CHINACHEM CHARITABLE FOUNDATION LTD v. CHAN CHUN CHUEN AND OTHERS

HCAP 8/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO 8 OF 2007

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J U D G M E N T

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1.  I have an application for the appointment of administrators pendente lite before me.

2.  There is no real objection to the application.  Both the plaintiff and the 3^rd defendant are neutral and do not oppose the application.  The application is indeed supported by the Secretary for Justice, the 2^nd defendant.

3.  In those circumstances, I will be brief with my reasons.

4.  The Court exercises its discretion in the matter on the basis of the materials that have been placed before the Court.

5.  First, there is a need to get in and preserve the assets of the estate, the deceased having passed away in early April this year.

6.  Second, this is particularly so when the assets are huge in value and varied in type.  Literally hundreds of companies are involved in the group of companies beneficially owned by the estate.

7.  Third, there are a number of assets which are said to be held in trust for the deceased during her lifetime and now for her estate.  The suggested trust relationships are yet to be formally established.

8.  Fourth, there is a need for the appointment of administrators pendente lite to represent the estate to settle the outstanding administration fees relating to the estate of Wang Teh Huei, the late husband of the deceased, which estate belongs beneficially to the estate of the deceased.

9.  Fifth, the present litigation is, unfortunately, likely to be protracted.

10.  Sixth, in relation to the property companies belonging to the estate, appointment of administrators pendente lite is desirable to ensure that controversial decisions are not taken without reference to the administrators pendente lite and conversely, difficult decisions that need to be taken may be taken after due consultation with the administrators pendente lite, without fear of subsequent criticisms.  Where necessary, directions on these decisions may be sought by the administrators pendente lite from the court.

11.  Seventh, the costs of the administrators pendente lite are likely to be substantial.  That certainly is a matter to be taken into account.  However, in the circumstances of the present case, that is only one of the many considerations.

12.  Having said all that, I should emphasise that I give little weight to various factual allegations against individual people that are found in the supporting evidence or those allegations that are disputed by the plaintiff in its evidence in response.  They remain mere allegations.  Many of them are, in any event, either irrelevant or immaterial to my present consideration.

13.  Having considered all the relevant circumstances of the case, including the matters specifically mentioned above, I have come to the conclusion that the Court’s discretion should be exercised in favour of appointing administrators pendente lite. 

14.  The remaining matters are the choice of the administrators pendente lite and the terms of such appointment, on which the parties are, very sensibly and reasonably, in agreement.  Having considered the parties’ proposals, I am prepared to make an order in terms of the draft order (as amended) placed before the Court this morning.

15.  I should emphasise that the administrators pendente lite are expected to keep the costs of administration as low as possible under all circumstances and that no satellite litigation will be sanctioned unless absolutely necessary.  This is particularly so when potentially, the interest of charity, and thus public interest, are involved.

16.  Finally, in fairness to the plaintiff, the Court should expressly note its position, which is as follows:  The plaintiff’s neutral position in the present application does not reflect any concern on its part as to the management of the properties and assets comprised in the estate and is not to be taken as a recognition or acceptance that the current management of the companies in which the deceased held an interest are in any way being mismanaged or else run otherwise than in the best interest of the estate.  The Court fully understands the plaintiff’s position.

17.  As regards the suggestion of designating another judge to be in charge of all administration matters, this is a new suggestion and certainly both the Court and the parties would require time to reflect on it.  Where appropriate, a decision will be made in due course.