LAI WAI PANG v. KWOK LI SHUK HAN

HCAP 13/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 13 OF 2000

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J U D G M E N T

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1. This is an application by the Defendant for an order that the Plaintiff pay into court three sums of money, pursuant to O. 29 r. 2 (3) of the Rules of the High Court (Cap. 4), or alternatively, that an administrator pendente lite be appointed pursuant to section 40 of the Probate and Administration Ordinance (Cap. 10) and O. 76 r. 14 of the Rules of the High Court. Originally, the alternative application for the appointment of an administrator pendente lite was not limited in scope to the three sums of money. During the course of hearing, Miss Wu, appearing for the Defendant, made the concession by restricting the scope of the intended administration pending suit to the three sums only.

2. The deceased person in the present case, Madam Kwok Shiu Woon, passed away intestate in May 1997. She is survived by her husband (the Plaintiff) and her mother (the Defendant) only. The Plaintiff and the Defendant are therefore the only beneficiaries under the intestate estate of the deceased. Moreover, as the widower, the Plaintiff enjoys first priority for appointment as administrator of the estate. However, the Defendant makes various allegations against the Plaintiff regarding his handling of assets and monies belonging or said to be belonging to the deceased prior to and after her death, and contends that he is therefore not suitable and fit to be appointed as administrator. She seeks the appointment of an independent person as administrator of the estate.

3. The trial of this probate action commenced in early February this year. But because of a late application to amend pleading, the trial was adjourned. It has since been refixed to November this year. The present application was taken out by the Defendant on 7 April 2003.

4. As mentioned above, this application is based on O. 29 r. 2 (3) of the Rules of the High Court, as well as section 40 of the Probate and Administration Ordinance. O. 29 r. 2 reads as follows:

"2. (1) On the application of any party to a cause or matter the Court may make an order for the detention, custody or preservation of any property which is the subject-matter of the cause or matter, or as to which any question may arise therein, or for the inspection of any such property in the possession of a party to the cause or matter.

(2) For the purpose of enabling any order under paragraph (1) to be carried out the Court may by the order authorize any person to enter upon any land or building in the possession of any party to the cause or matter.

(3) Where the right of any party to a specific fund is in dispute in a cause or matter, the Court may, on the application of a party to the cause or matter, order the fund to be paid into court or otherwise secured.

(4) An order under this rule may be made on such terms, if any, as the Court thinks just."

5. As I indicated during counsel's submission, I have difficulties regarding the application of the Defendant insofar as it is based on O. 29 r. 2 (3). The three sums of money in question are said by the Defendant to be trust monies belonging to the estate. The Plaintiff accepts that the first sum ($487,817.28) is trust money belonging to the estate beneficially. It forms part of an "emergency fund" allegedly established by the deceased during her hospitalisation. The money was held by the Plaintiff for the deceased's use during her lifetime, and remains with him after her demise. The Plaintiff denies that the second sum ($709,561.50) is trust money belonging to the estate. According to the Plaintiff, the money actually represented the return of his contribution to the purchase of a property in the name of the Defendant. The Plaintiff says the money belongs to him beneficially. In relation to the third sum ($97,000.00), the Plaintiff says that it represented ATM withdrawals of money from the deceased's account by the deceased herself. The money never went into his hands, and he therefore does not hold such money on trust for the estate.

6. My difficulties with the Defendant's reliance on O. 29 r. 2 (3) are two-folded. First, the rule cannot possibly apply to the first sum because the right to the first sum is not in dispute. Both sides agree that the sum of money is held on trust by the Plaintiff for the estate. The right of the estate to the sum of money in question is not in dispute. As for the third sum, there is a dispute as to whether the money is with the Plaintiff. It cannot be resolved before trial. Secondly and more generally, I have doubt whether the sums of money are "in dispute in a cause or matter". It must be remembered that the present action is a probate action, not an administration action. What is in issue is whether letters of administration should be granted to the Plaintiff as prayed for by the Plaintiff in his statement of claim, or whether someone else should be appointed the administrator as counterclaimed by the Defendant. The right or entitlement to the sums of money in question is relevant in this action only because the Defendant argues that the Plaintiff has failed to fully disclose these sums of money before, and is in potential conflict of interest with the estate insofar as he asserts that the monies belong to him beneficially (or that he has not received the money). The court may or may not, at the end of the day, need to decide all these matters in order to decide whether letters of administration should be granted to the Plaintiff or to someone else. No direct relief is sought by either party in relation to any of these three sums of money in the action or counterclaim.

