CHOW PO YUEN, a minor by PANG ZHENGYUN, her mother and next friend AND ANOTHER v. CHOW CHUN KIT, the administrator of the estate of CHOW WING CHEUK, deceased and in his personal capacity AND OTHERS

HCMP 1400 & 1455/2014 & 445/2015 (Heard Together)
[2018] HKCFI 2

HCMP 1400/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1400 OF 2014

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MISCELLANEOUS PROCEEDINGS NO 1455 OF 2014

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MISCELLANEOUS PROCEEDINGS NO 455 OF 2015

(TRANSFERRED FROM FCMP NO 182 OF 2012)

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(Transferred from FCMP 18/2012 pursuant to

the Order of Hon To J dated 5 February 2015)

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(Heard Together)

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D E C I S I O N

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Introduction

1.  This is the hearing of the application by the defendant in HCMP 445/2015 and HCMP 1400/2014 as well as the plaintiff in HCMP 1455/2014 (the “applicant”) for: (a) an order for separate trial on the issues of liability and the issue of quantum in HCMP 455/2015 and the trial of the issue of liability in HCMP 455/2015 to be heard together with HCMP 1400/2014 and HCMP 1455/2014; or alternatively for (b) an order that the issues of liability in these summonses be tried as a preliminary issue. 

2.  The applicant is the administrator of the estate of the late Chow Wing Cheuk (the “Deceased”) who died wholly intestate in Hong Kong on 30 September 2011 from stomach cancer (the “Administrator”).  The Deceased was married and was survived by his wife Chow Lai Han (the “Wife”), his daughter Chow Po Yee (the “Daughter”) and his son Chow Chun Kit, the applicant and the Administrator herein.  The Wife is a housewife about 62 years old.   The Son and Daughter are adults in their mid or late thirties.  They have been engaged in work or business for some years. Prior to his death, the Deceased had carried on a decoration and design business on his own personal account and also through some limited companies. In addition, he and his companies owned some landed property.  The Administrator alleged that the estate is insolvent as result of the Deceased’s huge personal liability in the sum of some $20 million.

3.  Pang Zhengyun (“Pang”) is the 1^st plaintiff in HCMP 445/2015 and the 2^nd plaintiff in HCMP 1400/2014.  She is aged about 43 and the mother of Pang Po Yuen (“Po Yuen”), aged eight.  Po Yuen is the 2^nd plaintiff in HCMP 445/2015, the 1^st plaintiff in HCMP 1400/2014 as well as the defendant in HCMP 1455/2014, defending by Pang as her guardian ad litem.  Pang and Po Yuen are collectively referred to as the “Pangs”.  Their case is that Pang was the Deceased’s mistress in the mainland; that Po Yuen is Pang’s daughter born from her cohabitation with the Deceased; and that that they were wholly or substantially maintained by the Deceased prior to his death.  They alleged that the Wife well knew about Pang’s affairs with the Deceased and permitted Pang to personally take care of the bed-ridden Deceased some months before his death.  They said that upon the Deceased’s plea, the Wife, the Son and the Daughter promised to take care of the Pangs.  However, after the Deceased’s death, they retracted from their promises. 

4.  On 23 August 2012, Pang and Po Yuen commenced proceedings in FCMP 182/2012 seeking maintenance under the Inheritance (Provision for Family and Dependants) Ordinance, Cap 481 (the “Ordinance”)as the Deceased’s mistress and illegitimate child respectively.  The parties are in dispute as to whether Po Yuen is a natural daughter of the Deceased.  The Administrator’s case is that at all material until now, Pang was and is married to another man. Pang’s case is that she was pregnant by the Deceased and at a time when she was divorced and single.  In January 2013, the court ordered DNA test to be conducted.  The result of DNA test is not conclusive because the values of half siblingship are low, but it suggested that Po Yuen and the Daughter have different biological fathers.  Despite that, the Pangs indicated to the court that they intended to commence separate probate action to claim for Po Yuen’s share in the estate as a beneficiary on intestacy.  On 11 October 2013, FCMP 182/2012 was stayed for the Pangs to take out probate action on the Administrator’s undertaking not to dispose of the Deceased’s estate except to pay its debts and legal costs in the actions.

