CHAN CHU WA AND ANOTHER v. CHAN CHAU FUNG, the administratrix of the estate of POON SIU CHUN, deceased AND OTHERS

HCMP 247/2025

[2025] HKCFI 5493

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 247 OF 2025

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J U D G M E N T

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A.  Introduction

1.  This is a dispute that has arisen in connection with the 1^st Defendant’s duties as the administratrix of the estate (the “Estate”) of her late mother, Madam Poon Sui Chun, deceased (the “Deceased”). This is, in truth, a sad case that has torn the Deceased’s family apart, with the 90-year-old family patriarch and husband of the Deceased (viz. the 2^nd Plaintiff or the “Father”) and his second daughter (viz. the 1^st Plaintiff) pitted against the 1^st Defendant (his eldest daughter) and two of his younger children (viz. the 2^nd and 3^rd Defendants).

2.  The Plaintiffs took out an originating summons on 14 February 2025 that principally sought the removal or termination of the 1^st Defendant’s appointment as the administratrix of the Estate and for a new administratrix to be appointed in her stead. The relief sought by the Plaintiffs in their originating summons is as follows:

(1)  An order of removal/termination of the 1^st Defendant’s appointment as administratrix of the Estate pursuant to s.33(3) of the Probate and Administration Ordinance (Cap 10) (“PAO”);

(2)  An order to appoint Ms Tse Man Shan, Anna, a professional accountant of HOF Advisory and Consulting Limited, or such other fit and proper person as this court may deem fit, as the new administratrix of the Estate;

(3)  The 1^st Defendant to render an account to the new Administratrix in respect of her dealings with the Estate and any assets therein forthwith;

(4)  Interim and final distribution of the Estate pursuant to the Intestate Estate Ordinance;

(5)  Damages, alternatively an inquiry to as to damages;

(6)  Interest;

(7)  Further or other relief that the court deems fit; and

(8)  Costs of these proceedings to be borne by the 1^st Defendant personally on an indemnity basis.[1]

B.  Background

3.  The 1^st Defendant is the oldest daughter of the Deceased and the 2^nd Plaintiff. The Deceased passed away intestate on 25 July 2018 and the 1^st Defendant was appointed as the administratrix of the Estate on 12 October 2021, pursuant to an order of Master Jack Wong dated 24 September 2020.

4.  The letters of administration dated 24 October 2021 were accompanied by a schedule of assets and liabilities of the Deceased dated 21 September 2018 and an additional schedule dated 17 December 2020. The Estate has been described by the Plaintiffs as “not humongous” with an estimated value of around HK$71 million. It was described on behalf of the 1^st Defendant at the hearing before me as “not very huge, but not minimal”. The Estate includes nine properties in the Sham Shui Po area as well as some HK$15 million in cash.

5.  There are seven beneficiaries of the Estate, consisting of the Father and his and the Deceased’s six children. The 1^st Defendant is one of the six children and is thus also a beneficiary. Of the six children, four of them are parties to this litigation whilst the other two are said to support the Plaintiffs. All six children are identified in the table below:

Child	Name	Age	Occupation
Eldest daughter	Chan Chau Fung (Administratrix) 1st Defendant	About 66	Housewife
Second daughter	Chan Chu Wa 1st Plaintiff	64	Housewife
Third daughter	Chan Yin Fun Alice 3rd Defendant	About 63	Housewife
Fourth son	Chan Wai Kin Not a party but supports the Plaintiffs	61	Unknown
Fifth daughter	Chan Yin Lui Not a party but supports the Plaintiffs	58	Housewife
Sixth son	Chan Wai On Eddie 2nd Defendant	About 54	Driver

6.  The Father, Mr Chan Kam He, ran a seal engraving business in Kowloon called “Chan Man Sculpture” until his retirement in 2018. There is disagreement as to the extent to which the Deceased also participated in the running of Chan Man Sculpture, but this is not material for the purposes of resolving the dispute before me. The 1^st Defendant says she has worked at Chan Man Sculpture (which she has described as the “family business”) from her younger days.

7.  As at the time of the Deceased’s passing the Estate consisted of the following assets:

(1)  Cash/cash at bank: HK$668,730.70;

(2)  Real properties (“Properties”):

(a)  Flat B on 1^st Floor, Cheung Fat Mansions, Nos. 10, 10A and 10B Cheung Fat Street, Nos. 366-372 Un Chau Street, Kowloon;

(b)  2^nd Floor, No. 473A Castle Peak Road, Kowloon (“2^nd Floor of 473A Castle Peak Road”);

(c)  Flat D on 22^nd Floor, Charming Garden, No. 638 Cheung Sha Wan Road, Kowloon, which was the matrimonial home of the Deceased and the Father and is currently used by the Father as his residence (the “Charming Garden Property”);

(d)  Shop No. 8 on the Ground Floor, Jade Heights, Nos. 482-492 Un Chau Street, Kowloon, which is currently used as a shop for Chan Man Sculpture (the “Shop”);

(e)  2^nd Floor, No. 276 Castle Peak Road, Kowloon;

(f)  Flat A on 15^th Floor, Florence Plaza (Phase I), No. 23 Cheung Wah Street, Kowloon (the “Florence Plaza Property”);

(g)  5^th Floor, No. 552 Fuk Wah Street, Kowloon (the “Fuk Wah Property”);

(h)  5^th Floor, No. 120 Camp Street, Kowloon; and

(i)  3^rd Floor, No. 316A Un Chau Street, Kowloon;

(3)  Rentals received from the Properties (except the Shop and the Charming Garden Property at which the Father currently resides); and

(4)  The business of Chan Man Sculpture.[2]

8.  So far as the Properties are concerned, save for the Shop, the Charming Garden Property and the Florence Plaza Property, the rest of the Properties are sub-divided into flats and rented out to tenants. The rental income received per annum for each sub-divided flat is about HK$40,000 to HK$50,000.

