ZHAO YI E v. YU WAN MUI TERESA AND ANOTHER

HCMP 2129/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2129 OF 2008

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D E C I S I O N

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1.  The plaintiff is a beneficiary under a will.  The will was made by the testator on 19 December 1996.  The testator passed away on 22 January 1997.  By the will, the testator made some specific requests to his relatives and the plaintiff, who was his former employee.

2.  The plaintiff was given Flat 11D, Block 6, Site 11, Whampoa Garden, Hunghom, Kowloon (the “Property”) free of estate duty, but there was a proviso that she shall not dispose of the same before 1 January 2015. 

3.  Estate duty is payable for the properties passing on the death of the testator as he passed away before the enactment of Revenue (Abolition of Estate Duty) Ordinance 2005.

4.  When the testator made the will, the Property was occupied by one of his sons, Yu Heng Long (于慶龍).  Yu Heng Long, who is another beneficiary under the will, was still living there with one Io Wai as at 23 May 2008.  They may still be living there now.  Of all the beneficiaries in the will, only the plaintiff is not a member of the testator’s family.

5.  The defendants, who were also children of the testator, were appointed the executors and trustees of the will.  After the death of the testator on 22 January 1997, the defendants should have applied for grant of probate.  The plaintiff has no knowledge if either or both of them have applied for the grant.  The plaintiff suspects that they might have problems in paying the estate duty as under section 14(6) of the Estate Duty Ordinance, the executors are exclusively accountable for the duty to the extent of the assets received by them.

6.  Sections 66(1) and (2) of the Probate and Administration Ordinance provide:

“66(1)    A personal representative may assent to the vesting in any person who (whether by devise, bequest, devolution, appropriation or otherwise) may be entitled thereto, either beneficially or as a trustee or personal representative, of any immovable property to which the testator or intestate was entitled or over which he exercised a general power of appointment by his will and which devolved upon the personal representative.

     (2)    The assent shall operate to vest in that person the estate to which the assent relates, and unless a contrary intention appears, the assent shall relate back to the death of the deceased.”

7.  So the defendants have the power to execute an assent to vest the Property unto the plaintiff, and the vesting would relate back to the death of the testator.  If the defendants should have any argument that estate duty may be charged on the Property, their position is protected by sections 66(5) and (6) of this Ordinance, which provide:

“(5)     An assent or conveyance given or made by a personal representative shall not, except in favour of a purchaser of a legal estate, prejudice the right of a personal representative or any other person to recover the estate to which the assent or conveyance relates, or to be indemnified out of such estate against any duties, debts or liability to which such estate would have been subject if there had not been any assent or conveyance.

(6)       A personal representative may, as a condition of giving an assent or making a conveyance, require security for the discharge of any such duties, debt or liability, but shall not be entitled to postpone the giving of an assent merely by reason of the subsistence of any such duties, debt or liability, if reasonable arrangements have been made for the discharging of the same, and an assent may be given subject to any legal estate or charge by way of legal mortgage.”

So the defendants cannot delay the vesting of the Property.  In any case, the plaintiff cannot dispose of the Property before 1 January 2015. 

8.  In addition to vesting of the Property unto the plaintiff, the defendants can also give possession of it to the plaintiff.  Section 70(1) of the said Ordinance provides:

“70(1)    A personal representative, before giving an assent or making a conveyance in favour of any person entitled, may permit that person to take possession of the land, and such possession shall not prejudicially affect the right of the personal representative to take or resume possession, nor his power to convey the land as if he were in possession thereof, but subject to the interest of any lessee, tenant or occupier in possession or in actual occupation of the land.”

9.  All the powers of the executors under sections 66 and 70 as quoted above are exercisable before the grant of probate.  

10.  The defendants have not appeared today, but the 1st defendant has written a letter dated 16 February 2009 to this court saying that the testator has provided in his will that the change of name of owner of the Property should only take place in 2015.  She, therefore, opposes to any change of the testator’s dying wish.

11.  Unfortunately, this is a misreading of the will.  The date of 1 January 2015 is only the deadline before which the plaintiff should not dispose of the Property.  It is not the day for vesting of the Property to the plaintiff.  Under the will, the plaintiff is entitled to the vesting of the Property immediately after the testator’s death.  If the defendants should have any worry that the plaintiff may, after the vesting, dispose of the Property before 1 January 2015, they may choose to register the will against the Property at the Land Registry.

12.  Since the defendants have not given any valid reason to oppose this application, I therefore order that the defendants, or either of them as an executor and trustee of the will, do perform and carry into execution the trust of the will.

13.  I further order an account and inquiry be taken of the Property, an account of the dealings of the 1st and 2nd defendants, or either of them or any other person with the Property and an inquiry as to what income the Property has derived and what encumbrance has been created against the Property since the death of the testator.

14.  And I order that, during the interim and before the grant of probate, an assent be given and conveyance of the legal title to the Property be made and vacant possession of the Property be delivered by the defendants or either of them unto the plaintiff, subject to the terms of section 70 of the Probate and Administration Ordinance.  I further grant the plaintiff liberty to apply.

15.  And I also order the costs of these proceedings be to the plaintiff and be borne by the defendants.