alternatively such other person be appointed to represent the estate of Madam Ming for the purpose of this action and that the action be carried on by the person appointed.

3.  Kookie and the 2^nd defendant (“D2”) are brothers they also have a sister Chu Kwok Mui Camay (“Camay”).  Madam Ming was their mother and Chu Tse Wen was their father (“Father”). Father died on 12 February 2013.  Madam Ming died on 21 November 2016. 

4.  The issue before Master S Lo was whether Kookie or D2 should be appointed to represent Madam Ming’s estate for the purpose of this action.

5.  The plaintiffs’ position in the present appeal is neutral.  Although they were present at the 1^st hearing on 19 December 2017, they have been granted leave to be absent at the 2^nd hearing on 26 February 2018. 

Background  

6.  This action was issued by the plaintiffs against both Madam Ming and D2 (in his personal capacity for breach of warranty to represent Madam Ming).  The subject matter of this action relates to a Provisional Agreement dated 14 March 2015 and a Formal Agreement for Sale and Purchase dated 27 March 2015 of a property in Mei Foo Sun Chuen (“Property”) which was registered in the names of Madam Ming and Father as joint tenants.  Madam Ming became the sole owner of the Property after Father’s death.

7.  Both the Provisional Agreement and the Formal Sale and Purchase Agreement were signed by D2 in the alleged capacity as the lawful attorney for Madam Ming as vendor.  D2 relied on an enduring power of attorney dated 15 January 2014 purportedly given by Madam Ming to him (“EPA”).

8.  It was the plaintiffs’ case that without their knowledge :

(i)   On 31 December 2013, Kookie commenced HCMH 83/2013 naming Madam Ming as defendant to seek an order that Kookie be appointed the committee for Madam Ming’s estate on the ground that she was incapable, by reason of mental incapacity, of managing and administering her property and affairs (“MH Action”);

(ii)   On 27 March 2015, Kookie issued an originating summons against Madam Ming and D2 under HCMP 704 of 2015, for an order that the EPA be declared invalid and ineffective and that D2 be removed as an attorney for Madam Ming, in that Madam Ming had become mentally incapacitated prior to 31 December 2013 (“EPA Action”).  Kookie had caused the originating summons be registered in the Land Registry against the Property.

9.  It was the plaintiffs’ case that it was while raising requisitions on the title of the Property they discovered the above proceedings issued by Kookie.  D2 himself then took out a Notice of Motion under HCMP 799/2015 to vacate the originating summons in the EPA Action.

10.  As a result of the above various actions, completion of the sale of the Property did not take place, and the plaintiffs said they accepted Madam Ming’s repudiation of the sale and demanded repayment of the deposit and damages, and when the defendants failed to pay, the plaintiffs issued the writ herein.

11.  In the meantime, an enquiry hearing was held in the MH Action by L Chan J who on 15 June 2015 declared that Madam Ming, who was then 95 years old, was a person incapable, by reason of mental incapacity, of managing and administering her property and affairs and appointed Kookie to be the Committee of Madam Ming (“Appointment Order”).  The Appointment Order was strongly opposed by D2, who had applied to intervene.

12.  It would appear that about two weeks after Father’s death, in fact Camay had commenced an action against Kookie under HCA 361/2013 for misappropriation of their parents’ properties.  Camay’s claim was subsequently struck out and the action dismissed on 31 August 2013. 

13.  In the course of the MH Action, it transpired that Madam Ming had made 3 wills:

(i)   On 22 November 2010, Madam Ming and Father had respectively executed a will in Chinese in the presence of a solicitor and Kookie was the executor under both wills, and all three children were beneficiaries under Madam Ming’s will (“1^st Will”);

(ii)   On 20 March 2013, Madam Ming made a 2^nd will in English and only D2 and Camay were beneficiaries under it (“2^nd Will”);

(iii)   On 24 October 2013, Madam Ming purportedly made a 3^rd will, with D2 as executor and sole beneficiary (“3^rd Will”).

14.  Further, in the course of the MH Action, D2 disclosed another power of attorney dated 28 October 2013, made in English by Madam Ming appointing D2 as her attorney to deal with all her properties (“POA”).

15.  L Chan J had considered, amongst other things, that in light of the 2^nd and 3^rd Wills, the POA and the EPA, D2 was in a position of conflict of interest and it was also inappropriate for D2 to act as the interpreter when Madam Ming was examined by two doctors who had produced medical certificates respectively dated 15 January 2014 and 10 April 2014 as to her mental capacity.  L Chan J had agreed with the views of the Official Solicitor that Kookie was the most appropriate person to be appointed because (i) there was no concrete evidence placed by D2 on the allegation that Kookie had misappropriated Madam Ming’s properties; and (ii) all along Kookie had been taking care of Madam Ming and was well familiar with her needs and financial affairs.

16.  D2 had lodged an appeal against the Appointment Order but his appeal was dismissed by the Court of Appeal which handed down a judgment on 30 September 2016 (“CA Judgment”)[1].  In particular, the Court of Appeal found L Chan J was correct to prefer the opinions of the doctors on Kookie’s side, namely Dr John Wong and Dr CK Wong, than those on D2’s side. 