9.  Although the Estate initially consisted of nine properties, the following two were sold to the Urban Renewal Authority (“URA”) in December 2024 (the “URA Sale Properties”):

(1)  The Fuk Wah Property was sold for a total consideration of HK$5,517,000 (inclusive of allowances received from the URA).

(2)  2^nd Floor of 473A Castle Peak Road was sold for a total consideration of HK$10,531,600 (inclusive of allowances received from the URA).

10.  It is the Plaintiffs’ case that they were not informed of the sale of the URA Sale Properties and that they only came to learn of the sale from a land search which their solicitors conducted at the Land Registry.

11.  No distributions were made from the Estate and no accounts were rendered for a period of time after the 1^st Defendant’s appointment as administratrix on 12 October 2021. This led to the Plaintiffs commencing an earlier set of proceedings against the 1^st Defendant with the case reference HCAP No. 8 of 2024 (the “HCAP Action”). Pursuant to an order made by Winnie Tsui J in the HCAP Action on 24 January 2025, the 1^st Defendant was directed to file and serve an affirmation on her proposal of interim dividend within 56 days (i.e. by 21 March 2025).

12.  By way of another order made by Winnie Tsui J in the HCAP Action (also on 24 January 2025), the 1^st Defendant was ordered to render within 56 days (i.e. by 21 March 2025):

(1)  a true and perfect inventory and account of the Estate from the date of the death of the Deceased to the present;

(2)  a full and proper account of her dealings, payments and distributions in relation to the Estate; and

(3)  with supporting documents.

13.  There was a third order made by Winnie Tsui J on 24 January 2025, pursuant to which the HCAP Action was stayed pending the disposal of intended proceedings for, among other things, the removal of the 1^st Defendant as administratrix, save that the stay did not apply to the carrying out of the orders on the provision of an inventory and account and of a proposal for interim distribution. The Plaintiffs subsequently took out the originating summons which forms the subject of the present proceedings (i.e. HCMP 247/2025) on 14 February 2025.

14.  On 12 May 2025, an interim distribution of HK$2 million was made to the beneficiaries. This was the first and, to date, only distribution of the assets of the Estate. The interim distribution was paid to the seven beneficiaries in the following amounts:

No.	Child	Beneficiary	Amount (HK$)
1.	Father	Chan Kam He 2nd Plaintiff	1,250,000
2.	Eldest daughter	Chan Chau Fung (Administratrix) 1st Defendant	125,000
3.	Second daughter	Chan Chu Wa 1st Plaintiff	125,000
4.	Third daughter	Chan Yin Fun Alice 3rd Defendant	125,000
5.	Fourth son	Chan Wai Kin Not a party but said to support the Plaintiffs	125,000
6.	Fifth daughter	Chan Yin Lui Not a party but said to support the Plaintiffs	125,000
7.	Sixth son	Chan Wai On Eddie 2nd Defendant	125,000
Total of interim distribution			2,000,000

15.  On 20 June 2025, an updated account was rendered by the 1^st Defendant. There is a dispute as to whether what was provided constituted a full and proper account of the assets of the Estate.

16.  In terms of the evidence that was filed in these proceedings, the 1^st Plaintiff and the 2^nd Plaintiff (i.e. the Father) filed affirmations dated 13 February 2025 and 21 February 2025 respectively. The 1^st Defendant filed an affirmation on 2 July 2025. The 2^nd Plaintiff (i.e. the Father) filed a second affirmation dated 29 July 2025.

17.  Neither the 2^nd nor 3^rd Defendants filed any affirmations. However, the 1^st Defendant says in her affirmation that she believes that the 2^nd and 3^rd Defendants support her continuation as administratrix and, to that end, a handwritten letter from the 2^nd Defendant was exhibited to the 1^st Defendant’s affirmation.

18.  As for the beneficiaries who are not parties to these proceedings, the 1^st Plaintiff states in her affirmation that Mr Chan Wai Kin (the fourth son) and Ms Chan Yin Lui (the fifth daughter) support the Plaintiffs’ applications. Signed written consents from these two beneficiaries were exhibited to the 1^st Plaintiff’s affirmation.

C.  Applicable Legal Principles

(1)  Removal of an administrator

19.  The starting point of any analysis is s.33(3) PAO, which grants the court the power to order a removal of an executor or administrator in these terms:

“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.”

20.  The legal principles applicable to the exercise by the court of its discretionary power under s.33(3) PAO were surveyed in a number of earlier decisions and can be distilled as follows:

(1)  The overriding consideration is the interest and welfare of the beneficiaries, and the question is what is necessary or required for the due and proper administration of the estate.[3]

(2)  The exercise of the power to remove is a discretionary exercise that involves an assessment and value judgment, taking all relevant circumstances into account.[4] Such circumstances include the size of the estate and the nature of the assets that are being administered.[5]

(3)  It is not every mistake or neglect of duty, or inaccuracy or misconduct, which will induce a court to remove an administrator. The acts or omission must be such as to endanger the trust property or to show a want of proper capacity to execute the duties, or a want of reasonable fidelity.[6]

(4)  Where allegations of misconduct were raised but were held not to have been made out, or were greatly exaggerated, such that the administrator was justified in resisting them (and the court might consider that in its decision on costs), the administrator might yet be removed if the court were satisfied that the continuance of the administrator would prevent the administration being properly carried out.[7]

(5)  It is not necessary to establish specific wrongdoing, misconduct or fault, but obviously they are relevant considerations if established.[8] The fact that the administration could have been done better is not of itself a sufficient ground for removal.[9] The sincerity and intention of the administrator in performing his obligations would be taken into account by the court.[10]

(6)  The duty to render a full and proper account when called upon to do so is a fundamental and important duty, and a failure to do so may, in appropriate circumstances, be a good reason to justify removal.[11] Delay in providing an account does not automatically call for removal and whether or not removal is to be ordered depends on the circumstances of the case.[12]

(7)  For the purposes of rendering a full and proper account of the estate, an administrator is required to:[13]

(a)  show the opening balance (including capital assets) and closing balance;

(b)  give details of movement of assets, incomes and expenditure of the estate;

(c)  give details of the whereabouts of all properties (including cash) of the estate which the administrator is duty bound to administer; and

(d)  support the account with documentary evidence.

