LUI, KA LING LOUISA, the co-administratrix of the estate of LUI, WING FAI, deceased AND OTHERS v. LUI, YUNG HING JACKSON, the co-administrator of the estate of LUI, WING FAI, deceased

HCMP 2344/2024

[2025] HKCFI 3007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2344 OF 2024

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BETWEEN

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REASONS FOR DECISION

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1.  Introduction

1.1  The 1^st Plaintiff (“Louisa”) and the Defendant (“Jackson”) are the co-administrators of the estate (“Estate”) of their deceased father, Mr Lui Wing Fai (“Deceased”). The Deceased died intestate on 4 September 2019.

1.2  The 2^nd Plaintiff (“Mother”) was the Deceased’s wife, and Louisa, the 3^rd Plaintiff (“Jimmy”) and Jackson are their children, with Jackson being the eldest son.

1.3  Louisa, Mother and Jimmy (collectively “Ps”) commenced these proceedings by an originating summons dated 11 November 2024 (“OS”) against Jackson pursuant to RHC Order 85, rule 2 for a number of relief, including (1) an account and (2) an order for distribution. As regards the latter, OS §3 seeks an order “directing the Defendant to distribute the Estate by a date that the Honourable Court deems fit”.

1.4  The OS was first heard by DHCJ MK Liu on 28 January 2025, at which the learned Judge made, inter alia, the following orders (“28/1/25 Order”):

(1) Jackson do provide an account within 28 days in the manner stated at 28/1/25 Order §1;

(2) An evidential timetable was directed for parties to file and serve evidence in respect of OS §3 and the issues of costs of the OS (28/1/25 Order §§4-6);

(3) OS §3 and the issues of costs of the OS be adjourned for substantive argument on a date to be fixed with 3 hours reserved (28/1/25 Order §7).

1.5  The substantive hearing directed by 28/1/25 Order §7 came before me on 24 April 2025 (“Hearing”). At the Hearing, Ps were represented by Mr Tommy Cheung and Jackson by Mr Billy Poon, both of counsel.

1.6  Having considered the evidence filed by the parties, OS §3 and the issues of costs of the OS were further adjourned, as the issue of whether Jimmy had disclaimed his entitlement (as Jackson contended) could not be resolved on affidavit evidence. As such, the Hearing was further adjourned to 26 June 2025 with 1 day reserved (“Adjourned Hearing”) and directions were given for cross-examination of Jimmy and Jackson to take place at the Adjourned Hearing.

1.7  However, pending the Adjourned Hearing, I made an order that Jackson was to make an interim distribution to Mother in the sum of HK$5,000,000 on or before 29 Mary 2025 (“Order for Interim Distribution”). I now provide my reasons for making the Order for Interim Distribution.

2.  Background

2.1  In this section, I will only set out the facts which are relevant to the Order for Interim Distribution.

2.2  The Estate of the Deceased comprised of a number of assets, including one-third shareholding in a Hong Kong company called Manty International Limited (“Manty”). The other 2 shareholders (each holding one-third) were the Deceased’s brothers. Jackson was a director of Manty.

2.3  Manty was the registered owner of Apartment E on 34/F of Tower II, Park Towers, No 1 Kings Road, Hong Kong (“Unit 34E”). The Deceased himself was the registered owner of the adjacent unit (“Unit 34F”). Unit 34F is occupied by Mother and Jackson’s two children.

2.4  On 20 June 2021, Manty entered into a provisional sale and purchase agreement for the sale of Unit 34E at a price of HK$23,500,000. The sale and purchase of Unit 34E was eventually completed on 20 August 2021.

2.5  Following the completion of the sale of Unit 34E, Jackson provided a breakdown of the parties’ entitlement to the net sale proceeds. Jimmy was excluded as it is Jackson’s case that Jimmy had disclaimed his entitlements. According to a Jackson’s calculation sent by Whatsapp on 24 August 2021, the entitlements were (1) Mother: HK$5,774,625, (2) Jackson: HK$2,887,312.5 and (3) Louisa: HK$2,877,312.5 (“1^st Calculation”).

2.6  Following the 1^st Calculation, on 26 August 2021, Jackson made distribution to Louisa and Mother. In respect of Mother, a sum of HK$774,625 was deposited into Mother’s back account, leaving a round sum of HK$5,000,000.

2.7  In a Whatsapp message sent on 1 September 2021, the 1^st Calculation was revised to as follows: (1) Mother: HK$7,023,794.57, (2) Jackson: HK$4,827,002.075 and (3) Louisa: HK$3,711,897.285 (“2^nd Calculation”)[1]. Whilst a further distribution was made to Louisa by Jackson on 2 September 2021 following the 2^nd Calculation, no further distribution was made to Mother.