5.  However, the Pangs did not take out probate action.  After some exchanges in correspondence between the parties’ solicitors, the Pangs’ solicitors confirmed that they will not commence the intended probate action to make claim in relation to the estate of the Deceased, but they did not admit that Po Yuen is not the natural daughter of the Deceased.  Then on 10 June 2014, the Pangs took out an originating summons in HCMP 1400/2014 seeking a declaration that Po Yuen is a natural daughter of the Deceased and entitled to succession under the Intestate Ordinance.  That led to the Administrator taking out a summons in HCMP 1455/2014 seeking a declaration that Po Yuen is not a natural daughter of the Deceased.  Subsequently, Pang was struck off as party to HCMP 1400/2014.  Thus, the issue in both HCMP 1400/2014 and HCMP 1455/2014 is more or less identical.  On 5 February 2015, FCMP 182/2012 was transferred to the High Court and is now HCMP 445/2015.  It can immediately be seen that Po Yuen’s claim under HCMP 445/2015 is inconsistent with her claim under HCMP 1400/2014.  If she is a natural but illegitimate daughter of the Deceased, she will be a beneficiary of the estate and will be unable to claim as a dependent under the Ordinance. 

6.  The Administrator identified the following three issues of liability:

(1) whether Po Yuen is a natural daughter of the Deceased;

(2) whether Po Yuen and/or Pang are/is entitled to claim against the estate of the Deceased as genuine dependents of the Deceased under the Ordinance; and

(3) if so, whether Po Yuen and/or Pang can discharge the burden to establish that the two of them were maintained by the Deceased before he passed away, and that the Deceased had in fact assumed responsibility towards them.

Procedural background

7.  The Administrator seriously disputed that Po Yuen is a natural daughter of the Deceased and that she and Pang had been maintained by the Deceased.  In addition, he also alleged that the estate was insolvent.  In the circumstances, the proceedings have been conducted with some hostility. 

8.  Filing of evidence in HCMP 1400/2014 and HCMP 1455/2014 was completed by June 2015.  At the direction hearing on 9 September 2015, the court ordered the Pangs to take out all necessary interlocutory applications within 28 days thereafter, ie by 7 October 2015.  Shortly before the expiry of the deadline, the Pangs applied for legal aid.  Allowing for the temporary stay under the Legal Aid Ordinance, the deadline was extended until 19 November 2015.

9.  However, starting from 23 March 2016, four months after the deadline, the Pangs, with the assistance of legal aid, made five applications for interrogatories and specific discoveries under HCMP 445/2015 relating to the value of the net estate, which only goes to quantum or the amount that they may be entitled to.  The Pangs’ solicitors have indicated that more applications were on the way.  In addition, the Pangs have, without leave of the court, engaged a forensic accountant to evaluate and comment on the size and value of the estate to support their interlocutory applications.  It appears that they are going down the path of getting all the supporting documents of the accounts of the estate with an attempt to prepare their own audited financial statements to challenge the audited financial statements provided by the Administrator.  The Administrator complained that the Pangs were attempting to delay the proceedings by seeking discovery which was unnecessarily extensive and detailed.  He was concerned about the costs and delay which these interlocutory applications may occasion.  He argued that such extensive discovery was wasteful of the costs of the estate and amounted to an abuse of legal process.  He referred to the concern expressed by Madam Justice Au Yeung at a call over hearing on 11 January 2017 in a committal proceeding that public funds might be used inappropriately or disproportionally on all these applications and that the focus on the main issues may be lost.  On the other hand, the Pangs argued that these discoveries were necessary and relevant for determining the reasonable financial provision required for their maintenance and as evidence that the Deceased was likely to have so maintained them by reason of his wealth.  They explained that detailed discovery was sought because the Administratorwas evasive.  They alleged that the Administrator kept on delaying discovery, first by alleging that the documents ordered to be delivered were kept somewhere in China and eventually by alleging that they were all lost.  She referred to Madam Justice Chu’s adverse costs order against the Administrator made on 8 March 2017 for failing to provide the documents. 