(8)  It is the administrator’s duty to gather and distribute assets of the estate to the beneficiaries.[14] One of the key objectives of an administration is for the assets of the estate to be distributed as expeditiously and economically as is possible.[15] It thus follows that substantial delay in the completion of the administration may constitute a ground for removal.[16]

(9)  Hostility between the administrator and the beneficiaries is not a ground for removal, 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 carried out or completed.[17] Where the hostility or friction is grounded on the mode or way the estate has been administered, it is certainly not to be disregarded.[18]

21.  Where a beneficiary has sought to advance a removal application on a number of different grounds, what matters more is the quality of the complaints that have made, rather than their quantity. This stacks up with the fact that there may be occasions when a single ground of complaint is of such seriousness as to necessitate an order for removal and, conversely, there may be other occasions when a myriad of complaints would, taken collectively, be insufficient to justify an order for removal. A holistic approach should be adopted.

22.  In so far that the complaint relates to a failure by the administrator to render a full and proper account, the circumstances which a court would be entitled to take into account in deciding whether to order removal include: (a) the number of occasions on which demands for an account were made but were unmet; (b) the length of time which elapsed before an account was rendered; and (c) the extent to which the account, when finally rendered, was materially deficient (if at all).

(2)  Relief that can be sought in relation to an administration

23.  Pursuant to O.85, r.2(3) of the Rules of the High Court (Cap 4A) (“RHC”), an action may be brought for any of the following heads of relief (among others):

(1)  an order requiring an executor, administrator or trustee to furnish and, if necessary, verify accounts (O.85, r.2(3)(a) of RHC);

(2)  an order requiring the payment into court of money held by a person in his capacity as executor, administrator or trustee (O.85, r.2(3)(b) of RHC);

(3)  an order directing a person to do or abstain from doing a particular act in his capacity as executor, administrator or trustee (O.85, r.2(3)(c) of RHC);

(4)  an order approving any sale, purchase, compromise or other transaction by a person in his capacity as executor, administrator or trustee (O.85, r.2(3)(d) of RHC); and

(5)  an order directing any act to be done in the administration of the estate of a deceased person or in the execution of a trust which the court could order to be done if the estate or trust were being administered or executed, as the case may be, under the direction of the court (O.85, r.2(3)(e) of RHC).

(3)  Costs of administration proceedings

24.  The relevant principles governing the award of costs in administration proceedings are well-established. They are distilled in Cheuk Lai Mau v Cheuk Lai Sheung [2020] HKCFI 2813 at [8]-[9], per DHCJ Victor Dawes SC (as he then was):

“8. The relevant principles governing the award of costs in administration proceedings are well-established. As summarised in Chiu Pak Wo v Chiu Yim Kam [2019] HKCFI 2517, HCMP 1967/2018 (unrep, 16 Oct 2019) at §5-12:

(1) The starting point is Order 62 rule 3(2) of the Rules of the High Court (‘RHC’), which sets out the general rule that costs shall follow the event.

(2) As an exception to the general rule in trust and probate matters, where administration proceedings are properly instituted (whether by the executor or a beneficiary) for benefit of the fund or the deceased’s estate, the Court may in an appropriate case make an order that costs incurred by all necessary parties be taxed as between solicitor and client and borne by the fund or estate: Re Buckton [1907] 2 Ch 406 at 414-415 (Kekewich J).

(3) However, there must be distinguished from the above a class of cases where the application to the Court is made by a beneficiary and is in substance an adverse claim made in hostile litigation. In such a case, the usual approach to costs in hostile litigation should be applied: Re Buckton, 415.

(4) As far as costs of the executor are concerned, the relevant provision of the RHC is Order 62 rule 6(2), which provides that:

‘Where a person is or has been a party to any proceedings in the capacity of trustee, personal representative or mortgagee, he shall, unless the Court otherwise orders, be entitled to the costs of those proceedings, in so far as they are not recovered from or paid by any other person, out of the fund held by the trustee or personal representative or the mortgaged property, as the case may be; and the Court may otherwise order only on the ground that the trustee, personal representative or mortgagee has acted unreasonably or, in the case of a trustee or personal representative, has in substance acted for his own benefit rather than for the benefit of the fund’

(5) This gives effect to the general rule that a trustee is entitled to an indemnity out of the trust fund for all costs and expenses properly incurred by him in connection with the performance of his duties and exercise of his powers and discretions as a trustee: Lewin on Trusts (20^th ed) §48-004.

(6) ‘Properly incurred’ means costs which have both honestly and reasonably incurred. Any doubts are to be resolved in favour of the trustee: Lewin §48-006.

(7) That said, the right of indemnity can be lost or curtailed by such inequitable conduct on the part of the trustee as amounts to a violation or culpable neglect of his duty as trustee. The word ‘misconduct’ should be widely construed and may include caprice and obstinacy, or neglect, negligence or carelessness, or even conduct which is unreasonable in the circumstances. While the mere fact that the trustee has made a mistake is not enough, it is equally clear that dishonesty is not requisite: Lewin §48-006.

9. The parties agreed that the present proceedings involved an adverse claim in hostile proceedings (a ‘category 3’ case in the Re Buckton taxonomy). As such, it is necessary to ascertain whether P or D was the substantially successful party in these proceedings. In so doing, the Court is guided by the principles set out by Au Yeung J in Famous Marvel Co Ltd v Conversant Group Ltd HCA 2153/2009 (unrep, 29 Oct 2012):

(1) The Court is to decide if the party seeking costs has substantially obtained the relief sought in the litigation.

(2) At each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the positions will, in differing degrees, be less clear. How far the Court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties.

(3) A broad brush can be taken by referring to all matters already laid before the Court, eg pleadings, correspondence, witness statements, transcripts of evidence and the terms of the settlement order.

(4) The objective is to ‘do justice between the parties without incurring unnecessary Court time and consequently additional costs’.”

