YUEN KIM FUNG v. YUEN KIM WA, ADMINISTRATOR OF THE ESTATE OF YUEN WING SUM, DECEASED

HCMP 2076/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2076 OF 2014

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R E A S O N S   F O R   D E C I S I O N
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Introduction

1. The plaintiff (“P”) issued the Originating Summons herein to apply for:-

(1) The defendant (“D”) be removed and replaced by P as the administrator and trustee of the estate of the Deceased under Section 33(3) of the Probate and Administration Ordinance (Cap 10) (“Removal Application”);

(2) D do give an account on oath of all the assets of the Deceased’s estate that have come to his hands and of his dealings therewith (“Account Application”);

(3) D do deliver up to the P such an account in paragraph (2);

(4) D do deliver up to the P all assets and monies in his hands representing the assets and monies of the Deceased’s estate, including all the monies misappropriated and/or misapplied by him and all properties and benefits or their present equivalent acquired or derived therefrom (if any) (“Delivery Up Application”).

2. P’s Originating Summons was first fixed for hearing before this court on 18 September 2014 for directions when D was absent.  The hearing was adjourned to 7 October 2014 when D turned up and further directions were given.  A hearing was then fixed on 19 November 2014. D however applied for legal aid on 4 November 2014 and P then issued a summons for the legal aid stay to be uplifted.  At the hearing on 19 November 2014, this court ordered a partial uplift of the stay and made an order in terms of paragraphs (2) and (3) above in relation to the Account Application and adjourned the Removal Application and Delivery Up Application to be dealt with after the expiration of the legal aid stay.

3. Thereafter, D filed an affirmation on 3 December 2014 purportedly in compliance of the order I made on 19 November 2014.

4. At the end of the resumed hearing on 18 December 2014, I granted P’s Removal Application and Delivery Up Application and a vesting order.  The following are my reasons.

Background

5. D and P are brothers.  Their eldest brother YUEN KIM YU passed away on 10 February 2008 and was survived by a son, YUEN KAI HONG (hereinafter “Carson”).

6. On 30 March 2008, the Deceased herein (ie father of Yuen Kim Yu, D and P) passed away.  The Deceased died intestate and was survived by his wife, D, P.

7. P’s mother passed away on 31 January 2011.  She also died intestate.  For present purposes, the application before the Court only concerned the estate of the Deceased (“Estate”).

8. According to P, in or about July 2014, it came to his attention that:-

(1) Unknown to P, D had applied for grant of letters of administration on 14 April 2014;

(2) The letters of administration were granted on 14 May 2014 with D as the sole administrator (“Grant”); and

(3) The Grant was amended in or about July 2014.

9. P’s case was that D had never informed the beneficiaries of the existence of the Grant.  Nor had D properly administered the Estate.  D had never distributed any of the assets of the Estate to the beneficiaries.  In addition, D had concealed to the court his long term drug addiction.  The above were the main reasons for P’s application to remove D.

Applicable Law

10. Section 33(3) of the Probate and Administration Ordinance (Cap 10) confers on the court the power to remove an administrator and substitute and administrator where the court is satisfied that the due and proper administration of the estate and the interest of the persons beneficially entitled to the estate requires it:-

“The court may, if satisfied that the due and proper administration of the estate and the interests of the persons beneficiary entitled thereto so require, suspend or remove and 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.”

11. Mr Szeto, on behalf of P, had referred to Re Lau Yik Yam [2010] 3 HKLRD 700, a decision by the then Lam J who stated that the power to remove and substitute an administrator under the above section 33 (3) may be exercised without revoking the grant[1].

P’s Grounds for Removal Application

12. Mr Szeto submitted that the due and proper administration of the Estate and the interests of the beneficiaries of the Estate required D to be removed and be substituted by P because D was not a suitable person to administer the Estate due to his long term drug addiction. Further Mr Szeto submitted that D only made the application for the Grant to advance his personal gain and had failed to do anything to administer the Estate.

