CHAN KWONG MING AND ANOTHER v. YAO YUERONG (姚月容) , as the sole administratrix of the Estate of CHAN SHU HOK (陳樹鶴)

HCMP 1873/2018

[2021] HKCFI 2698

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1873 OF 2018

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BETWEEN

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JUDGMENT

(On Removal of Administratrix)

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Introduction

1.  This is an originating summons issued by the plaintiffs (respectively “P1” and “P2” and collectively “Ps”), for, among other things, an order that the defendant (“D”) to furnish to Ps inventories and dealings and an updated account of the estate of the Deceased (“Estate”), or alternatively D be removed as the administratrix of the Estate and that P1 be appointed in her place (“Removal Application”).

2.  The originating summons was first served on D on 2 November 2018 by inserting a copy of the same and accompanying documents into the letter box at an address at Maylun Apartments, Shu Kuk Street, Hong Kong (“Maylun Apartment”) said to be D’s usual or last known address as stated on the assignment dated 15 June 2016 for the sale of the Maylun Apartment (“Assignment”). No acknowledgment of service was entered by D.

3.  However, as it is clear from the Assignment that D (as administratrix of the Estate) sold the Maylun Apartment (which was part of the Estate) on 15 June 2016, there was no sufficient evidence that D was still living there in November 2018.

4.  The originating summons was first fixed for a directions hearing on 19 February 2019 before DHCJ Yeung, who then directed that the originating summons and all accompanying documents to be served by way of substituted service by effecting the same on a firm of solicitors Messrs H H Lau & Co (“HHL”) who had been D’s solicitors in handling matters relating to the Estate. 

5.  The originating summons was then adjourned to a hearing on 19 June 2019 before Wilson Chan J, and directions were duly given that day for a substantive hearing and for Ps to lodge and serve their skeleton submissions in support of the originating summons.

6.  The substantive hearing was fixed before this Court on 7 January 2021 (“Hearing”).

Brief Background

7.  The Deceased died intestate on 17 September 2011 and he left no children and left D as his surviving spouse. The Deceased was the youngest of 3 children, and he had two elder brothers and one elder sister. The Deceased’s parents and siblings all predeceased him.

8.  There were 4 children of the Deceased’s elder brother, of which P1 is one of the surviving 3 children. The Deceased’s 2^nd elder brother was not married and left no children. The Deceased’s elder sister left 3 children of which P2 is the oldest.

9.  Thus, P1 and P2 are nephews of the Deceased.

10.  After Deceased’s death, there were disputes as to whether letters of administration of the Estate should be granted to D, and on 7 June 2013, the Court ordered that the grant be to D. Subsequently, the letters of administration (“LA”) were granted to D on 4 June 2014.

11.  As seen in the Schedule of Assets and Liabilities attached to the LA, the Estate consisted of mainly two properties, namely the Maylun Apartment and another property at Fok Ying Building on King’s Road (“Fok Ying Property”). The Fok Ying Property was sold on 17 November 2014 by D at a consideration of HKD 3,180,000.  As mentioned earlier, the Maylun Apartment was sold on 15 June 2016, and the consideration was HKD 4,930,000.

Order made on 7 January 2021 

12.  Prior to the Hearing, there was only one affirmation of service filed on 9 December 2020 by the service clerk of Ps’ solicitors. That affirmation only indicated that a copy of the Notice of Appointment to hear the Originating Summons dated 3 December 2020 was served on HHL. There was no affirmation of service in relation to the service of the originating summons or any other documents.

13.  Having said this, the evidence showed that D should be aware of the Hearing and that Ps had been seeking a distribution and asking D for the total amount and breakdown of the Estate and Ps’ respective entitlement of the Estate since about end of 2014 and for distribution of the Estate. In a pre-action letter dated 21 September 2018 to HHL, Ps’ solicitors had demanded an account of the Estate. There were 2 replies from HHL, the effect of which was that D was not able to contact HHL due to her health issue and that she would attend HHL’s office after her medical treatment and when her health condition improved.

14.  In light of the above, D was clearly aware of her duty to render an account of the Estate. Although D had previously provided a summary of the sale proceeds of the Fok Ying Property, there appeared to have been no update as to the recovery of arrears of rent in relation to the Fok Ying Property and also there appeared to have been no account of summary as to what happened to the sale proceeds of the Maylun Apartment.

15.  This Court ordered at the Hearing, amongst other things, as follows (“Order”):

(1) with 14 days from the date of service of the order, D shall furnish to Ps and verify on affirmation an account of the Estate

(2) D to furnish an updated account of the Estate within 1 month from the end of every 3 month period after the account in (1) is furnished until conclusion of the administration of the Estate;

(3) the order to be served on D by substituted service as directed by the Court

(4) the Removal Application be adjourned sine die with liberty to restore if D has filed to comply with the above (1) and (2).