D.  Removal/Termination of Administratrix and Appointment of New Administratrix

25.  In considering whether or not to accede to the Defendants’ application, I remind myself that the threshold of which I have to be satisfied is whether removal is necessary or required for the due and proper administration of the Estate and whether removal would be in the interests of the beneficiaries. The bar is accordingly set high, and rightly so, as the power to order a removal of an administrator is not a power that is to be exercised lightly.

26.  So far as the present case is concerned, I have considered all the grounds of complaint by the Plaintiffs holistically and I am satisfied that an order for the removal of the 1^st Defendant as administratrix is not only necessary for the due and proper administration of the Estate, but it is in the interests of the beneficiaries for the 1^st Defendant to be replaced as administratrix. I have come to this view despite the Estate being “not humongous” (to borrow the Plaintiffs’ expression).

27.  The grounds for my decision are principally fourfold, each of which essentially falls into one of two categories, namely: (a) what the 1^st Defendant should have done as administratrix (but which she failed to do); and (b) what the 1^st Defendant did as administratrix (but which she ought not to have done). The 1^st Defendant’s failings in both respects are serious and demonstrate unfitness on her part to execute the duties of an administratrix. They leave me with little doubt that it would be necessary for her to be replaced as administratrix and that it would be in the beneficiaries’ interests for her to be removed.

28.  The four grounds on which I rely in ordering the 1^st Defendant’s removal as administratrix are discussed below and relate to: (a) the failure to render a full and proper account when called upon to do so (paragraphs 30 to 42 below); (b) the circumstances surrounding the acquisition of a so-called ancestral home (paragraphs 43 to 59 below); and (c) the circumstances surrounding the placement of monies in time deposits (paragraphs 60 to 66 below); and (d) the hostility between the 1^st Defendant and the majority beneficiaries (paragraphs 72 to 75 below).

29.  I also discuss below: (e) the complaints made by the Plaintiffs in relation to the Chan Man Sculpture (paragraphs 67 to 71 below); (f) the relevance of the characteristics of the beneficiaries in assessing whether to order the 1^st Defendant’s removal as administratrix (paragraphs 76 to 81 below); and (g) the appointment of a replacement administratrix (paragraphs 82 to 85 below).

(1)  Failure to render a full and proper account

30.  The 1^st Defendant was in breach of her duty to render a full and proper account when called upon to do so, despite this being a fundamental cornerstone of her duty as an administratrix.

31.  The first occasion on which a demand for an account was made was by way of a pair of letters dated 4 November 2022, sent by the Plaintiffs’ solicitors, Messrs Victor Yeung & Co (“VY & Co”), to the 1^st Defendant’s solicitors, Messrs Zebra H.Y. Kwan & Partners (“ZK & Partners”). Specific caution was sounded in the one of those letters to the need for delay to be avoided due to the 2^nd Plaintiff’s advanced age: “No doubt your client is aware that our client is of advanced age, now 87, and no further delay will be tolerated”.

32.  ZK & Partners responded on 19 November 2022 to deny allegations that were made in VY & Co’s letters and an account was subsequently rendered under cover of a further letter dated 12 December 2022. Further and extensive correspondence was exchanged between both firms of solicitors throughout 2023 and eventually culminated in the HCAP Action brought by the Plaintiffs (referred to in paragraphs 11 to 13 above).

33.  On 29 November 2024, VY & Co wrote to ZK & Partners to ask for an account. The circumstances which led to the letter of 29 November 2024 being sent by VY & Co is important:

(1)  As the letter made plain, the trigger for the request for an account was the discovery by the Plaintiffs of the sale of the URA Sale Properties, of which the Plaintiffs say they were not informed. The Plaintiffs went on to make the point that they had discovered the existence of the sale through searches of the Land Registry.

(2)  The letter then proceeded to set out the Plaintiffs’ understanding that substantial allowances were payable by the URA (in addition to the sale proceeds) but that the 1^st Defendant had “never disclosed [this] information to our clients being the majority beneficiaries”.

(3)  The letter ended with a demand that the 1^st Defendant “[r]ender the relevant accounts and account for all sale proceeds, interest and allowance received [from] the [sale of the URA Properties]” and for an immediate distribution of those sale proceeds. The Plaintiffs demanded that an account be rendered within seven days from the date of the letter.

34.  No account was provided by the 1^st Defendant in response to this letter, whether within seven days as demanded. Indeed, the 1^st Defendant never responded to VY & Co’s letter of 29 November 2024. No explanation was provided in the 1^st Defendant’s affirmation as to why neither she nor ZK & Partners failed to respond to VY & Co.

35.  As it turns out, the evidence which emerged in the course of these proceedings shows that sale and purchase agreements for the two URA Sale Properties were entered into a year earlier, on 31 October 2023. The sales were subsequently completed on 1 December 2023, i.e. one year before VY & Co’s letter of 29 November 2024 was sent. The sale proceeds and the URA allowances were paid to the 1^st Defendant (in her capacity as administratrix) following completion of the sales.

36.  All of this would have presented an opportune moment for an account that reflects the sale proceeds to be rendered, especially in circumstances where the Plaintiffs had not only asked for an account, but specifically asked for one which reflected the sale proceeds and the URA allowances. I consider it a serious failing on the 1^st Defendant’s part as administratrix that she failed to do so.

37.  This was all rendered more egregious by how the sale proceeds and URA allowances were subsequently dealt with by the 1^st Defendant, which I discuss in paragraphs 43 to 59 below.

38.  VY & Co’s letter of 29 November 2024 was followed by further correspondence on 4 December 2024, 5 December 2024, 6 December 2024 (two letters sent on this date) and 7 December 2024, containing further demands for an account and/or requesting further information. VY & Co’s letter of 7 December 2024 specifically asked for the account supplied in 2022 to be rectified. However, it was not until several months later, on 20 June 2025, that the 1^st Defendant finally rendered an updated account.