2.8  The explanation proffered by Jackson in his affirmation dated 24 February 2025 (“Jackson 1^st”) were as follows:

“[37] Our mother also expressly told me to hold a major part of the distribution to her under the proceeds of sale of the 34E Property on trust for her to maintain her livelihood. She also acknowledged such arrangement in the WhatsApp messages. There is now produced and shown to me an exhibit marked "LYHJ-11" a copy of the WhatsApp messages. There is now produced and shown to me an exhibit marked "LYHJ-12" a copy of WhatsApp messages from a group which the Plaintiffs and myself were included.

[38] While the use of the distribution already made to the 2nd Plaintiff is not subject to these proceedings, I have used our mother's funds entrusted with me for her use and benefit. There is now produced and shown to me an exhibit marked "LYHJ-13" a copy of the account between October 2021 and 2025.”

2.9  At the Hearing, Mr Poon informed me that, even taking into account all the other disputed issues to be ventilated at the Adjourned Hearing, Mother was entitled to a sum of at least HK$5,000,000, and that that sum could be paid by Jackson to Mother within 35 days (ie the extent of the Order for Interim Distribution) subject to his arguments on liability.

3.  The rival contentions

3.1  The core dispute between the parties is whether there was a trust arrangement between Mother and Jackson as contended at Jackson 1^st §37 (“Alleged Trust”), as it is Jackson’s case that distribution had already been made to Mother, albeit the distributed sum was kept by Jackson pursuant to the Alleged Trust.

3.2  On behalf of Mother, Mr Cheung submitted that there was insufficient and inadequate evidence to support the existence of the Alleged Trust. In any event, even if the Alleged Trust existed, Mother, as an adult beneficiary, was entitled to rely on the rule under Saunders v Vautier to terminate the Alleged Trust (Pacific Bulk Shipping Ltd v Topmove Ltd [2025] HKCFI 532 §165) which she did as early as on 6 and 8 September 2021 or at the latest by the commencement of the present proceedings.

3.3  On behalf of Jackson, Mr Poon submitted that the issue over the existence of the Alleged Trust is not within the scope of an administration action commenced pursuant to RHC Order 85, rule 2. Whilst he did not have an answer to Mr Cheung’s reliance on the rule under Saunders v Vautier, Mr Poon said that Mother had to commence a separate action to seek a declaration that the Alleged Trust did not exist, or even if it existed, had been terminated, and then for a consequential order that any sum retained by Jackson be paid over to Mother.

4.  Analysis

4.1  On the procedural argument advanced by Mr Poon, I did not agree with him that the issue on the existence of the Alleged Trust fell outside the scope of RHC Order 85, rule 2.

4.2  RHC Order 85, rule 2 provides, inter alia, as follows:

“(1) An action may be brought for the determination of any question or for any relief which could be determined or granted, as the case may be, in an administration action and a claim need not be made in the action for the administration or execution under the direction of the Court of the estate or trust in connection with which the question arises or the relief is sought.

(2) Without prejudice to the generality of paragraph (1), an action may be brought for the determination of any of the following questions –

(a) any question arising in the administration of the estate of a deceased person or in the execution of a trust;…”

4.3  As submitted by Mr Cheung, RHC Order 85, rule 2 is drafted in wide terms. The Alleged Trust was a defence particularly raised by Jackson in opposition to the relief sought by OS §3. I was unable to see how the issue of the existence of the Alleged Trust did not amount to a question arising in the administration of the estate of a deceased person.

4.4  On the substantive merits, in my view, Mr Cheung was correct in contending that there was insufficient and inadequate evidence to support the existence of the Alleged Trust.

4.5  As may be seen from §2.8 above, Jackson’s evidence did not condescend upon any particulars on the discussions between Mother and Jackson which purportedly gave rise to the Alleged Trust.

4.6  Insofar as reference was made to the Whatsapp communication in LYHJ-11, no specific reference was made by Jackson or his counsel on which particular parts of the WhatsApp communication were relied upon. From my own perusal, Mother said on 26 August 2021 at 16:29 as follows:

“…我就是為了你要照顧我還要為我的養老而煩惱

所以我把整數500萬放在你處

也就是知道你的壓力希望你好好

應用這500萬，

該用的地方才用

如果你用在不該用的地方，錢會像倒入海中一樣

叫天不應叫地不踩，最要緊你需要保護自己，而我

也不會欺負你

你的孝心我知道

不然我怎會給你500萬，我是否

不能說話，我一說話你就說不要再沒完沒了，這是

你們的意思嗎？”

4.7  The above message did not support the existence of the Alleged Trust. There was no reference to any money being held on trust by Jackson and the term used by Mother , as observed by Mr Cheung, was simply that the round sum of HK$5 million was being kept by Jackson and not for the specific purpose of “maintaining [Mother’s] livelihood” as contended at Jackson 1^st §37. As was pointed out in Mother’s evidence, she was unaware of any concept of trust and asking Jackson to act as a custodian of the net sale proceeds was not inconsistent with Jackson’s duty as an administrator of the Estate (Mother’s affirmation §§6 and 10).

