HUI KEW NUI v. LUI SAU WAH

HCMP 699/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 699 OF 2009

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D E C I S I O N

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(1) THE BACKGROUND

1.  The Plaintiff was the daughter of a Mr. Hui (“the Deceased”) who died in 2008.  The Defendant, the alleged lawful wife of the Deceased, had resided with the Deceased before the latter’s death in the property (“the Property”) registered in the name of the Plaintiff.  The Defendant however is not the Plaintiff’s natural mother.

2.  The Defendant’s continuous occupation of the Property after the death of the Deceased has caused the Plaintiff to institute this action against the Defendant for possession and damages in respect of the Defendant’s alleged unlawful occupation.

3.  The Defendant defends the claim, and further claims that the Deceased is in fact the true beneficial owner of the Property, while the Plaintiff is a mere bare trustee.

4.  No application has been made for a grant of representation in respect of the Deceased’s estate, the only asset of which would be the beneficial interest of the Property (as asserted by the Defendant).

5.  Since (according to the Defendant) the personal representative of the Deceased is presently not a party for pursuing the relief claimed in respect of the Property’s alleged beneficial interest, the Defendant hence issues a summons under Order 15 rule 15, Rules of the High Court, for a representation order appointing herself to represent the Deceased’s estate, and further adding her (in the capacity of the personal representative of the Deceased’ estate) as the 2^nd Defendant to the claim.

6.  The Plaintiff resists the application.

(2)  PRINCIPLE OF THE APPLICATION

A.  LOCUS OF THE DEFENDANT

7.  A party claiming a relief in his personal capacity on behalf of a deceased person’s estate without joining the personal representative is irregular and such a claim is susceptible to be struck out (Ip Cheung- kwok v Sin Hua Bank Trustee Ltd [1990]1HKLR 497, followed by the Court of Appeal in周順鏞及徐玉蓉 (unrep.) (CACV 34 of 2005)).  However, a person’s interest in the assets of the deceased person is a chose in action , which enables him to institute necessary proceedings in connection with the proper administration of the estate (Ip Cheung- kwok at 509 E-F, followed by Re: the Estate of Luk Kim Ying [2008]HKLR743).

8.  Relying on these authorities, the Defendant’s counsel, Mr. Lo, submits that the Defendant would have sufficient interest to institute the proceedings on behalf of the Deceased’s estate by including in this action a counterclaim on behalf of the Deceased’s estate in respect of the alleged beneficial interest of Property.

B.  ORDER 15

B.1.  Order 15 rule 15

9.  Under Order 15 rule15, a court has discretion to make an order of appointing a person to represent the estate of a deceased person who was interested in the matter in question in the proceedings so that any judgment or order subsequently given or made in the proceedings shall bind the estate of the deceased person.

10.  Whether this court should properly exercise its discretion to make an order would therefore depend very largely on whether the Deceased has sufficient interest in the matter in question in this proceeding.

11.  Even though the Defendant only relies on Order 15 rule 15 in the application, her application in effect also includes an order for adding a party (the personal representative of the Deceased) as an additional party.  Hence, the general principle governing joinder of parties under Order 15 should also be applicable in this application.

B.2.  Order 15 rule 4

12.  Under O.15 r.4, two or more persons may be joined together in one action as defendants where –

“(1)(a) if separate actions were brought by or against each of them, as the case may be, some common question of law or fact would arise in all the actions, and

(b) all rights to relief claimed in the action (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions.

(2) Where the plaintiff in any action claims any relief to which any other person is entitled jointly with him, all persons so entitled must,…, be parties to the action and any of them who does not consent to being joined as a plaintiff must, subject to any order made by the Court on an application for leave under this paragraph, be made a defendant.

This paragraph shall not apply to a probate action.” (Emphasis added)

B.3.  Order 15 rule 6

13.  Further, under Order 15 rule 6, the court has a discretion to add a party as a defendant to the proceedings where a question or issue arising out of or relating to or connected with any relief or remedy claimed in the action may exist between him and a party to the action which the court thinks it would be just and convenient to do so (see Hong Kong Civil Procedure 2011 at 15/6/7).

(3)  IS A REPRESENTATION ORDER REQUIRED?

A.  CONTENTIONS

14.  In this case, since the Defendant has included a counterclaim for a declaration for beneficial interest of the Property on behalf of the Deceased and yet the latter is not a party, it would be therefore necessary, Mr. Lo submits, to add the personal representative of the Deceased to the proceedings under Order 15 rule 15.  It is further submitted that a representation order, if made, would help further the underlying objectives under Order 1A rule 1 so that multiplicity of proceedings would be avoided.

15.  Mr. Cheung, the Plaintiff’s counsel, however contends that since the Plaintiff makes no claim against the estate at all, and this action is against the Defendant personally, adding the personal representative of the Deceased to the proceedings is inappropriate.  Any such action by the Deceased’s estate, he says, should be commenced by a separate action.