10.  For the purpose of the present application, it is not necessary to make a finding as to who was responsible for the present state of affairs of these proceedings.  The above is mentioned by way of background.  The issue for this court is to make a case management decision so that these proceedings could be disposed of in the most cost-effective, proportionate and expeditious manner.

The legal principles

11.  The principles governing trial of issues of liabilities and issues ofquantum are conveniently summarized in Hong Kong Civil Procedure 2017[1].  The normal procedure is that liability and damages should be tried together.  However, Order 33, rule 3 gives the court discretion to order any question or issue arising in a cause or matter to be tried before, at or after the trial of the cause or matter.  This discretion is to be exercised only in exceptional cases where there is a clear line of demarcation between the issues of liability and quantum, and not where they interact upon each other.  See Pagoda Ventures Limited v JE Fulfilment Limited [2].  Another requirement which justifies the departure from the general rule is that it must be just and convenient to both parties to have the two issues tried separately. See: Wincheer Investments Ltd v Lobley Co Ltd [3]and Coenen v Payne [4]and Telford Development Ltd v Shui On Construction Co Ltd [5].  “Just” means fair to both sides, without one side suffering an undue disadvantage or the other gaining an undue advantage by a separate trial.  “Convenient” means convenient to both sides and advantageous from the point of view of costs.  The party who seeks a departure from the general rule bears the burden of proof that the issues of liability and quantum are clearly demarcated and that it is just and convenient to try these issues separately.  In Mai Gou v Mak Chik Lun [6], the Court of Appeal re-emphasized that the general rule should be followed and that the courts should be extremely cautious before acceding to pleas for an order for separate trial.  

1^st issue—Whether Po Yuen is a natural daughter of the Deceased

12.  The first issue of liability raised by the Administrator is whether Po Yuen is a natural daughter of the Deceased.  Mr Wong, counsel for the Pangs has no objection that this issue should be tried first.  The evidence in respect of this issue was completed as early as June 2015.  This is the sole issue in HCMP 1400/2014 and HCMP 1455/2014.  It is entirely distinct, independent and separate from the other issues in HCMP 445/2015.  Mr Wong also suggested that these two summonses should be fixed for trial.  I agree.

13.  This issue, whatever the outcome, has a bearing in HCMP 455/2015.  It is well demarcated from the issue of liability.  If Po Yuen is found to be a natural child of the Deceased, she will be a beneficiary and entitled as of right to a share of the estate pursuant to the Intestates’ Estates Ordinance.  Her maintenance claim under the Ordinance would become simpler.  However, resolving that issue one way or the other would not assist the resolution of Pang’s claim.  A separate trial of this issue wouldnot be unjust but will not make it any more convenient for both parties.  It is a neutral factor. If it has anything to add to the weighing pan, it is probably a negative factor against a departure from the general rule.

2^nd issue—Whether Pang and Po Yuen are genuine dependents

14.  The second issue of liability as framed by the Administrator is ambiguous.  Po Yuen’s claim is based on section 3(1)(v) of the Ordinance, ie an infant child of the Deceased; while Pang’s claim is based on section 3(1)(ix), ie any person who immediately before the death of the Deceased was being maintained, either wholly or substantially by the Deceased.  In other words, Po Yuen’s claim is based on blood relationship and not on dependency, while Pang’s claim is based solely on dependency.  Mr Wong submitted that the Ordinance does not impose any additional requirement of proving that an applicant under the Ordinance is a “genuine” dependent.  Of course, a claimant must prove he or she has a genuine claim under one ofthe heads specified in section 3(1).  The issue as framed by the Administrator was ambiguous and asked for argument.