Ps’ Removal Application    

16.  After the Order, Ps applied for a further substituted service order on D of the Order and all relevant documents in these proceedings required to be served by advertisement in an English and Chinese newspapers.  The order was granted on 1 February 2021. P’s solicitors filed a further affirmation of service on 30 June 2021 that the substituted service order was effected by advertisements respectively in the Oriental Daily News and the Standard on 7 May 2021.

17.  D did not comply with the Order.

18.  This Court directed that the Removal Application be dealt with on paper.  Ps’ Counsel Mr Jerome Liu submitted no further submissions other than those for the Hearing in January 2021.

19.  According to section 4(4) of the Intestates’ Estates Ordinance, Cap 73, the 7 issues of the Deceased’s siblings and also D are the beneficiaries of the Estate. As set out earlier, Ps are 2 out of the 7 issues of Deceased’s siblings and 6 of them (including P2) renounced their interests in the Estate between 26 July 2019 and 17 September 2019[1].

20.  P1 has since at least 17 December 2014 started instructing his solicitors to make enquiries regarding the Estate. The evidence shows that D has been making all sorts of excuses in failing to render a full account of the Estate and according to P1, it is likely that D has taken all the assets of the Estate and fled to Mainland China.  What is clear is that no account has been rendered by D notwithstanding the Order. As HHL had been acting for her in relation to matters of the Estate, D should be clear about her duty to render proper account and inventory of the Estate and to administer and distribute the Estate. There has been no distribution made by D. By now, it has been almost 10 years since the death of the Deceased and over 8 years since the LA was granted to D. 

21.  Ps’ present application is made under section 33 of the Probate and Administration Ordinance, Cap 10 and the Order 85 rule 2 of the Rules of the High Court.

22.  Sections 33(1), (2) & (3) of the Probate and Administration Ordinance, Cap 10, (“PAO”) provides that:

“(1) Where it appears to the court that a probate or administration either ought not to have been granted or contains an error, the court may call in the probate or administration and if satisfied that it would be revoked at the instance of a party interested, may revoke it.

(2) A probate or administration may be revoked under subsection (1) without being called in if it cannot be called in.

(3) The court may, if satisfied that the due and proper administration of the estate and the interests of the persons beneficially entitled thereto so require, suspend or remove an executor or administrator (other than the Official Administrator) and provide for the succession of another person in place of such executor or administrator and for the vesting in that other person of any property belonging to the estate.”

23.  As said by Poon J, as he then was in paragraph 36 of his judgment in Re Estate of Lee Da Kor, HCMP 1720 of 2007, 28/12/09:

“In exercising its jurisdiction under section 33, the court must consider whether the removal of the executors is necessary for the due and proper administration of the estate and in the interests of the beneficiaries.”

24.  Mr Liu has also referred this Court to another judgment of Poon J, as he then was in Re Estate of Kan Chung, [Chan Sau Heung v Kwan Siu Fai] HCMP 2620 of 2012, 17/04/13. As pointed out by Poon J, if removal of the grantee without revocation of the grant is sufficient and if yes, then the applicant should proceed under section 33(3) of the PAO and if there are additional special circumstances that require revocation of the grant as well and if such circumstances exist, then the applicant should proceed under section 33 (1) of the PAO.

25.  Ps in the present case are essentially proceeding under section 33(3) of the PAO as seen in the originating summons. There is no application for revocation of the grant.

26.  Having considered the evidence before this Court, I am satisfied that (1) there has been delay to distribute the Estate; (2) D has failed to provide a proper account of the Estate; (3) the Maylun Apartment was sold over 3 years ago; (4) D seems to have disappeared since about July 2007 and cannot be found and has ignored these proceedings; (5) it seems likely that D may have misappropriated the assets of the Estate. I am of the view that due and proper administration of the Estate and the interests of the persons beneficially entitled thereto require the removal of D as the administratrix of the Estate and I am prepared to order that D be removed as administratrix of the Estate.

27.  As to who should replace D, in his affirmation, P1 states he is a security guard. Although there is no information about P1’s education or background, he has the approval of all the other beneficiaries in issuing the originating summons and P2 joins in being one of the plaintiffs.  In fact, as said earlier, the other beneficiaries have each signed a Deed of Renunciation of their entitlement in the Estate (including P2). No other person has been put forward to replace D. The Estate is not of a substantial value.  Having considered the evidence, I am prepared to grant an order that P1 be appointed as the administrator of the Estate upon D being removed.

28.  As for costs, as said, D had instructed solicitors HHL to act for her in relation to the matters of the Estate prior to her disappearance. D should have been advised and/or otherwise she is aware of her duties as administratrix. I see no reason why costs should be not paid by her personally.

29.  I thus make an order in terms of the draft order submitted on behalf of Ps.