16.  Further, Mr. Cheung contends that the court can always direct the proceedings to proceed in the absence of a person representing a deceased person who is found to be interested in the matter in question in the proceedings.

B.  RELEVANT CONSIDERATIONS

17.  Accordingly, the merit of this application will very much depend on whether the Defendant’s allegation of the Deceased’s beneficial interest will satisfy the criterion of Order 15 rule 15 that the Deceased has interest in the matter in question.  Three matters should be taken into account:

(1)  What is the Deceased’s interest?  If so identified,

(2)  Whether the interest is “the matter in question” in the proceedings; and further that,

(3)  Whether all the circumstances of the case justify an exercise of discretion in favour of making the order?

18.  The best starting point in considering these matters would be to look at the pleadings.

B.1. WHAT IS THE DECEASED’S INTEREST?

19.  The pleadings are prepared in Chinese.  However counsel has chosen English at the hearing. For the purpose of consistency, I think it would be better to prepare this judgment in English.  Doing the best I can, the following is what I believe to be the matters that have been pleaded.

20.  The Statement of Claim (“SOC”) is a straightforward claim for possession and damages arising from the allegedly unlawful occupation of the Property against the Defendant in her personal property.  No relief is claimed against the Deceased’s estate.

21.  The matters as pleaded in the Amended Defence and Counterclaim (“ADC”) can be broadly categorized into two groups:

(a)  Deceased’s beneficial ownership: Particulars of the Deceased’s alleged provision and financing of the purchase price (including mortgage repayment) (See ADC, para.3 to 14; 19-26; 29-30);

(b)  Defendant’s interest:

(i)  By virtue of the Deceased having died testate. The Deceased had left some written documents allegedly conferring on the Defendant  an interest in the Property (See ADC, para.15)

(ii)  By virtue of the Intestates’ Estates Ordinance (Cap.10).  The Defendant would be entitled as the Deceased’s widow in that the Defendant and the Deceased registered their marriage in 1999 in Hong Kong (ADC, para.16-18).

22.  The ADC therefore does disclose the Deceased’s interest by way of an assertion of the beneficial interest in the Property. Hence, a relief is sought in the counterclaim for a declaration in favour of the Deceased’s estate.  The Defendant, in spite of the allegations of her interest in the Deceased’s estate, has not sought any relief against the Plaintiff or the estate in her own personal capacity.

23.  However, that the Deceased’s interest is identified will not be sufficient as the Defendant will also be required to show a nexus between this interest and the “matter in question”.

B.2.  WHAT IS THE MATTER IN QUESTION IN THIS PROCEEDING?

24.  This will require a consideration of whether the Deceased’s interest as disclosed is a common question of fact or law in this case, and that whether the personal representative of the Deceased’s estate is a necessary and proper party to the proceeding?

25.  The Plaintiff’s claim, as discussed above, is straight forward, and no relief is sought against the estate.  More importantly, the Defendant (in her personal capacity) also makes no claim (by way of counterclaim) either against the Plaintiff or the estate.

26.  The issue or the matter in question in this case would therefore be whether the Defendant’s occupation of the Property unlawful so that the Plaintiff, as the registered owner of the Property, will be entitled to possession and damages arising from the Defendant’s occupation.

27.  The Defendant justifies her occupation of the Property by alluding (rather obliquely though) to her interest in the Deceased’s estate as I have discussed in paragraph 21(b) above as well as disputing the Plaintiff’s beneficial interest.

28.  From the evidence that has been filed, it would appear that the Defendant’s interest as the beneficiary of the Defendant’s estate will be highly contentious.

29.  In the ADC, the Defendant has referred to some Chinese documents but refrained from asserting them to be testamentary instruments. Unsurprisingly, she has yet to take steps to apply for admission of these documents to probate by commencing a probate action.

30.  Alternatively, neither can the Defendant apply, without courting great controversy, for letters of administration on the assertion of the Deceased having died intestate as the Deceased’s surviving lawful widow.  According to the evidence the Plaintiff has filed, it is alleged that at the time when the Deceased registered his marriage with the Defendant, the Deceased’s previous marriage with his second wife was still subsisting and had not yet been dissolved.  It is therefore alleged that the union between the Deceased and the Defendant was potentially bigamous and should be void.

31.  The evidence clearly shows that whether the Defendant would be able to claim any beneficial interest in the Deceased’s estate is highly controversial.  It is doubtful whether she has sufficient interest in the Deceased’s estate to give her any locus to enable her to bring proceedings on behalf of the estate.

32.  Quite apart from the Defendant’s doubtful interest in the Deceased’s estate, such interest even proven would not confer on her a right of occupation qua a beneficiary.  The cases referred by counsel as set out in paragraph 7 above will only give her a right to institute proceedings in connection with the administration of the Deceased’s estate.  Since in this action, neither the Plaintiff nor the Defendant have made any claim against the Deceased’s estate, the Deceased’s interest will not be a matter in question that requires to be resolved.

