CHENG TANG KAM YUNG v. TANG KAM CHEUNG AND ANOTHER

CACV185/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 185 OF 2013

(ON APPEAL FROM HCMP NO. 147 OF 2008)

________________________

________________________

J U D G M E N T
________________________

Hon Cheung JA:

1. I agree with the judgment of Yuen JA.

Hon Yuen JA:

2. This is an appeal from the order of DHCJ Simon Leung made on 26 August 2013 ordering that the 1^st defendant (on behalf of himself and as representative of the estate of the 2^nd defendant) be removed as the administrator of the estate of Tang Chung Shau alias Tang Chun Fat (“the Deceased”), such order to take effect upon the appointment of a new administrator by the court pending the 1^st defendant’s submission within 14 days of his nomination of a professional accountant for appointment as administrator.

3. On 9 September 2013 the 1^st defendant (on behalf of himself and as representative of the estate of the 2^nd defendant) filed a Notice of Appeal from that order and issued a summons for stay of execution.  He did not submit a nomination.

4. On 10 October 2013 the judge dismissed the summons for stay and appointed David Yen Ching Wai an accountant with Ernst and Young as administrator of the Deceased’s estate in place of the 1^st and 2^nd defendants. 

5. Apart from the appeal, there was also before us a summons issued by the 1^st defendant on 12 November 2015 for leave to adduce fresh evidence on appeal.  We have considered the documents de bene esse.

Application for stay

6. After the judge refused a stay on 10 October 2013, the 1^st defendant (on behalf of himself and as representative of the estate of the 2^nd defendant) applied for a stay from this court.  On 5 December 2013 Chu JA dismissed his application.  There were further proceedings consequential thereto which are not material to this Judgment.

Background

7. For the purposes of the 1^st defendant’s argument on appeal, it suffices to summarize the background (as disclosed in the documents before this court) as follows.

8. The Deceased was the husband of the 2^nd defendant, with whom he had two children, a son (the 1^st defendant) and a daughter (the plaintiff).  The Deceased died on 15 July 1998, leaving a sizeable estate including a number of lots of land in the New Territories.

9. In 2000, a probate action (HCAP3/2000) was commenced in which the 2^nd defendant, the 1^st defendant and the plaintiff in these proceedings were the plaintiffs and Ng Mei Kun and Tang Ieng Kit were the defendants. 

10. On 7 November 2003 a Tomlin order was made that Letters of Administration be granted to the 2^nd defendant, the schedule to the order including a term that for the purpose of distribution of the Deceased’s estate, “the Plaintiffs [in HCAP3/2000] shall not challenge the claim by the 2^nd Defendant [Tang Ieng Kit] that he is a son of the Deceased and entitled to a share of the estate in such capacity”.

- Letters of Administration 

11. On 1 December 2004 Letters of Administration were granted to the 1^st and 2^nd defendants.

- Registration

12.1.  On 17 January 2005 the Letters of Administration were registered in the Yuen Long New Territories Land Registry in respect of 21 lots of land owned by the Deceased.

12.2.  On 23 August 2007 the Letters of Administration were registered in the Yuen Long New Territories Land Registry in respect of 2 further lots of land owned by the Deceased.

12.3.  All these lots are referred to collectively in this Judgment as “the lots”. 

13.1.   In respect of the lots,

-  the memorials for registration showed under the column for “Status of parties (Assignor/Assignee)” that the status of the 1^st and 2^nd defendants were “the Administrators”;

-  the “Owner Particulars” in the Land Registry also showed under the column for “Capacity” that the capacity under which the 1^st and 2^nd defendants held the lots was as “Administrator”. 

13.2.  This is relevant to the 1^st defendant’s argument in the appeal before us which will be discussed later in this Judgment.

Originating Summons

14. In March 2006, the plaintiff acting through solicitors sought accounts from the 1^st and 2^nd defendants.  She was not provided with any.

15. Eventually on 30 January 2008 the plaintiff issued an Originating Summons seeking accounts and insofar as may be necessary, administration of the Deceased’s estate.