39.  At the hearing, I explored with counsel for the Defendants, Mr Richard Leung, the reason for the six-month delay between the demand made by VY & Co on 29 November 2024 for an account and the provision of the updated account on 20 June 2025. Mr Leung suggested that it may have been due to the stress and pressure of the HCAP Action, which was on foot in that period. However, Mr Leung fairly accepted that this was not a point that was covered by the 1^st Defendant in her affirmation. Quite apart from this, I do not accept that the supposed stress of any ongoing litigation can legitimately be relied on to excuse an administratrix from rendering an account for up to half a year.

40.  Matters were compounded by the fact that the updated account that was rendered on 20 June 2025 fell short of what could properly be regarded as a full and proper account of the Estate, in that they:

(1)  lacked details on the movement of assets;

(2)  failed to provide details of the whereabouts of the cash assets; and

(3)  was not accompanied by supporting documents in relation to various heads of expenditure.

41.  The absence of supporting documents compounded matters in circumstances where there were disputes about specific items of expenditure in the updated account that was rendered, including HK$1,180,000 in medical expenses said to have been incurred in relation to the Deceased, as well as HK$38,500 by way of “2018-2024 年貓支出” (i.e. cat expenses), notwithstanding it being the 2^nd Plaintiff’s affirmation evidence that the Deceased did not own any cats whilst she was alive.[19]

42.  Taking all the relevant circumstances into account, I find that the 1^st Defendant’s failure to render a full and proper account in response to the Plaintiffs’ demand of 29 November 2024 above is, in and of itself, sufficiently serious to justify an order for removal: see paragraphs 20(6) and 20(7) above and the authorities cited therein. However, there were other developments which serve to reinforce the view I have reached that the 1^st Defendant is incapable of executing her duties as administratrix and that it would thus be necessary for her to be replaced, so as to allow the Estate to be properly administered.

(2)  Acquisition of the so-called Ancestral Home

43.  Another serious lapse by the 1^st Defendant in the discharge of her duties as administratrix concerns the manner in which the 1^st Defenfant dealt with the sale proceeds and URA allowances in relation to the URA Sale Properties, i.e. the Fuk Wah Property and 2^nd Floor of 473A Castle Peak Road:

(1)  The URA Sale Properties were sold for a total consideration of HK$16,048,600 (inclusive of URA allowances): (a) the Fuk Wah Property was sold for HK$5,517,000 (inclusive of URA allowances); and (b) 2^nd Floor of 473A Castle Peak Road was sold for HK$10,531,600 (inclusive of URA allowances).

(2)  The URA allowances paid upon completion were themselves fairly substantial and amounted to a total of HK$6,133,600 across both URA Sales Properties.

44.  A significant portion of the sale proceeds inclusive of URA allowances (HK$11,500,000 out of HK$16,048,600) was applied towards the purchase of a four-bedroomed property that was described by the 1^st Defendant in her affirmation as an “ancestral home for the families of the Deceased in the future”.[20] The address of the so-called ancestral home is Flat B, 37^th Floor, Beacon Lodge, No. 373 Po On Road, Kowloon (the “Ancestral Home”).

45.  The description of this property as an “ancestral home” is somewhat of a misnomer as it is a new property, as opposed to one that belonged to the family’s ancestors. The notion that it is an “ancestral home for the families of the Deceased” is just as inapt, given that there is no evidence that the Plaintiffs were either informed of the purchase of this property, or of the fact that the funds to do so had come from the disposal of the URA Sale Properties (of which, as mentioned above, the Plaintiffs were not told either at the time).

46.  Matters are not helped by the fact that the Ancestral Home is not registered in the name of the Estate, but is registered instead in the names of the 1^st and 3^rd Defendants as tenants in common (with the 1^st Defendant holding a 60% share and the 3^rd Defendant holding a 40% share). The 1^st Defendant has sought to explain this away on the basis that it was “because of the conveyancing complexity of getting estate/administration issues involved”. No details were provided as to what these “estate/administration issues” were. I consider the 1^st Defendant’s explanation to be wholly unsatisfactory.

47.  Indeed, it since transpires that the Ancestral Home is occupied by the 1^st Defendant and her younger sister, the 3^rd Defendant. It is not only the address supplied by the 1^st Defendant in her affirmation, but is also given as the address of for both the 1^st and 3^rd Defendants in the agreement for the sale and purchase of the Ancestral Home.

48.  The Plaintiffs go so far as to contend that the purchase of the Ancestral Home registered in the names of the 1^st and 3^rd Defendants constitutes misappropriation and conversion of assets belonging to the Estate. However, I am not prepared to conclude that there was misappropriation, for the reason that irrespective of the identity of the persons to whom legal title of the Ancestral Home was registered, the property was ultimately beneficially owned by the Estate (as the 1^st Defendant readily accepted in her affirmation).

49.  Notwithstanding that there could not be said to be misappropriation or conversion, I am nevertheless of the view that the circumstances surrounding the acquisition of the Ancestral Home in and of themselves justify the removal of the 1^st Defendant as administratrix.

50.  To begin with, the point has been made in paragraph 20(8) above that one of the key objectives of an administration is for the assets of the estate to be distributed as expeditiously and economically as is possible. That appears not to have occurred in this case, in circumstances where the 1^st Defendant was appointed as administratrix four years ago in 2021 and there has only been one modest distribution of assets to date.

51.  The 1^st Defendant points to the present state of the property market and the fact that the Estate consists of old properties to explain why she has been unable to sell the properties in the Estate’s portfolio. The 1^st Defendant goes so far as to say that “if I sell the Properties now, especially in this difficult economic climate, the beneficiaries of the Estate will suffer.”

52.  However, this is belied by the fact that when two properties were ultimately sold (namely the URA Sale Properties), rather than distribute the sale proceeds (and indeed the URA allowances) received in respect thereof, the 1^st Defendant chose instead to reinvest most of those sale proceeds in purchasing the Ancestral Home in which it would seem only the 1^st and 3^rd Defendants were the only ones who really benefited.