4.8  Insofar as reference was made to the Whatsapp communication sent in the Whatsapp group which included Ps and Jackson in LYHJ-12, again no specific reference was made by Jackson or his counsel on which particular parts of the Whatsapp communication were relied upon. This was unsatisfactory because of the length of LYHJ-12. However, as observed by Mr Cheung, as early as on 6 and 8 September 2021, Mother already demanded Jackson to pay over her entitlements:

(1) On 6 September 2021 at 23:56: “我希望你忘了我是你的母親，把錢還給我，我自己養老不用你幫我養老 !!”;

(2) On 8 September 2021 at 15:47: “但是我還是要堅持一點就是哥哥把關我的錢我需要拿回來，我不需要哥哥來吧關我的錢，我有一天走了那剩下的錢你們三個才去分擔。”;

(3) On 8 September 2021 at 18:11: “Jackson我以我是你媽媽的質 (sic) 格對你說話照現在來講我的銀額因該有… 7246348.32然後你再扣去你幫我買的吸塵器定購凍肉，燒烤爐等剩餘的請轉入我的銀行帳戶限你三天之內轉入我的帳戶”;

4.9  There was no reply from Jackson. On 8 September 2021 at 21:10, Mother sent the following message: “你哥哥就是這樣說到錢不理不睬不知是誰教他的”. Jackson left the Whatsapp group at 21:35.

4.10  In LYHJ-11 and LYHJ-12, there was no reference to the Alleged Trust by anyone. As pointed out by Mr Cheung, even when the parties started exchanging correspondence through solicitors, there was still no reference to the Alleged Trust by Jackson. Louisa’s solicitors issued a pre-action letter on 21 March 2024 in which a complaint was made that Jackson had failed to properly distribute the proceeds from the sale of Unit 34E to the beneficiaries. After a holding reply on 3 April 2024, by a letter dated 9 April 2024, Jackson’s solicitors responded as follows as regards Mother’s entitlement:

“[Mother] has requested our client to keep and utilize the balance of her share for payment of her living expenses and the household expenses of the 34F Property.”

4.11  The existence of the Alleged Trust is also not supported by LYHJ-13. According to the account produced by Jackson, the monthly “maintenance” payment to Mother stopped after September 2023 and only one payment was subsequently made on 1 January 2025. According to LYHJ-13, a total sum was of around HK$549,540.51 was spent which comprised of regular payments for various utilities, internet charges, government rates, government rents and management fees for Unit 34F. Such payments could not be attributed solely to Mother as Jackson’s children also resided at Unit 34F. Further, as pointed out by Mr Cheung, the whereabouts of the remainder was unaccounted for.

4.12  It must be borne in mind that no particulars was proffered by Jackson as to when the Alleged Trust arose. The chronology was against the probabilities that the Alleged Trust existed, as the distribution of the sale proceeds was last made to Louisa on 1 September 2021 and Mother had already demanded payment of her entitlement a few days later on 6 September 2021.

4.13  Drawing the above threads together, I agreed with Mr Cheung that the Alleged Trust did not exist and any arrangement between Mother and Jackson was a custodian arrangement which was akin to Jackson taking into account the wishes of a beneficiary on distribution: Chu Wing Chuen Paul & Ors v Chu Oi Yan Irene [2022] HKCFI 804 §22 and 24-27.

4.14  Whilst not part of the operative reasoning, I also found the Alleged Trust argument entirely unattractive, as there was plainly no answer to Mr Cheung’s reliance on the rule in Saunders v Vautier and yet Jackson had persistently refused to hand over to Mother her rightful entitlements even had the Alleged Trust initially existed.

5.  Conclusion

5.1  For the above reasons, I found against Jackson that “distribution” to Mother had taken place in the manner suggested by him, namely by way of the Alleged Trust.

5.2  The amount under the Order for Interim Distribution was Mother’s minimum entitlement even on Jackson’s own case.

5.3  I therefore made the Order for Interim Distribution at the Hearing, without prejudice to Ps arguing for further distribution at the Adjourned Hearing.