TSAO CHI CHING v. TSAO LUNG MAY

CACV132/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 132 OF 2013

(ON APPEAL FROM HCCA NO. 2054 OF 2012)

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J U D G M E N T

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Hon Chu JA giving the judgment of the Court:

Introduction

1.  This appeal is brought by Madam Tsao Lung May (“the respondent”) against the decision of Deputy High Court Judge Marlene Ng (“the Judge”) dated 22 May 2013 refusing to give permissionfor her to appeal out of time the judgment of Master Levy (“the Master”) dated 7 February 2013.  By the judgment, the Master granted letters of administration of the estate of Tsao Chin Tsai (曹進才) (“the Deceased”) to Mr Tsao Chi Ching (“the applicant”) and dismissed the respondent’s application for grant of administration.

2.  The Deceased was married to Madam Chik Chu Sau (戚珠秀), who predeceased him.  They had three sons and four daughters.  The respondent is the second child and the eldest of the daughters.  The applicant is the fifth child and the youngest of the sons. 

3.  The Deceased passed away on 18 April 2011.  He died intestate.  All his seven children are entitled to share in his estate (“the Estate”) and administration in the same degree under rule 21(1)(ii) of the Non-Contentious Probate Rules, Cap.10A.

Proceedings leading to this appeal

4.  On 13 December 2011, the applicant made an application for grant of administration of the Estate in HCAG 15551/2011.  On 14 December 2011, the respondent made a similar application in HCAG 15682/2011. On 22 May 2012, the applicant entered a caveat under HCCA 2054/2012.

5.  By summons filed on 14 August 2012 in HCCA 2054/2012, the applicant applied for letters of administration of the Estate be granted to him and for dismissal of the respondent’s application for grant.  Both the applicant and the respondent were then legally represented and had filed affirmations in respect of the summons. 

6.  After a contested hearing, Master Levy ordered by her written judgment dated 7 February 2013 that:

(1)  Upon filing the requisite papers for application for grant and satisfactorily answering all requisitions by the registrar, the applicant be granted letters of administration of the Estate;

(2)  The respondent’s application for grant of letters of administration of the Estate be dismissed;

(3)  The caveat filed by the applicant shall cease to have effect; and

(4)  On a nisibasis, the applicant’s costs of the application, including costs reserved, together with certificate for counsel be paid out of the Estate, to be taxed if not agreed.

7.  On 12 March 2013, the respondent, acting in person, filed a notice to appeal the Master’s judgment out of time.  By her decision handed down on 22 May 2013, the Judge refused to extend the time for the respondent to appeal the Master’s judgment.

8.  On 18 June 2013, the respondent served a notice of appeal to appeal the Judge’s decision.  Both the applicant and the respondent act in person in this appeal.

Applications to adduce fresh evidence

9.  Before turning to the appeal, it is necessary to deal with three summonses issued by the respondent and one summons filed by the applicant.  Two of the respondent’s summonses filed on 29 September and 28 October 2014 and the applicant’s summons filed on 22 January 2015 are applications to adduce fresh evidence.  The othersummons filed by the respondent on 29 September 2014is an application to summons a witness 陳祖昌 (“Mr Chan”). 

10.  I deal firstly with the respondent’s summonses to adduce new evidence.  The fresh evidence that she seeks to adduce is contained in section F of the appeal bundle, except pages 8 to 12 which is not new evidence.  The documents fall into the following categories:

(1) The respondent’s affirmation dated 28 November 2013 (pp.1-7);

(2) Documents relating to the respondent’s claim of $5 million debt due from the Estate (pp.13-15, 23 and 118);

(3) Statutory declaration of Mr Chan dated 23 May 2013 and a picture of Mr Chan, the Deceased and other people (pp.16 and 26);

(4) Documents relating to the respondent’s past employments and her voluntary service (pp.17, 18, 20 and 96-117);

(5) Documents relating to the care of the Deceased (pp.19 and 25);

(6) Order of the Guardianship Board appointing the Director of Social Welfare as the guardian of the Deceased (p.21);

(7) Medical document and hospital records of the Deceased (pp.22 and 27-95);

(8) Statutory declaration made by Tsao Lung Hoi dated 30 June 2011 (p.24);

(9) Marriage registration certificate of the Deceased and Madam Chik (p.119); and

(10) Medical certificate relating to the respondent (p.120). 