53.  Notwithstanding the 1^st Defendant’s assertion to the contrary, there is no evidence to support the notion that it was the Deceased’s intention for an ancestral or communal family home to be purchased. The Father (who is the Deceased’s husband) says in his affirmation that the Deceased never expressed any such intention to him.[21]

54.  The 1^st Defendant says that “all family members and extended family members of the Deceased are welcome to gather and stay in the Ancestral Home”.[22]The 1^st Defendant’s affirmation goes so far as to say that “the Deceased always wished to provide a residence for me and for every child, grandchild and descendant to be united, with a place to gather happily with such place funded and maintained by the Deceased”.[23]However, I consider it telling that neither of the Plaintiffs nor the beneficiaries aligned with them appear to have been told about the purchase of the Ancestral Home ahead of time or shortly thereafter. If it were indeed the case that the 1^st Defendant was simply carrying out her late mother’s wishes, I would have expected the 1^st Defendant to have informed the rest of the family and to extend the use of the Ancestral Home to them too.

55.  To this, the 1^st Defendant tried to make something of the fact that the 1^st Plaintiff’s son ostensibly occupied one of the bedrooms at the Ancestral Home. However, this is an assertion that is unsupported by corroborating evidence. Even if the 1^st Plaintiff’s son did occupy one of the bedrooms, it does not necessarily follow that the acquisition of the Ancestral Home was in accordance with the Deceased’s wishes and, taking everything into account, I reject the assertion that it was.

56.  In any event, given that the Ancestral Home was acquired by 1 August 2024 (which is the date on which the 1^st and 3^rd Defendants’ title in the property was registered with the Land Registry), if there was any truth in the 1^st Defendant’s case concerning the purchase of the Ancestral Home, the obvious thing for her to have done is to render an account shortly after 1 August 2024 that reflects the sale of the URA Sale Properties and which makes clear that part of the proceeds therefrom had been applied towards the purchase of the Ancestral Home, and to distribute the remainder of the monies received from the URA to the beneficiaries.

57.  The failure on the 1^st Defendant’s part to account for the purchase of the Ancestral Home is very concerning, given that VY & Co wrote to ZK & Partners to ask about this purchase by way of a letter dated 2 December 2024. The letter pointedly asked the following questions in respect of the new acquisition:

“We are instructed by our clients to enquire on the following matter:

1. The source of the purchase price.

2. Whether the purchase price or the New Property forms part of the estate.”

58.  I find it astonishing that there was no answer to this letter. No explanation has been offered for the 1^st Defendant for this radio silence. The suggestion now being advanced by the 1^st Defendant that this new property was intended as an Ancestral Home to which all members of the Deceased’s extended family were welcome and as “a place to gather happily”[24] is one which I have no hesitation in rejecting.

59.  To recap, the circumstances surrounding the acquisition of the Ancestral Home are such that they have led me to conclude that it is another instance of a serious dereliction of duty on the 1^st Defendant’s part as administratrix that justifies, indeed necessitates, her removal.

(3)  The circumstances surrounding the placement of monies in time deposits

60.  During the course of the proceedings, it emerged that the 1^st Defendant had placed cash amounting to HK$5,318,448.93 in time deposits with the Bank of China (Hong Kong) Ltd, as follows:

No.	Start date	Principal (HK$)	Length	Maturity date	Amount at maturity (HK$)
1.	6 May 2025	2,546,356.16	92 days	6 August 2025	2,566,252.62
2.	20 May 2025	1,540,428.37	92 days	20 August 2025	1,548,193.82
3.	5 June 2025	1,231,664.40	183 days	5 December 2025	1,238,457.11
Total		5,318,448.93			5,352,903.55

61.  The 1^st Defendant justified what she had done in her affirmation in these terms:[25]

“As there are periods the interest rates offered by the banks were high, pending distribution of the assets of the Estate, I used part of such cash balance of the Estate for placing in time-deposit accounts to keep the value of the Estate and/or increase the value of the Estate by earning interest.”

62.  There is nothing objectionable in principle about the placement of cash in time deposit accounts, pending distribution of an estate’s assets. However, what the 1^st Defendant did not refer to in her affirmation is the fact that the first of the three time deposits were placed in her own name (as opposed to in the name of the Estate), and that the second and third time deposits were placed jointly in the names of the 1^st Defendant and her brother, the 2^nd Defendant (as opposed to in the name of the Estate).

63.  On behalf of the 1^st Defendant, Mr Leung sought to parry the criticism that the way in which the 1^st Defendant had gone about placing the time deposits as constituting misappropriation on the basis that the time deposits were placed in the name of the two beneficiaries (i.e. the 1^st and 2^nd Defendants) and that this constitutes a form of check and balance, in that at least one other beneficiary (i.e. other than the 1^st Defendant who, of course, is also a beneficiary) is aware of the placement of the time deposits.

64.  In response to a question I posed as to why the time deposits were not placed in the names of all the beneficiaries, Mr Leung submitted that this would give rise to complexity and that the right balance was struck by having the deposits placed in the names of two (as opposed to three, four or more) beneficiaries.

65.  Quite apart from the fact that none of the explanation that Mr Leung gave is to be found in the 1^st Defendant’s affirmation (although in fairness to Mr Leung, he was entirely candid that this was the case) and there would thus be no evidential basis for concluding that this modus operandi accorded with what the 1^st Defendant was seeking to achieve, even if I were to accept Mr Leung’s submissions at face value and, in particular, the check-and-balance theory he advances, it nonetheless fails to explain why the first of the three time deposits placed on 6 May 2025 (which is incidentally the largest in amount, viz. HK$2,546,356.16) was placed in the 1^st Defendant’s name alone.

66.  Notwithstanding all of this, although it was wrong of the 1^st Defendant to place time deposits in her own name (viz. the first time deposit placed on 6 May 2025) and in her and the 2^nd Defendant’s joint names (viz. the second and third time deposits placed on 20 May 2025 and 5 June 2025), I do not consider what has been done to amount to misappropriation or conversion of assets belonging to the Estate as the monies continue to be available to the Estate. That said, it nonetheless constitutes conduct of the kind which reinforces the view that the 1^st Defendant is ill-suited to continue as administratrix.

