YEE KWOK CHUN AND ANOTHER v. YU KWOK LEUNG ALBERT AND ANOTHER

HCCA 4070/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CAVEAT NO. HCCA 4070 OF 2010

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BETWEEN

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D E C I S I O N

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INTRODUCTION

1.  This is a dispute among the siblings as to who should be appointed as the administrator(s) in relation to the estate of their deceased father.

BACKGROUND

2.  Mr. Yee Fong (余晃) (“the Deceased”) died intestate in Hong Kong on 15 November 2010 at the age of 88 years. His wife passed away before him in 1987.

3.  The Deceased and his wife had six children. They are equally entitled to a share in the estate (“the Estate”) of the Deceased.

(a)Yee Kit Mui (余潔梅) (‘Kit Mui’),

(b)Yee Shiu May (余小梅) (“Shiu May”),

(c)Yee Kwok Chun (余國珍) (“Kwok Chun”),

(d)Yu Mee Lee Pendora (余美梨) (“Pendora”),

(e)Yu Kwok Leung Albert (余國良) (“Albert”) and

(f) Yu Kwok Fai Edward (余國輝) (“Edward”).

4.  There might be some disputes over the exact size of the Estate. However, without prejudice to any of the administration of the Estate in future, for the present purpose, I set out the followings.

(a) Six (6) shares out of a total of ten (10) in a company called Empire Winner Limited (帝運有限公司) (“the Company”). The Company has been used to mainly hold the premises known as Shop D, Lower Ground Floor, Siu Bo Mansion, Tsat Tsz Mui Road, North Point (“the Premises”) for lease. As on 31 March 2010, the value of the Company was worth at about $21.7 million. Hence, roughly, the Deceased’s shares amounted to about $13 million.

(b)Various bank accounts jointly held between the Deceased and others, including some of his children, in the total sums of about $1.9 million.

(c) 30 taels of gold held by Shiu May for the Deceased in the sum of $480,000 approximately.

5.  At the same time, as on 31 March 2010, from the accounts of the Company, the Deceased owed to it a sum of about $3 million as loans to director. There had been some argument over the nature of such $3 million as to whether it was loans to the Deceased or remunerations to the Deceased. By the 5^th Affirmation of the Kwok Chun filed after the hearing before me, she confirmed for all the Daughters that they would have no objection for the Estate admitting such claim as loan from the Company to the Deceased. 

6.  In light of the above evidence, the size of the Estate was about $12.38 million.

7.  Shortly before and/or after the death of the Deceased, there were some discussions among the siblings as to the distribution of the Estate. No agreement was reached.

8.  On 20 December 2010, Albert and Edward (collectively called as “the Persons Warning”) through their solicitors filed their application for grant in relation to the Estate under HCAG013952/2010. Their sisters apparently complained that application as they had not been informed. Shiu May and Kwok Chun (collectively called as the Caveators”) then took out the present caveat proceedings, trying to address their concern.

(a) By summons dated 13 May 2011, the Caveators asked this Court to add them as administratrices in addition to the Persons Warning.

(b) By another summons dated 25 October 2011, Pendora further asked this Court to consider appointing an independent solicitor to act as administrator instead.

9.  In the meantime, as the Company formed the major part of the Estate, and that the other remaining four (4) shares of it belong to Kit Mui (1 share), Albert (2 shares) and Edward (1 share) when only Kit Mui and Albert were the directors thereof after the death of the Deceased, Albert and Edward commenced HCMP 863/2011 on 12 May 2011 against Kit Mui and the Company, asking for, inter alia, the appointment of Edward as the additional director.  The matter was heard by the Honourable Mr. Justice Harris on 2 December 2011. By consent, the learned Judge appointed both Shiu May and Edward as additional directors of the Company. Kwok Chun and Albert’s wife were also appointed as alternate directors of Kit Mui and Edward respectively. The other arguments of the parties were adjourned sine die with liberty to restore pending outcome of the present proceedings. 

10.  Parties appeared before me on 13 December 2011.  Mr. Douglas Lam of Counsel, leading his Junior Ms. Sabrina Ho acted for the Caveators and Pendora when Mr. William Wong of Counsel acted for the Persons Warning.  Having heard from the Counsel, I reserved my decision to be handed down.  I now do so.

DECISION AND REASONS

11.  Upon consideration of all the evidence authorities and submissions from the counsel, I have decided to appoint an independent solicitor in the circumstances of the case. My reasons appear in below.