33.  The Plaintiff, as a registered owner of the Property, is entitled to claim possession against a trespasser (who is the Defendant in accordance with the Plaintiff’s allegation).  It can be said that a connection may exist in requiring the Plaintiff to account for damages received to the Deceased’s estate if and when the beneficial interest were found to belong to the Deceased.  This, in my view, should best be determined by separate proceedings rather than in this action where I have found unconnected with the estate claim.

C.3.  WHETHER ALL THE CIRCUMSTANCES OF THE CASE JUSTIFY EXERCISING A DISCRETION IN FAVOUR OF MAKING AN ORDER?

34.  Having found against the Defendant on the second matter, I think the matter does not end here. Were I found to be wrong on the second matter, and in the further event that the circumstances justifying a joinder, I can still exercise my discretion in favour of the Defendant.  I am indeed attracted by the very persuasive submission by Mr. Lo regarding the saving of expense and costs when multiplicity of proceedings can be avoided upon a grant of an order for joinder.  This submission certainly has more force today because of the Civil Justice Reform.  I would therefore be more inclined to order a joinder in furtherance of achieving the underlying objectives if the relevant circumstances (to be discussed below) so justify. 

C.3.1.  Whether the Defendant is a suitable person to be appointed?

35.  The Defendant is now in occupation of the Property.  The legality and justification of her occupation will be a matter to be resolved at trial.  These, coupled with her doubtful interest (which remains unresolved) in the Deceased’s estate, tend to suggest that her appointment as a representative will potentially conflict with that of the estate’s interest.  I do not therefore consider her a suitable person to represent the Deceased’s estate in respect of the Deceased’s claim of beneficial entitlement.

C.3.2.  Binding absent party?

36.  I have further reflected upon whether I should, in exercise of my case management power, take such step now in ensuring that any court’s decision on the beneficial ownership can bind the estate.

37.  After having given careful thoughts to the facts of this case, I am unable to find benefit by taking this course.

38.  First, the evidence to be adduced in respect of the disputed beneficial interest appears to be also from the same parties in this action. Hence, no interested party needs to participate in the trial for the purpose of giving evidence.

39.  Secondly, the intestate entitlement to the Deceased’s only asset, the disputed beneficial interest of the Property, would likely to be (according to the evidence that has been disclosed) between the Plaintiff (entitled as the lawful daughter of the Deceased) and the Defendant (as the lawful widow, subject to the proof of valid marriage).  Since parties with any potential interest in the estate are already parties in the action, it is unlikely that there will be any person prejudiced even if a personal representative is not joined in the proceedings.

40.  Lastly, should the court that hears the trial decides to bind the parties affected by the judgment, it can still do so by directing the giving of notice of the judgment or order given to be served on any person who is not a party but who is or may be affected by it under Order 44 rule 2.  The person so served with such a notice shall be bound unless he or she takes the prescribed procedure within the stipulated period provided in the said rule.

41.  For the forgoing reasons, I am not inclined to exercise my discretion in the Defendant’s favour.

(4)  CONCLUSION AND COSTS

42.  The Defendant’s summons is therefore dismissed. Costs should therefore follow the event.  I grant a costs order nisi that the Defendant shall pay the Plaintiff’s costs of the application, including costs reserved, together with certificate for counsel, to be summarily assessed in lieu of taxation if such costs cannot be agreed. The Defendant’s own costs be taxed in accordance with Legal Aid Regulations.

43.  Within 14 days upon the costs order becoming absolute and that if the costs cannot be agreed, the Plaintiff should fix a hearing for summary assessment of costs with ½ hour reserved, and further lodge and serve a Statement of Costs.  The Defendant shall lodge and serve the Objections 7 days thereafter.

(5)  DIRECTIONS ON THE DEFENDANT’S SUMMONS ADJOURNED FROM 13 May 2011

44.  I now deal with another outstanding matter. I was told that a master has reserved the question of costs on the summons regarding handwriting expert.  From reading the papers, I am not clear if the master when reserving costs has already given leave for the adducing of handwriting expert. I also do not know the purpose for which handwriting expert is applied for.  Given the issue in dispute as discussed above, I tend to think that such evidence would not assist the court in resolving the issue in dispute.  Further, the parties may review the case consequent on my dismissal of the Defendant’s summons, and perhaps subsequently come to a different view on this matter.

45.  I hope this judgment would help both parties take a fresh look at this case, and - in particular with the facts as highlighted (the small value of the asset, the relationship between the parties, and the potential criminal liability if the Defendant’s marriage with the Deceased were found to be bigamous as presently alleged by the Plaintiff) - should actively consider mediation.

46.  In the circumstances, in respect of this summons, I direct the parties to restore the summons before any master (preferably the master who reserved costs at the hearing) should they still need further directions.