SUN MAN WAI KENNIS v. LUI WAI YEE EUNICE, the administratrix of the estate of UY MOON ENG, Deceased AND ANOTHER

HCMP 505/2022

[2023] HKCFI 1038

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 505 OF 2022

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J U D G M E N T

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1.  This is the hearing of the Amended Originating Summons filed on 26 May 2022 by the plaintiff for the removal of the 1^st defendant as the administrator of the estate of Madam Uy Moon Eng (黃文永)  (“Deceased” and “Estate”)  and for various consequential order.

2.  I am satisfied that the plaintiff has made reasonable efforts to serve the court papers on the 1^st and 2^nd defendants at their last known addresses in Hong Kong and the Philippines respectively.  They have not entered any appearance.  I shall proceed in their absence. 

3.  The plaintiff is the child of the Deceased and Mr Tan Chin Pey (陳振沛).  The 1^st and 2^nd defendants are the children of the Deceased and Mr Lui Hing Suen (呂慶宣).  Mr Tan, Mr Lui and the Deceased passed away in 1998, 2004 and 2016 respectively.  The only three beneficiaries of the Estate are the plaintiff, the 1^st and 2^nd defendants.

4.  The Letters of Administration of the Estate were granted to the 1^st defendant on 5 August 2021 (Grant No. HCAG011980/2017).  According to the Schedule of Assets and Liabilities of the Deceased dated 27 May 2021 made by the 1^st defendant, the Estate consists of a property in Hong Kong, namely Flat G on 20/F of Block 3, Mount Haven, No. 3 Liu To Road, Tsing Yi, New Territories (“Property”), monies in bank accounts (close to HK$7 million), and items of jewellery and foreign currency banknotes in bank safe deposit boxes.

5.  The plaintiff claims that after the 1^st defendant became the administrator of the Estate, she has defaulted in her duties and has not informed the plaintiff and the 2^nd defendant of the status of the accounts of the Estate.  The 1^st defendant confessed to the plaintiff that she had used more than HK$2 million out of the Estate on investments, personal items and medications, without properly accounting to the beneficiaries.  The 1^st defendant was heavily in debt and became jobless in January 2022, and the plaintiff had lost contact with her since late February 2022.

6.  There is an on-going High Court Action (HCA 1322/2018)  (“Action”)  between the Estate (as the plaintiff)  and one Mr Sun David Tse Chien (as the defendant)  (“Mr Sun”).  In that action, the Estate primarily seeks vacant possession of the Property and damages for trespass against Mr Sun.  Mr Sun counterclaims for a declaration of interest in the Property and for sale proceeds in other landed properties in Hong Kong and the Mainland.  The Estate was previously represented by the plaintiff in the Action.  The 1^st defendant was substituted as the plaintiff after the Letters of Administration of the Estate were granted to her. 

7.  On 25 January 2022, on Mr Sun’s application, Lisa Wong J granted an interlocutory injunction in the Action restraining the 1^st defendant from disposing of or dealing with the monies in the Deceased’s bank accounts and her own bank account up to HK$6,894,716.33.  The basis of the injunction appears to be the 1^st defendant’s misappropriation of monies from the Estate.

8.  The 1^st defendant’s solicitors in the Action have come off the record, and she is acting in person on behalf of the Estate.  It appears that she has been absent in the proceedings.  The court has directed the trial of the Action to take place on or before July 2024.  The plaintiff has grave concerns whether the 1^st defendant will properly represent the Estate in the Action.  She therefore took out an application to appoint herself as the plaintiff in the Action in place of the 1^st defendant.  That application was adjourned sine die by Q Au-Yeung J on 18 January 2023 pending the outcome of the present proceedings, since the plaintiff must first be substituted as the administrator of the Estate before she may be appointed to represent the Estate in the Action.

9.  The court has a discretionary power to remove a personal representative of an estate and appoint another person in his place “if the due and proper administration of the estate and the interests of the persons beneficially entitled thereto so require”: section 33(3)  of the Probate and Administration Ordinance (Cap 10).  The discretion is a wide one and is not dependent on any finding of misconduct of the personal representative.  The guiding consideration is the welfare of the beneficiaries.

10.  Where, as in the present case, there is clear dereliction of duties on the part of the 1^st defendant as the administrator of the Estate (including her duties to keep proper accounts of the Estate and properly preserve and deal with the assets of the Estate), and the genuine concern over whether the 1^st defendant will prosecute the Action and defend the counterclaim on behalf of the Estate, it is in the interest of the Estate and the beneficiaries to remove the 1^st defendant as the administrator of the Estate and appoint someone else to take her place, so that the assets of the Estate may be properly accounted for and administered, actions may be taken to recover misappropriated assets, and the Estate may be properly represented in the Action.

11.  The size and composition of the Estate do not warrant the appointment of professional administrators.  The 2^nd defendant is joined as an interested beneficiary of the Estate but has not indicated any intention to administer the Estate.  In these circumstances, the plaintiff who has previously represented the Estate in the Action is an appropriate candidate to be appointed as the substitute administrator of the Estate.

12.  I will also make a vesting order of all the properties of the Estate which remain to be administered (including the Property)  in the plaintiff as the substitute administrator of the Estate: Lau Muk On v Lau Shui Sang & Anor (HCMP 1746/2006, 11 June 2010)  at [16].  This is without prejudice to Mr Sun’s claim over the Property in the Action. 

13.  For the above reasons, I make an order in terms of the draft order submitted by counsel (as amended at the hearing).