CHEN CHERYL DEANNA v. CHEN PAK YIN STELLA

CACV 24/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 24 OF 2015

(ON APPEAL FROM HCAP NO. 16 OF 2008)

________________________

________________________

________________________

_________________

J U D G M E N T

_________________

Hon Kwan JA (giving the judgment of the court):

1.  This is the plaintiff’s application to stay the appeal proceedings of the defendant brought with leave granted by Deputy Judge B Chu J (as she then was) on 26 January 2015.

2.  The application arose in this way.

3.  The plaintiff brought a probate action (HCAP 16/2008) in 2008 against the defendant to challenge the validity of a will allegedly made in January 2005 by her late father. The defendant was appointed the sole executrix under that will, by which the deceased bequeathed his residuary estate in each shares to his four children, which included the plaintiff and the defendant.

4.  In 2011, the plaintiff and her son Chen Ngor Andrew brought an action in the High Court (HCA 59/2011) against the defendant seeking among other things a declaration that an enduring power of attorney allegedly executed by the deceased on the same date as the will was invalid and that the acts performed by the defendant as the attorney were invalid.  It was the contention of the plaintiff in that action that unbeknown to her and her son, relying on the enduring power of attorney the defendant effected the change of the beneficiaries of an insurance policy taken out by the deceased.  Prior to the change, the beneficiaries were the plaintiff, her son and her brother Edward in equal shares.  The change effected was that the beneficiaries became the four children in equal shares.

5.  On 7 September 2011, Registrar Lung ordered the probate action to be tried together with the High Court action before the same judge and in the order determined by the trial judge and that the evidence of one action shall be admissible in the other action.  In 2014, the probate action was ready to proceed to trial.  As for the High Court action, pleadings have not been closed to date.  According to the estimates given, the trial of the two actions would take about 20 days.

6.  In February 2014, the defendant issued a summons in the probate action seeking an order that the action be discontinued or dismissed and that an independent accountant be appointed the administrator for the estate of the deceased, and for letters of administration of the deceased’s estate with will annexed be granted to the independent accountant (“the Dismissal Summons”).  Her ground was simply that the distribution of the residuary estate would be the same whether the will was held to be valid or not, as in the event of intestacy arising should the will be held invalid, the four children would each be entitled to an equal share in the estate anyway.

7.  On 18 November 2014, the judge handed down her judgment dismissing the Dismissal Summons, for reasons not necessary to go into.  On the defendant’s application for leave to appeal, the judge granted leave on 26 January 2015.  Pursuant to leave granted, the defendant filed a notice of appeal in these proceedings (CACV 24/2015) on 2 February 2015.  On 11 June 2015, the defendant filed an application to fix a date for the hearing of this appeal.  It was estimated the appeal would be half a day.  She has not been able to proceed with fixing a date for the hearing because a summons for stay of the appeal proceedings was issued by the plaintiff on 30 June.

8.  In her summons, the plaintiff seeks an order in these terms:

“(1) To stay the proceedings of CACV 24/2015 until the final resolution of the HCA 59/2011 trial.

(2) To stay further proceedings of CACV 24/2015 or as the Court thinks fit.”

9.  The plaintiff’s grounds for staying the appeal, as appeared from the supporting affirmations of the plaintiff and her son Andrew and the plaintiff’s written and oral submissions, would appear to be as follows.

10.  The plaintiff pointed to the order of the Registrar that the two actions are to be heard together and the evidence of one action shall be admissible in the other action.  The area of dispute in both actions concerned the deceased’s mental capacity, regarding the execution of the will and the enduring power of attorney.  She contended the issues in dispute are essentially the same.  She asserted that the plaintiffs in the High Court action would be precluded from enjoying a fair trial, if the appeal in the probate action is allowed to proceed on contested issues which are essentially the same as between the parties in the two actions.  She said that the interests of the beneficiaries under the insurance policy before the change was unlawfully effected under the enduring power of attorney would be prejudiced and affected, in the event that the probate appeal is allowed, as this would result in a distribution of the proceeds of the insurance policy in different shares.

11.  The application for stay is wholly misconceived.

12.  The appeal in the probate action is concerned solely with the Dismissal Summons.  It does not involve any determination on the contested issue of the mental capacity of the deceased in the execution of the will, or the validity of any act performed by the defendant under the enduring power of attorney.  The question of who are the rightful beneficiaries under the insurance policy is not the subject matter of the probate action and is not affected in any way by the determination of the appeal in the probate action.  The proceeds of the insurance policy would belong to the beneficiaries named in the policy and do not form part of the residuary estate of the deceased on intestacy.

13.  The whole basis for the defendant seeking the Dismissal Summons is that it would make no difference to the distribution of the residuary estate whether the will is held to be valid or not, and hence it is not necessary for there to be a full trial of the probate action on the contested issue of the mental capacity of the deceased.  If the appeal is successful, there would be no trial of the probate action, resulting in considerable savings of time and costs.  The High Court action is not affected in any way and will continue to proceed to trial.  The plaintiff and her son will be at liberty to adduce such evidence as they see fit in support of their case that the deceased did not have the required mental capacity in executing an enduring power of attorney, and the trial judge would decide the case on the evidence before the court, wholly untrammelled by any finding as to the deceased’s mental capacity in the probate action (which has not been made and will not be made if the appeal should be allowed).  If the court should find in favour of the plaintiff that the deceased did not have the requisite mental capacity in executing the power of attorney and any act done by the defendant pursuant thereto is invalid, the court will give such relief to the plaintiff and her son as appropriate.  There is nothing to suggest there would be any injustice, unfairness or prejudice to the plaintiff or her son in their conduct of the High Court action.

14.  There is simply no reason why the appeal should not be allowed to proceed.  It would not be to the benefit of any one if the administration of the deceased’s estate should be further delayed for an indefinite period.

15.  We therefore dismiss the plaintiff’s summons.  We have heard both sides on costs.  We order the plaintiff to pay costs of this application to the defendant and we would assess costs on a gross sum basis.  The defendant’s solicitors are directed to provide a statement of costs for summary assessment within 7 days of this judgment.  Leave is given to the plaintiff to respond in writing to the defendant’s statement of costs within 7 days thereafter.