11.  Category (1) has not been filed with the court.  It is in the nature of a submission. We will treat it as her submission in support of her present appeal.  Categories (6) is the first page of an exhibit (TLM-2) to the respondent’s affirmation dated 3 October 2012 which was before Master Levy at the hearing of the applicant’s summons dated 14 August 2012.  It is not new evidence.     

12.  Categories (7) and (8) and part of the documents in categories (4) and (5)[1] are documents which the Judge did not permit the respondent to use at the hearing before her (see §15below and §§28 to 32 of the Decision).  The rest of the documents in section F are completely new evidence adduced for the first time in this appeal.

13.  An appeal to the Court of Appeal is not a retrial. The Court of Appeal will not accept new evidence unless the conditions laid down in Ladd v. Marshall [1954] 1WLR 1489 are met, namely,first, it must be shown that the new evidence could not have been obtained with reasonable diligence for use at the trial; second, the new evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; and third, the new evidence must be apparently credible, though it need not be incontrovertible.

14.  In connection with her application to appeal out of time, the respondent had filed a total of four affirmations, three of which contained new documents and evidence.  With no objection from the applicant, the Judge gave permission for these affirmations to be relied upon for the application to appeal out of time (§§22 and 27 of the Decision). 

15.  In addition, the respondent had also between 17 January and 8 March 2013 filed severalstatements bearing the heading “擬親自行事通知書” (notice to act in person) and with documents attached.  At the hearing before the Judge, the respondent applied for permission to rely on these statements and documents, which was opposed by the applicant (§§28 and 29 of the Decision).  For reasons given in §§30 to 32 of the Decision, the Judge refused to allow the respondent to rely on these statements and documents.

16.  Apart from pages 14, 15, 26, 112-115, 117 and 120 of section F of the appeal bundle, all the other new evidence that the respondent wishes to adduce in this appeal were in existence at the time of the hearing before Master Levy, when she was legally represented.  The respondent has not demonstrated why these documents were not available to her or could not have been obtained by her with reasonable due diligence.  The respondent said that she had provided some of the documents to her former legal representatives but they failed to put them into evidence. Assuming this is the case, as the Judge had observed, whether it is due to misunderstanding between the respondent and her legal representatives or the failure of the respondents’ legal representatives to carry out her instructions, it remains a fact that before the Master, the respondent’s position under legal advice was that the evidence she had adduced by way of affirmation was sufficient for her purpose.

17.  Further, when the respondent applied to the Judge for leave to appeal out of time, she had filed four new affirmations.  There is no good reason for not including in the new affirmations all the documents that existed at the time of the hearing before the Judge (which include also pages 14 and 15 in section F of the appeal bundle).

18.  Moreover, having regard to the basis on which the Judge concluded that the respondent’s intended appeal against the Master’s judgment has no merits (see §§24 to 29 below), the bulk of these documents is irrelevant to the issues in this appeal.

19.  As to the documents that came into being after the hearing before the Judge (i.e. pp.26, 115, 117 and 120 in section F of the appeal bundle), they are also not relevant to the issues in this appeal.  The purpose of Mr Chan’s statutory declaration (p.26 in section F) is to say that the applicant had been untruthful when he said the Deceased had a factory in Shanghai.  Even assuming that the applicant was wrong about this, it has not been demonstrated how this would affect the suitability or capability of the respondent to be the administrator of the Estate.  As the applicant does not base his application for grant or object to the respondent’s application for grant on the bad character of the respondent, and since the Judge did not consider the respondent’s health a relevant consideration (§86 of the Decision), the voluntary social service undertaken by the respondent (p.117 in section F) and her health condition (p.120 in section F) are also irrelevant.                  