15.  Mr Lau, counsel for the Administrator, has no misunderstanding that Pang’s and Po Yuen’s claims are made under section 3(1)(v) and (ix).  However, he argued as against Po Yuen, that proof of blood relationship is not enough because under section 3(1)(v) only an infant child has locus standi to make a claim.  That was one aspect of what Mr Lau meant by “genuine dependent” as applicable to Po Yuen.  He further argued that “infant” normally referred to new-born baby or someone before he or she could walk.  He submitted that as Po Yuen was more than three years old by the time of the application, he queried if she was entitled to claim as an “infant child” under section 3(1)(v).  With respect, such argument is amateurish. In law, an infant means a person who is not of full age and capacity, ie a minor as opposed to an adult.  In section 3(1)(vi), the term “adult child” is used. Elsewhere in the Ordinance, the word “child” simpliciter is used without the additional description of infant or adult.  Thus, age has no bearing on the meaning of the word “child” in this context.   A person who has children of his own never ceases to be a child with reference to his father.  Thus, Po Yuen, until she reached the age of majority, is an “infant child” within the meaning of section 3(1)(v).  The only question is whether she is a natural child of the Deceased.  That is the same question under the first issue of liability. 

16.  If Po Yuen is not a natural child of the Deceased, the next question is whether she and/or Pang can claim as dependents under section 3(1)(ix) of the Ordinance, ie as persons being wholly or substantially maintained by the Deceased.  It was Pang’s evidence that she had told the Deceased that Po Yuen was his natural daughter.  Hence, Mr Lau argued that had the Deceased known that Po Yuen was not his natural daughter, he would not have maintained Po Yuen and Pang.  It was in this context that Mr Lau argued that the Pangs are not “genuine dependents” of the Deceased.  He submitted that the real question is whether in making a dependency claim under the Ordinance the Pangs can rely on Pang’s misrepresentations to the Deceased.  He submitted that though the term “genuine dependent” is not used in the Ordinance, that does not mean the Administrator’s argument is bad in law and the court must read the Ordinance in its proper context and if necessary bring in the doctrine of equity in construing the Ordinance.  He argued that the court should not allow anyone to benefit from her own wrong.  This is a legal argument, which is wholly separate and distinct from the issue of quantum.  

17.  The second issue as framed by the Administrator is ambiguous.  It could have been more explicitly drafted.  Understood in the light of Mr Lau’s submission, part of it, which is related to Po Yuen as an “infant child”, is wholly unarguable and overlaps with the first issue.  The rest of the second issue which is related to the Pangs’ claim as dependents raises a legal argument which is wholly separate and distinct from factual issues relating to quantum. But, like the first issue of liability, a separate trial of liability and quantum would not be unjust but will not make it any more convenient to both parties.  It is probably a neutral or mildly negative factor against separate trial.

3^rd issue—Whether Po Yuen and/or Pang were maintained by the Deceased ‌ and whether the Deceased had assumed responsibility towards them

18.  For reasons as explained in the previous subsection, this issue is a non-issue for Po Yuen unless she fails to prove that she is a natural child of the Deceased.  There are two sub-issues under this issue: first, whether the Pangs were wholly or substantially maintained by the Deceased; and second, whether the Deceased had assumed responsibility for their maintenance.  Mr Lau submitted that these two sub-issues are clearly liability issues which are wholly separate and distinct from issue of quantum.  Because of the ambiguous way in which the Administrator framed the second issue of liability, Mr Wong dealt with the first sub-issue above as if it was part of the second issue of liability.  For clarity, I did not deal with his argument under the second issue of liability and shall deal with it here.

19.  Mr Wong argued that section 5(1) required the court to have regard to seven categories of matters stated therein when dealing with both liability and quantum issues.  He specifically relied on the matter set out in paragraph (e), which is about the size and nature of the net estate of the deceased.  That subsection reads:

“ (1) Where an application is made for an order under section 4, the court shall, in determining whether the disposition of the deceased’s estate ‌… is such as to make reasonable financial provision for the applicant and, if the court considers that reasonable financial provision has not been made, in determining whether and in what manner it shall exercise its powers under that section, have regard to the following matters—

      …

      (e) the size and nature of the net estate of the deceased;

      ….”