17.  While Kookie was the Committee of Madam Ming’s estate and prior to Madam Ming’s death on 21 November 2016, Kookie had filed a defence contesting the plaintiffs’ claim herein.

18.  When the plaintiffs’ summons was heard before Master S Lo, Master S Lo accepted the arguments put forward on behalf of Kookie, namely that there is a conflict of interest between D2 and Madam Ming’s estate in this action and that it is in the interest of Madam Ming’s estate for Kookie to be appointed to act for Madam Ming’s estate for the purpose of this action.

19.  D2 issued a summons on 2 November 2017 to appeal against the decision of Master S Lo on the same day.

20.  In the present appeal, Mr Wong appeared for Kookie and D2 acted in person.

21.  Mr Wong submitted that the present action arises due to the wrongful act of the D2 and that the deposits paid by the plaintiffs are being kept by D2.  Further, D2 is sued in his personal capacity for breach of warranty to act for Madam Ming to sell the Property.  Thus, if D2 is to be appointed to handle this action for Madam Ming’s estate, there is a real risk that he would not contest the plaintiffs’ claim to the best interest of Madam Ming’s estate. 

Discussion

22.  It is trite that an appeal from the master to the judge in chambers is dealt with by way of an actual rehearing of the application which led to the order under appeal and the judge treats the matter as though it came before him for the first time[2].

23.  After the MH Action, and prior to Madam Ming’s death, as Committee of Madam Ming’s estate, Kookie had commenced another action on 20 November 2015 under HCA 2728/2015 against both D2 and Camay for declarations that the 2^nd Will and the 3^rd Will were invalid and be set aside (“Set Aside Action”).  

24.  Upon the death of Madam Ming, the Committee was discharged under section 27(4) of the Mental Health Ordinance, Cap 136.   The Set Aside Action was subsequently struck out by Wilson Chan J on 11 September 2017, as Kookie failed to make an application for a substitution order under Order 15 rule 7 of the Rules of the High Court within 3 months as stipulated by the Judge[3].

25.  D2’s main argument in the present appeal was that the Set Aside Action had already been struck out, and as he was appointed the sole executor and beneficiary of Madam Ming’s 3^rd Will, he was entitled to apply for probate of Madam Ming’s estate, which he did on 3 November 2017.  Being executor appointed under Madam Ming’s 3^rd Will, D2 submitted that he should be the proper person to continue defending this action on behalf of Madam Ming’s estate.

26.  However, on 6 November 2017, Kookie has entered a caveat in the Probate Registry against Madam Ming’s estate.

27.  At the 1^st hearing before this Court, D2 sought an adjournment for filing a further affirmation to exhibit new evidence, namely (i) the death certificate of Madam Ming; (ii) confirmation of his application of probate; (iii) the order and decision of Wilson Chan J in the Set Aside Action, which were not placed before this Court at the time of the 1^st hearing.

28.  By the time of the 2^nd hearing, Kookie has issued a probate action, in his own capacity and as an interested person, under HCAP 8/2018, seeking declarations that the 2^nd Will and the 3^rd Will were invalid and be set aside (“Probate Action”).

29.  First of all, the Set Aside Action was struck out due to technicality, and there is nothing this Court can see, and no authority had been referred to by D2, that Kookie is prevented from issuing the Probate Action.

30.  As pointed out by the Official Solicitor in the MH Action and as seen in the CA Judgment, if the Court were to accept the opinions of Dr John Wong and Dr CK Wong, Madam Ming very likely did not have the mental capacity to sign the EPA and the sale of the Property ought to be set aside and further Kookie would be the most appropriate person to be the Committee, in other words to represent Madam Ming in the present action.  This was accepted by L Chan J and confirmed by the Court of Appeal.

31.  At present, the validity of the 2^nd and the 3^rd Wills is being challenged by Kookie and if he succeeds, D2 would not be the executor of Madam Ming’s estate.  Pending the resolution of the validity of the wills, in so far as the present action is concerned, D2 himself is also a defendant being sued in his personal capacity and his case in his defence is that, amongst other things, he had acted under the EPA which was valid and D2 has also counterclaimed for specific performance and/or damages against the plaintiffs.  As for Madam Ming’s estate, the defence filed by Kookie as Committee is based on the EPA being invalid.  There was no counterclaim by the estate. 

32.  Having considered D2’s defence and the defence file on behalf of Madam Ming, I agree with Mr Wong’s submission that there is a conflict of interest between D2 and Madam Ming’s estate in the present action.

33.  There has been no other person put forward to represent Madam Ming’s estate.  Having considered the history of this matter, and that Kookie has been representing Madam Ming since after the Appointment Order in June 2015 in this action and has filed the defence on behalf of her estate, I am of the view that he is the appropriate person for the purpose of this action and for this action to be carried on by him on behalf of Madam Ming’s estate.

Conclusion

34.  In light of the above, I agree with the order made by Master S Lo.

35.  I hereby dismiss D2’s summons issued on 2 November 2017 and order him to pay the 1^st defendant’s and the plaintiffs’ costs of this appeal, such costs to be taxed if not agreed.