(4)  Chan Man Sculpture and the Shop

67.  There was a separate issue as to whether the 1^st Defendant placed herself in a position of conflict of interest by failing to collect any rent in respect of the Shop, from where Chan Man Sculpture has operated and continues to operate. The 1^st Defendant’s affirmation evidence is that Chan Man Sculpture is, at present, a loss-making business.[26] There appears to be no dispute that no rent is collected on the Shop, but this is due to the fact that Chan Man Sculpture continues to be treated by the 1^st Defendant as a family business and that it thus continues to form part of the Estate.

68.  The Father disputes this and describes Chan Man Sculpture as having been taken over by the 1^st Defendant (albeit allegedly without the family’s consent) and the business thus belongs to her. However, there is insufficient material before me to decide whether or not Chan Man Sculpture remains the family business, although I note it was listed as an asset of the Estate in the Additional Schedule of Assets and Liabilities of the Deceased dated 17 December 2020 included with the letters of administration dated 12 October 2021, pursuant to which the 1^st Defendant was appointed as administratrix.

69.  On the other hand, there is evidence of a business registration application for Chan Man Sculpture dated 12 September 2018 (shortly after the Deceased passed away) that was submitted by the 1^st Defendant as applicant. There was no explanation in the evidence that was filed as to the circumstances which led to this business registration application being filed or how it ties in, timing-wise, with the Deceased’s passing (if at all).

70.  To complicate matters, the Father has expressly reserved his right to take action against the 1^st Defendant for what he describes as a misappropriation of intellectual property rights in relation to Chan Man Sculpture.

71.  Given the other findings I have reached on other matters for the purpose of deciding the applications before me, I do not consider it necessary to reach a concluded view on whether Chan Man Sculpture is, in fact, the 1^st Defendant’s business. Indeed, given that there is a prospect of an action by the Father for infringement of intellectual property rights in connection with Chan Man Sculpture (which would be predicated on the premise that Chan Man Sculpture has been taken over by the 1^st Defendant), it would be prudent for me to say no more on this topic in this judgment. To be clear, I do not rely on the complaints made by the Plaintiffs in relation to Chan Man Sculpture and the Shop as a basis for ordering the 1^st Defendant’s removal as administratrix.

(5)  Hostility with the majority beneficiaries

72.  There is a further factor that lends additional force to my view that the 1^st Defendant’s removal as administratrix is necessary. There is such hostility between the 1^st Defendant and the beneficiaries in the Plaintiffs’ camp (who, between them, are entitled to 75% share of the Estate) that it would make it difficult or impossible for the administration to be completed.

73.  The breakdown in relations between the 1^st Defendant on the one hand, and the Plaintiffs’ camp (i.e. the majority beneficiaries) on the other, is evident from the personal and vicious nature of the attacks traded by both sides in the course of these proceedings. Some of these attacks are, in truth, of little or no relevance to the administration of the Estate and are to do instead with feuds of a familial nature. Allowing the 1^st Defendant to continue in her role as administratrix would, in my view, serve only to impede rather than progress the proper administration of the Estate.

74.  The hostility or friction between the 1^st Defendant and the majority beneficiaries is especially relevant given that a considerable part of it turns on the way in which the Estate has been administered by the 1^st Defendant to date.[27]

75.  In addition, there is a dispute as to whether the 1^st Defendant had unlawfully removed cash and jewellery belonging to the Deceased from the safe of the Charming Garden Property on the day the Deceased passed away. There is insufficient material at present to allow me to get to the bottom of this dispute, but it is a matter which ought to be investigated by the administratrix of the Estate. It goes without saying that there would be a conflict of interest were the 1^st Defendant tasked with conducting this investigation. This is therefore a yet further reason for ordering the 1^st Defendant’s replacement as administratrix.

(6)   Characteristics of the beneficiaries concerned

76.  The emphasis placed by the case law on removal applications is on the interests and welfare of the beneficiaries: see paragraph 20(1) above. The question as to whether an order for removal is in the beneficiaries’ interest is a fact-sensitive exercise that takes into account, among other things, the characteristics of the beneficiaries concerned.

77.  One of the features of this case which stands out to me is the fact that one of the principal beneficiaries to the Estate is the Father. He is the surviving husband of the Deceased and is thus, as a matter of law, entitled to around 50% of the residuary Estate (and thus its largest share). Section 4(3) of the Intestates’ Estates Ordinance (Cap 73) provides, in this regard, as follows:

“If the intestate leaves a husband or wife and issue, whether or not persons mentioned in subsection (2)(b) also survive, the surviving husband or wife shall take the personal chattels absolutely and, in addition, the residuary estate of the intestate (other than the personal chattels) shall stand charged with the payment of a net sum of $500,000, free of death duties (if any) and costs, to the surviving husband or wife with interest on that sum from the date of the death at the rate determined from time to time by the Chief Justice for the purpose of section 49(1)(b) of the High Court Ordinance (Cap. 4) until paid or appropriated and, subject to providing for that sum and interest, the residuary estate (other than the personal chattels) shall be held–

(a) as to one half, in trust for the surviving husband or wife absolutely; and

(b) as to the other half, on the statutory trusts for the issue of the intestate.”

78.  The Father is 90 years of age and has medical and caregiving needs which, to my mind, is not being satisfactorily met by the manner in which the 1^st Defendant is administering the Estate. In my view the fact-sensitive assessment that I have to undertake in deciding whether or not to order removal is informed by, and takes it complexion from, the specific characteristics of the beneficiaries and, in particular, the Father. Put simply, the order for removal becomes even more compelling when the relevant test is considered from the perspective of the Father’s interests.

79.  Notwithstanding the views I have expressed here, I wish to make it clear that I would have been prepared to order the 1^st Defendant’s removal as administratrix even if I were to have taken no account of the specific characteristics of the beneficiaries (and in particular of the Father) in this case.