20.  Since the first two conditions in Ladd v. Marshall are not met, it is not necessary to consider the third condition.  The respondent’s two summonses to adduce fresh evidence are dismissed.

21.  As to the respondent’s application to summons Mr Chan to testify, this is also in the nature of an application to adduce new evidence in the appeal.  For the reasons given above, this application also does not satisfy the first two conditions in Ladd v. Marshall and must be dismissed.

22.  With regard to the applicant’s summons to adduce fresh evidence, the new evidence comprises two affidavits from Tsao Lung Cheung and Tsao Mei Fong, and an affirmation from Tsao Kum Fong.  The main point made in the siblings’ affidavits and affirmation is to challenge the respondent’s assertions that the Estate is indebted to her in the sum of $5 million and that the Deceased had given her a blank cheque for her to fill in the amount.  The applicant explained that his application is triggered by the respondent’s application to adduce fresh evidence relating to the claim of $5 million debt.  Since we refuse the respondent’s application, the applicant’s application has become unnecessary.  We therefore make no order on the applicant’s summons.

The appeal

23.  I turn now to deal with the appeal.  The issue in this appeal is whether the Judge is correct in her conclusion that the respondent’s intended appeal against the Master’s judgment has no merits such that she should not be permitted to appeal out of time.  

24.  The Judge’s conclusion is founded on two bases.  Firstly, the Judge accepted that the applicant has the support of the majority of the siblings in that, while the other two sons adopted a neutral stance, the other three daughters all supported his application (§§77 and 78 of the Decision).  The Judge was of the view that: “Even though this factor of itself may not be decisive, it is an important consideration that lends weight to [the applicant’s] claim that he is the one suitable for the administering the Estate.” (§82 of the Decision)  The Judge, however, did not think a related ground of the applicant, namely, the other siblings found the respondent personally objectionable would add much more to the considerations (§83 of the Decision). 

25.  Secondly, the Judge had regard to the respondent’s claim that the Estate is indebted to her for $5 million and the potential conflict of interest on the part of the respondent arising out of this claim.  The Judge stated (at §§98 to 99 of the Decision):      

“98. In the Schedule of Assets and Liabilities that May filed with her application for grant of administration for the Estate, the assets were mainly cash in banks and stocks and shares with a total estimated value of under HK$4,000,000.00, and an immoveable asset being the Home. But May claimed the Estate owed her a sum of HK$5,000,000.00. Such sum is substantial as compared with the indicated value of the Estate. There is at present no information as to the nature of and reason for the alleged debt. In due course, the appointed administrator will have to carefully and impartially consider and assess the viability of this alleged debt. Anything less may draw unnecessary conjecture as to the propriety of the administration of the estate.

99. In my view, May’s interest as an alleged major creditor of the Estate might be incompatible with the interests of the Estate in that this alleged debt might create inherent perceived or actual conflict of interest if May were granted administration of the Estate.  This is especially so when there was already disharmony amongst the Siblings some of whom plainly did not find May trustworthy.  After all, one of the tasks of the administrator of the Estate would involve scrutinising and, where appropriate, repaying the alleged debt of HK$5,000,000.00 to May.  In my view, this is a consideration that militates against May’s suitability in acting as administratrix.”

26.  Initially in his affirmations, the applicant also relied on the respondent’s bad character as an objection to the respondent’s application for grant of letters of administration.  This was not pursued both before the Master and the Judge(see §35 of the Decision). 

27.  As to the respondent’s grounds based on her own good character and suitability, the bad character of the applicant, his poor health and the fact that he is resident in Australia, they were not upheld by the Judge.  The respondent’s health and past employment were considered to have no bearing on the matter in question (§§86 and 88 of the Decision). The Judge also did not find the respondent’s objection based on the applicant’s bad character valid (§§67 to 70 of the Decision).   The Judge further did not accept there was sufficient basis for the respondent’s suggestion that the applicant was unable to handle the administration of the Estate due to poor health or that his residence in Australia and employment history casted doubt on his suitability and capability (§§90, 93 and 96 of the Decision). 