12.  There is no dispute that the siblings are divided into two camps, the brothers (i.e. the Persons Warning) and the sisters (i.e. Kit Mui, the Caveators and Pendora). Although it is Pendora, strictly not a party to the present caveat proceedings, who took out the 2^nd summons under section 36 Probate and Administration Ordinance (Cap.10) (‘PAO”) before me, I take it that it is also a proposition made by the Caveators. Hence, by looking into the substance of the matter, rather than the form only, the jurisdiction of the Court under section 36 PAO has been triggered.

13.  Once section 36 PAO is involved, this Court is empowered with a wide discretion to appoint administrator as he deems necessary or convenient having regard to the circumstances of the case. Section 36 PAO states that:

“36. Appointment of administrator of intestate’s estate

Where a person dies wholly intestate as to his estate or leaving a will affecting estate but without having appointed an executor thereof willing and competent to take probate, or where the executor is, at the time of the death of such person, resident out of Hong Kong, or where it appears to the court to be necessary or convenient to appoint some person to be the administrator of the estate of the deceased person or of any part of such estate, other than the person who, if this Ordinance had not been passed, would by law have been entitled to a grant of administration of such estate, the court may, subject to section 25, appoint such person as the court thinks fit to be such administrator, on his giving such security, if any, as may be required under this Part or as the court may direct, and every such administration may be limited in such manner as the court thinks fit.”

14.  In balancing all the factors raised by the parties, including in particular the followings, I take the view that an independent solicitor is appropriate in the circumstances.

(a) All the siblings enjoy the same priority to the grant to administer the Estate under rule 21 (1) (ii) of the Non-Contentious Probate Rules (Cap.10A).

(b) The sisters’ camp represents 2/3 sharing of the Estate when that of the brothers, 1/3.

(c) There are allegations from each of the two camps against each other. In this respect, it is difficult, if not impossible, for me to make findings upon the affidavit evidence. Nonetheless, for the present purpose, it suffices for me to find that there is a mutual distrust between them.

(d) The option of appointing the Caveators jointly with the Persons Warning will only lead to a deadlock situation.

(e) The appointment of either the Caveators or the Persons Warning also does not work as it will cause further litigation with the administration.

(f) The choice of Kit Mui and Pendora is neither practicable nor suitable because, inter alia, they have already taken side with their sisters.

(g) At the end of the hearing, I spent some time discussing with the Counsel as to how the administration of the Estate is to be done. It might appear to be simple at first glance. However, apart from collecting the assets, including taking possession of the money in various joint accounts, the gold and the 6 shares in the Company, one must also consider the liabilities as well as distribution. One of course remembers that there is a dispute as to the reasonableness of the funeral expenses spent by the Persons Warning. More important, although the Estate is solvent, namely, the total assets exceed the total liabilities. It is not so in terms of cash. Hence, it might not be possible that one out of the six shares in the Company could be distributed to each of the siblings unless they would be willing to sit together and agree on a practical way to deal with the situation. Failing which, the matter might have to be resolved under Order 85 of the Rules of the High Court. I take the view that a professional will help the administration because of his legal knowledge and independence.

(h) The solicitor only asks for a modest hourly rate of $3,000 per hour and has confirmed a cap fee of $185,000 unless otherwise raised by the Court. Such cap fee represents about 1.5% of the Estate and each of the siblings is required to pay about $30,833 only. The sum is minimal and I believe that the money will be well spent.

ORDERS and COSTS

15.  To conclude, I will make the following orders.

(a) The Caveat filed by the Caveators on 10 December 2010 herein shall cease to have any effect.

(b)The application for grant by the Persons Warning under HCAG013952/2010 is dismissed.

(c) Subject to the filing of all requisite papers in the new application to be made leading to a grant of representation of the estate of YEE FONG (余晃), deceased, and the compliance with the requirement of the Registrar of the Probate Registry, Mr. Cheng Tsz Ying is appointed as administrator under section 36 Probate and Administration Ordinance (Cap. 10) for the estate of the said deceased.

(d)Costs of Mr. Cheng Tsz Ying in the said administration shall be charged at 3,000 per hour, to be borne by the said estate, with a cap fee of $185,000 unless otherwise raised by the further order of the Court or all the consensus of the beneficiaries of the said estate.

(e)Liberty to apply for further directions, if necessary.

16.  I do not have the benefit from the parties on the question of costs.  However, there appears to be no reason why costs should not follow the event. Hence, I further make an order nisi, which will become absolute within 14 days from the date hereof, that:

(f) The Persons Warning do bear the costs of the present proceedings, including all costs reserved and Certificate for Counsel for the hearing on 13 December 2011, to be summarily assessed by me (0.5 hour reserved) failing agreement between the parties within 21 days from the date hereof.