80.  For the sake of completeness, I have not overlooked the complaints by the 1^st Defendant that the Father has been: (a) staying rent-free in the Charming Garden Property; and (b) collecting rental income for some of the Properties for a period of time following the Deceased’s passing (for which he has returned some sums to the 1^st Defendant and, by his reckoning, continues to retain around HK$863,200).[28] However, I do not consider the complaints that are directed at the Father to be necessarily relevant to an assessment as to the 1^st Defendant discharge of her duties as administratrix. The focus of the removal application is on what the 1^st Defendant did and not on the Father.

81.  This is all buttressed by the fact that, as I observed to Mr Leung at the hearing, the fact that the Father is staying rent-free at the Charming Garden Property and the fact that he had collected and retained rental income on some of the Properties are not matters on which the Plaintiffs rely in seeking the 1^st Defendant’s removal as administratrix.

(7)  Appointment of replacement administratrix

82.  In so far as the appointment of a replacement administratrix is concerned, the Plaintiffs have put forward Ms Tse Man Shan, Anna, a professional accountant of HOF Advisory and Consulting Limited. Ms Tse is a member of the Hong Kong Institute of Certified Public Accountants and she had previously worked in PricewaterhouseCoopers.

83.  The 1^st Defendant argues against the appointment of an independent administratrix, on the basis that substantial costs would be incurred in employing a professional to discharge the duties of administratrix and that it would thus not be prudent to do so, having regard to the size of the Estate and the fact that there are complicated issues that will need to be addressed.

84.  However, the 1^st Defendant made no submissions to the effect that Ms Tse is not a fit and proper person or otherwise unsuited to replace the 1^st Defendant as administrator. In circumstances where I do not consider the 1^st Defendant should continue as administratrix, I approve the appointment of Ms Tse as the new administratrix.

85.  By replacing the 1^st Defendant as administratrix with an independent professional, I hope that the family can begin the process of healing their frayed relationship, challenging as that might seem, for the reasons set out in this judgment. The law can only provide solutions to legal problems but the problems in this case go beyond that which is legal in nature and the family as a whole will hopefully find it in themselves to achieve the reconciliation that ultimately closes the chapter on what was undoubtedly a sad episode in their lives, namely the passing of their mother/wife.

E.  Interim/Final Distribution of the Estate

86.  Counsel for the Plaintiffs, Mr George Chu, confirmed at the hearing of the applications that the Plaintiffs were content not to pursue an order for distribution if an order for “immediate” removal is made, which he explained to mean between four to five months.

87.  In circumstances where this judgment is being handed down within three months from the date of the hearing and given that I have decided to accede to the Plaintiffs’ application for Ms Anna Tse to replace the 1^st Defendant as administratrix, this obviates the need for any orders for distribution. The better way forward would be for the new administratrix to decide how best to distribute the assets of the Estate.

F.  Order for an Account by the 1^st Defendant to the New Administratrix

88.  However, to help the new administratrix get to grips with the task at hand sooner rather than later, I consider it right to order the 1^st Defendant to render an up-to-date account to the Plaintiffs and Ms Tse. I have the power to make this order, pursuant to O.85, r.2(3)(a) of RHC. I will make an order that is in materially similar terms to that which Winnie Tsui J had made on 24 January 2025 and referred to in paragraph 12 above.

89.  In the circumstances, I order that the 1^st Defendant shall, within 21 days from the date of this judgment, render (with supporting documents) to the Plaintiffs and Ms Tse:

(1)  a true and perfect inventory and account of the Estate from the date of the death of the Deceased to the present; and

(2)  a full and proper account of the 1^st Defendant’s dealings, payments and distributions in relation to the Estate.

G.  Damages or Inquiry as to Damages

90.  The Plaintiffs confirmed at the hearing of their applications that to the extent I were to grant an order for a full and proper account to be rendered, this would obviate the need for an inquiry as to damages, at least for the time being. Given that I have acceded to the request for an account, I accordingly make no order in relation to the Plaintiffs’ claim for damages or inquiry in relation thereto.

H.  Conclusion

91.  For the reasons set out above, I hereby order as follows:

(1)  The 1^st Defendant shall be removed as the administratrix of the Estate;

(2)  Ms Tse Man Shan, Anna of HOF Advisory and Consulting Limited shall be appointed as the new administratrix of the Estate; and

(3)  The 1^st Defendant shall, within 21 days from the date of this judgment, render (with supporting documents) to the Plaintiffs and Ms Tse:

(a)  a true and perfect inventory and account of the Estate from the date of the death of the Deceased to the present; and

(b)  a full and proper account of the 1^st Defendant’s dealings, payments and distributions in relation to the Estate.

92.  So far as costs are concerned, an order for costs is sought by the Plaintiffs. Given the findings I have made above about the manner in which the 1^st Defendant has conducted herself as administratrix, I consider it appropriate to make the following costs order nisi:

(1)  The 1^st Defendant shall personally pay the 1^st and 2^nd Plaintiffs’ costs of these proceedings, to be taxed if not agreed.

(2)  No order for costs is to be made against the 2^nd and 3^rd Defendants.

93.  To be clear, the 1^st Defendant (and indeed the Plaintiffs) is at liberty to apply for the order nisi on costs to be varied and, if so, consistent with the principles laid down in Famous Marvel (supra), the extent to which the 1^st Defendant has complied with the orders consequential upon this judgment may well be a relevant factor for the court to take into account (in addition to other factors) in deciding whether or not and, if so, the extent to which to accede to any such variation application.

94.  The above costs order nisi shall become absolute in the absence of an application to vary within 28 days hereof. If any application to vary is filed, the other parties have a right to respond to any such application to vary within 14 days of the application being filed.

95.  Unless any application for variation of the above costs order nisi is made within time, the Plaintiffs shall lodge and serve their statement of costs within 7 days after expiry of the 28-day period for any variation application to be filed. The 1^st Defendant shall lodge and serve any statement of objection within 7 days after the Plaintiff’s statement of costs has been filed.

96.  Finally, it remains for me to thank counsel on both sides for their helpful submissions in assisting the court in relation to these proceedings.