28.  In respect of the evidence filed by the respondent on the application to the Guardianship Board, the care and welfare arrangement of the Deceased and the reports made to the police, the Judgefound that they demonstrated serious disagreements between the applicant, on the one hand, and the respondent and the other siblings, notably the other three daughters, on the other hand, over the care and welfare of the Deceased (§§59 and 63 of the Decision).  The Judge however did not regard such evidence as relevant to the issue of bad character or suitability of the parties to be administrator. 

29.  The Judge noted that the respondent’s explanation for the 19 days’ delay in appealing against the Master’s judgment was not satisfactory. Nevertheless, she regarded the just resolution of the dispute between the parties was the primary consideration in exercise of her discretion.  After a careful consideration of the arguments advanced by both sides in support of their respective applications for grant of letters of administration, the Judge was of the view that the respondent’s intended appeal had no merits.  There being no justifiable basis to extend the time for appeal, the Judge dismissed the respondent’s application for leave to appeal out of time. 

30.  In her Notice of Appeal, the respondent stated[2] she is the beneficiary of the Estate, but that provisions have to be made for the retirement and maintenance of Tsao Lung Cheung and Tsao Lung Hoi, who are the Deceased’s eldest and second sons.  Since the Deceased died intestate, all his children are entitled in law to share equally in the Estate.  They are also entitled in the same degree to apply for grant of administration.  The Judge when making her decision had already taken these matters into account. 

31.  In her affirmation dated 28 November 2013, the respondent put forward a number of matters, the vast majority of which had been argued before the Judge and canvassed in the Decision.  Having considered the reasons given in the Decision, I agree with the Judge that they have no bearing on the matter before her and they also do not form valid objections to granting the administration to the applicant.

32.  The respondent now asserts that the debt due from the Estate to her is not $5 million but the total value of the Estate because the Deceased had left her a signed cheque with the date and amount in blank.  Bearing in mind this is

the first time that the respondent makes such an assertion, and that the previous claim of $5 million debt was included in the Schedule of Assets and Liabilities which the respondent had drawn up and verified on oath, the veracity of her present assertion must be viewed with circumspection.  More importantly, even if this latest assertion were true, it only serves to reinforce the Judge’s point that this places the respondent under a potential conflict of interest such that she should not be granted the administration of the Estate. 

33.  As to the statutory declaration of Mr Chan and the voluntary social service undertaken by the respondent in the past 22 years, they are for reasons stated above irrelevant to the issue in this appeal.

34.  In our view, the Judge is correct to have regard to the fact that the applicant has the support of the majority of the siblings who are the beneficiaries of the Estate, and that the respondent comes under a potential conflict of interest by reason of her claim as a creditor of the Estate.  The Judge is also correct to disregard the various other matters raised by the parties and set out in her Decision.  The Judge’s conclusion that there is no merit in the respondent’s intended appeal against the Master’s judgment cannot be faulted. There is accordingly no basis to interfere with her discretion not to extend the time for the respondent to appeal. 

35.  Accordingly, the respondent’s appeal is dismissed.

Costs

36.  There is no reason to depart from the normal rule of costs follow event.  We order the respondent to personally pay the applicant’s costs in this appeal, including the costs of the respondent’s three summonses.  On a nisi basis, we determine the amount of the applicant’s costs to be $5,000.  Any party wishing to vary the amount should within 14 days from the date of this Judgment apply to the court in writing giving the reasons and serving a copy on the other party.  The other party may, if so wish, within 14 days thereafter lodge with the court and serve on the applying party an objection to the application.  If neither party applies for variation within the 14 days’ period, the amount shall become absolute thereafter.