7. But given my conclusion below, I need not express any definite view on the proper construction of the provisions, particularly when counsel has not been able to cite to me any direct authority on the question that I have identified above. (But c.f. "property which is the subject-matter, etc." in O. 29 r. 2(1): see Hong Kong Civil Procedure 2002 vol. 1 para. 29/8/6; Scott v Mercantile Accident Insurance Co. (1892) 8 T.L.R. 320; Re Saxton (deceased) [1962] 1 W.L.R. 859.)

8. As regards section 40 of the Probate and Administration Ordinance, there can be no dispute that this court does have the jurisdiction to appoint an administrator pending suit in situations of the present type. But appointment is not automatic: Hung Jin Mui v Tang Chui Yuk Angela, No. P4 of 1997, Le Pichon J (as she then was), 11 February 1998, pp. 3-5, explaining the relevant English authorities (Re Bevan [1948] 1 All E.R. 271; Bellew v Bellew (1865) 4 Sw. & Tr. 58, 13 L.T. 247). The court has a discretion to exercise.

9. Regardless of whether the application is considered from the angle of O. 29 r. 2 (3) or section 40 of the Probate and Administration Ordinance, there are common considerations to be taken into account. The tests and considerations are, of course, not entirely identical. (For the exercise of the court's discretion in relation to the appointment of an administrator pendente lite, see for instance, Hung Jin Mui, supra.) I take into account specifically the following matters:

(1) There is no or insufficient evidence of any risk of dissipation of the three sums by the Plaintiff. The burden is certainly on the Defendant to establish the need for doing something to protect and preserve the three sums of money. A real risk of dissipation of assets is, of course, a good reason to consider exercising the court's discretion to appoint an administrator pendente lite or make an order under O. 29 r. 2 (3) (if applicable).

(2) The size of the estate is such that even if one were to assume that the Plaintiff would dissipate the three sums in their entirety, there would still be sufficient money and assets left for distribution to the Defendant as per her entitlement under the intestacy rules, the Plaintiff and the Defendant being the only two beneficiaries of the intestate estate.

(3) Of the three sums, two are not accepted as trust monies. In relation to one of them, the Plaintiff actually says that he never received the money. In those circumstances, before the trial of action, and before any findings are made in relation to the true nature of these sums of money (whether in the present probate action or in any subsequent action), ordering the Plaintiff to pay over the sums of money into court or to an administrator pendente lite could be quite unfair to the Plaintiff. This, of course, cannot be a conclusive factor against making the order sought, but is nonetheless a relevant factor to be taken into account.

(4) I do not consider that the Defendant's suspicions regarding the character and conduct of the Plaintiff, as raised in the defence and counterclaim, are of themselves sufficient to found the court's exercise of discretion under O. 29 r. (3) or section 40 of the Probate and Administration Ordinance. These are allegations which have yet to be tested and decided at trial. But nonetheless this is a relevant factor that I take into account.

(5) I bear in mind the delay involved in the present case. The deceased passed away in 1997. The present application was only made in April this year, whereas the trial of the action has been refixed to commence in November this year. The Defendant has not put in evidence to suggest any recent change of circumstances calling for the present application.

(6) There are no special features relating to the assets, i.e. the three sums in question, that call for special preservation, protection, handling or management. Contrast the situation of a stock option, public listed shares of volatile prices, or rental incomes.

(7) The potential costs of the administrator pendente lite must be taken into account, which is a burden on the estate (assuming that the estate has to bear the costs eventually).

10. Apart from the above specific matters, of course I bear in mind the facts and the general circumstances of the present case.

11. Having done so, I am of the view that in the exercise of my discretion no order should be made under O. 29 r. 2 (3) (assuming that it is applicable), or under section 40 of the Probate and Administration Ordinance. I am of the view that the factors favouring the making of some form of order relating to the three sums of money are heavily out-weighed by those that do not.

12. In conclusion, I dismiss the present application. Having heard counsel's submissions on costs on a provisional basis, I am of the opinion that costs should follow the event. I therefore order that the costs of the present application be paid by the Defendant to the Plaintiff in any event, such costs to be taxed if not agreed.