D’s Unsuitability to Act as Administrator

13. D had been alienated from his family for over 30 years.  He had not denied that he was addicted to illegal drugs and substances since about 1984 and had never been able to overcome his drug addiction.  P had also alleged that D had even kept illegal drugs in his own home.

14. P further alleged that as a result of his drug addiction, D’s home was in a state of disrepair.  It was not known if he ever married but he was in long term financial hardship and was not even able to properly look after his own daughter.

15. Mr Szeto further submitted that it was highly questionable whether D would be capable of discharging his duties as an administrator of the Estate which involved administering shares and monies in various accounts and dealing with tenancy matters in landed properties.

16. Mr Szeto also pointed out that D had failed to mention the landed properties which owned by the Deceased at the time of his death, namely, 73L and 73C Pokfulam Village in the Schedule of Assets and Liabilities (Form N4.1) filed by D on 14 April 2014.  These properties are part of the Estate and should have been included in the said Schedule of Assets and Liabilities. Mr Szeto however accepted that the omission could be remedied by the Grant being amended and was not an error that was so significant and fundamental to render the Grant ineffective or to trigger the revocation of the Grant.

17. Mr Szeto said that the manner in which the original application was filed by D was further evidence that D was unsophisticated and would not be a suitable person to administer the Estate.

Discussion

18. Even though the Grant was issued in May 2014, P had said he had not been informed of the Grant even though he was one of the beneficiaries, nor had Carson been informed, until it was accidentally discovered by Carson.  Carson had filed an affirmation to support P’s application.

19. According to Carson, on occasions, D had by-passed Carson in the collection of rental income from the landed properties of the Estate which was a responsibility that was placed upon Carson shortly after the Deceased passed away.

20. D did not really deny those allegations of P and Carson.

21. As mentioned earlier, this court ordered on 19 November 2014 that D was to provide an account by affirmation all assets of the Deceased that had came to his hands since the Grant and of his dealings therewith.  Although D did file the affirmation on 3 December 2014, Mr Szeto submitted that it could not be regarded as an account of the assets of the Deceased’s Estate nor of D’s dealings.  D had produced a statement dated 30 January 2014 showing that there was a balance at that date of HK$98,700 in a BOC securities account of the Deceased and further a copy of a passbook bearing an account number but no name of the bank or the holder, which appeared to be a bank account of the Deceased’s, indicating there was a deposit of HK$232,000 on 19 July 2014 and thereafter all sums had been withdrawn leaving a balance of only about HK$2,000 on 23 October 2014.  D produced invoices to show his purchases of some sound system equipment of about HK$28,000.  He had clearly withdrawn monies for his personal use.  There were other substantial amounts withdrawn from the bank account and unaccounted for by D.

22. Having considered Mr Szeto’s submissions, which I accept, I came to the view that D had not duly and/or properly administered the Estate.  D’s drug addiction and his need for money to feed his long term addiction indicated that he would be likely to misappropriate the monies from the Estate and to use such funds for his own personal use only.  He had further failed to provide a proper account of the Deceased’s Estate and D’s own dealings of it pursuant to this court order of 19 November 2014.  I therefore concluded that due and proper administrator of the Estate and the interest of the beneficiaries of the Estate required that D be removed.

Substitution

23. I accepted Mr Szeto’s submission that the person to replace D should be P, in accordance with the order of priority for grant in case of intestacy, as provided in Rule 21 (1) (ii) Non-Contentious Probate Rules (Cap 10A).

Deliver Up Application and Vesting Order

24. In order to facilitate the replacement of D as administrator and for P to take up the role, I accept Mr Szeto’s submission that it was necessary for D to deliver up all assets and monies of the Estate which had come into his hand and also a vesting order would be appropriate.

Conclusion

25. For all the above reasons, I granted an order in terms of P’s draft order, as amended.

[1] At para 6 thereof