16. It would appear that in November 2008, a master ordered accounts for the period commencing from the Deceased’s death (15 July 1998) to 31 March 2008 which accounts were verified by the 1^st defendant on oath in March 2009.

17. In October 2011 the 2^nd defendant died.  By an order of 27 December 2012, the 1^st defendant was ordered to represent her estate.

18. In the meantime on 21 November 2012, the plaintiff issued a summons for the replacement of the 1^st defendant as administrator of the Deceased’s estate.  This was the matter which was heard by DHCJ Leung on 26 June 2013 (at which hearing the 1^st defendant was represented by counsel), from whose order this is the appeal.

DHCJ Leung’s judgment

19. On 26 August 2013 the judge gave judgment in favour of the plaintiff and made the order set out in paragraph 2 of this Judgment.  His reasons appear in the written judgment and they will not be repeated or discussed here, because (as the 1^st defendant confirmed orally at the hearing before us) he relies on only one argument on appeal.

The 1st defendant’s argument on appeal

20. The argument relied on by the 1^st defendant is that since the lots had been transferred into the names of himself and the 2^nd defendant on 17 January 2005 and 23 August 2007, which occurred prior to the commencement of the Originating Summons on 21 January 2008, the proceedings are concerned with the determination of their property, and not with the administration of the Deceased’s estate.  The 1^st defendant sought the return of the lots to them.

Discussion

21. As was pointed out to the 1^st defendant during the hearing, the transfer of the lots to the 1^st and 2^nd defendants was solely in their capacities as administrators of the Deceased’s estate. 

22. The interests vesting in personal representatives such as administrators do not vest in them beneficially as they hold “in auter droit” (in right of another), and so their interest “is different from the absolute and ordinary interest which a person would have in his own property” (Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, 20^th ed para.41-09, p.582).  The law is therefore clear that the 1^st and 2^nd defendants did not acquire any beneficial interest in the lots (or in any other assets of the estate).

23. It does not matter that the 1^st and 2^nd defendants would be entitled to share in the distribution of the Deceased’s estate when the administration is completed.  Until administration is completed, the inchoate right of beneficiaries in an intestacy is only to have the estate properly administered and ultimately to take under the statutory trust for sale and conversion of the assets in the estate (s.62(1) Probate and Administration Ordinance Cap. 10; Williams, Mortimer and Sunnucks para.81-03, p.1414).

24. Further it cannot be suggested that there has been any assent, ie an acknowledgment by a personal representative that a particular asset is no longer required for the payment of debts, funeral expenses or general pecuniary legacies, so that that asset can be, and is, distributed to a beneficiary (Williams, Mortimer and Sunnucks para.81-01, pp.1411-1412).  The memorials and registration particulars which the 1^st defendant has relied on are not assents within the provisions of s.66(3) of the Probate and Administration Ordinance.

25. The 1^st defendant’s argument that the lots have become the property of himself and the 2^nd defendant is therefore misconceived in law.

Order

26. The appeal should therefore be dismissed with an order that the 1^st defendant and the estate of 2^nd defendant should pay the plaintiff’s costs of the appeal.  The 1^st defendant and the estate of the 2^nd defendant should also pay the costs of the summons to adduce fresh evidence.  The items were either irrelevant (the 1^st item), unnecessary (correspondence with the court) or could have been produced before the judge (the rest of the items).

Notice

27.1.  As mentioned earlier, it would appear from the Tomlin order that Tang Ieng Kit was acknowledged as being entitled to share in the estate as a son of the Deceased.  He is not however a party to these proceedings. 

27.2. As noted by Chu JA (at para. 30) in her Judgment on the stay application, Order 85 rule 3(2) of the Rules of the High Court provides that all persons having a beneficial interest in the estate need not be parties to the action.  However as the identity of the administrator may affect Tang Ieng Kit, it seems appropriate to direct that notice of this Judgment be served on him in the exercise of the court’s power under Order 44 rule 2(1) of the Rules of the High Court.

Hon Poon JA:

28. I agree.