On a plain reading of this subsection, the size and nature of the net estate is one of the matters which the court shall have regard to when determining, firstly, whether reasonable financial provision has been made for the dependent; and secondly, whether and how it shall exercise its power under section 4.  The first question for determination is a liability issue, while the second one is a quantum issue. Thus, evidence as to the size and nature of the Deceased’s net estate is relevant for both liability issue and quantum issues.  If a party has raised this matter for the court to consider in determining the liability issue, the court has no jurisdiction to disregard it.  Even on a separate trial on liability, apart from section 5(1)(e), the financial means of the Deceased before his death, the nature and size of his estate must have strong probative value on the question of whether and how he would, on the issue of quantum, maintain the Pangs; and whether, on the issue of liability, he had maintained them for years before his death.

20.  The Deceased was prima facie a man of means, running a number of decoration and design businesses and owning some landed property.  Pang believed he had substantial wealth of at least $35 million.  This is supported by evidence of the Deceased’s former personal assistant and accounts clerk.  It will therefore be advanced by the Pangs that the Deceased was a businessman of means who was able to maintain a mistress in China and did in fact maintain her and Po Yuen.  That will be disputed by the Administrator arguing that the Deceased’s estate was in debt to the extent of $20 million and it would be unlikely that the Deceased would and could have maintained them.  Mr Lau disagreed.  He submitted that the question is whether the Deceased did maintain the Pangs and not whether he could maintain them.  I think the two questions are really that segregated.  The answer to the latter question has an impact on the former.  It will also have an impact on the credibility of the Administrator.  Some evidence of the Deceased’s financial means, though not necessarily the size of his entire estate, is necessary.  I agree that evidence on quantum is intricately connected with evidence on liability.

21.  The evidence regarding the Deceased’s estate is not yet complete pending discovery and further applications to be taken out.  The Administrator accused the Pangs of adopting a delaying tactic by resisting this separate trial application and by seeking unnecessarily extensive and wasteful discovery which amounted to an abuse of legal process.  On the other hand, the Pangs alleged that detailed discovery was sought because of the uncooperative and evasive attitude of the Administrator.  I do not have to decide who was responsible for this state of affairs.  The Pangs were seeking maintenance. There could be no reason for them to delay the progress of the proceedings. Non-production of the documents ordered is now an undisputed fact.  The Pangs are entitled to rely on evidence as to thesize and nature of the net estate of the Deceased to advance their case and todiscredit the Administrator.  To require a separate trial on liability without such evidence would be unjust to the Pangs and would give the Administratoran unfair advantage.  Furthermore, if the Pangs succeed on the liability issue, much of the evidence adduced for the section 5(1)(e) issue would have to be repeated in the trial on quantum.  A separate trial would be inconvenient to both parties.   It is clearly not appropriate for this issue.

Conclusion

22.  The first and second issues of liability are separate and distinct from the issue of quantum.  A separate trial in respect of these issues would not be unjust but will not make it any more convenient to either party.  It is probably a neutral consideration.  If it has anything to add to the weighing pan, it is a negative factor against a departure from the general rule.  The evidence relating to third issue of liability is intricately connected with the issue of quantum.  Given the way the parties intended to present their case, a separate trial would be unjust to the Pangs and would give the Administrator and unfair advantage.  It would also be inconvenient to both parties.  For the above reasons, I refuse the application for split trial.  Also for the same reasons, I refuse the application to have the issue of liability determined as a preliminary issue.  I also make an order that the Administrator shall pay the costs of the applications and that the Pangs’ own costs shall be taxed in accordance with Legal Aid Regulations.

23.  Now that the evidence relating to HCMP 1400/2014 and HCMP 1455/2014 is complete.  The parties should set these summonses down for argument as soon as possible.  A determination of Po Yuen’s status under these summonses would simplify the resolution of HCMP 445/2015.