CHOW SHAUK YIN AND OTHERS v. CHAU HAU TUNG

HCMP 2139/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2139 OF 2006

______________________

_________________________

_______________

D E C I S I O N

_______________

Application

1. This is an application by the beneficiaries against the administrator for accounts and particulars of an estate.

Background

2. Mr. Chau Yu alias Chau Yiu, the father (“the Deceased”) died intestate on 9 June 1997 leaving the following persons entitled to share in his estate (“the Estate”):

(a)       Madam Chan Jiu Fung, his wife (“the Wife”)

(b)       Mr. Chau Hau Tung, the eldest son (“the Defendant”)

(c)       Madam Chow Shauk Yin, Madam Chau Shuk Man, Madam Chau Suk Wah and Madam Chau Shuk Ying Angel, 4 daughters (collectively “the Plaintiffs”).

3. After the death of the Deceased, the Defendant instructed Messrs. L.H. Kwan & Co. (“LHK”) to apply for the estate duty clearance.  On 9 December 2004, the Defendant herein however commenced HCA 2082/2004 against LHK, for among others, damages caused by delay in handling the estate duty clearance.

4. Nonetheless, in the meantime, with the assistance of his new solicitors firm, Messrs. Siao, Wen and Leung (“SWL”), the Defendant obtained the Estate Duty Clearance Papers and the Letters of Administration (“LA”) on 29 December 2003 and 27 August 2004 respectively.

5.  Particulars of the value of the Estate are:

	$	$
Principal value of the Estate		7,472,756.58
Less: Debt due to the Defendant	330,851.00
Funeral expenses	50,000.00
		380,851.00
Net principal value of the Estate		7,091,095.58
Out of the Estate, a sum of $2,183,738.90 estate duty was paid.

6. On the other hand, the followings are noted:

		$
(a)	Gift made to the Plaintiff 3 years prior to death	350,000.00
(b)	Gifted property (Flat A, 2/F & Roof and car parking space No. 11, 10 Fa Po Street) made to the Plaintiff 3 years prior to death	11,000,000.00
(c)	Joint Time Deposit Accounts with the Wife (Deceased’s ½ share)	7,360,206.98

7. Therefore, the following estate duties were also paid to the authority.

(a) $104,165.60

(b) $3,604,754.50

(c) $2,204,009.30

8. From about 2004 to 2006, the Plaintiffs instructed Messrs. Herbert Tsoi & Partners (“HTP”) to liaise with SWL to make enquiries and check progress of the matter.  Both parties later changed their legal representatives to their present ones, Messrs. Stevenson Wong & Co. (“SW”) and Messrs. Vongs (“V”) to continue liaising for the administration matters, including particulars of the account of the Estate.

8. On 19 October 2006, the Plaintiffs sought to resolve their dispute by commencing the present proceedings by way of Originating Summons (“OS”) under Order 85 rule 2(2)(a) and (3)(a) to (c) of the Rules of the High Court (“RHC”) seeking relief for:

“1.      That the Defendant, the Administrator of the Estate of the abovenamed Chau Yu alias Chau Yiu, may be ordered to furnish proper particulars and accounts of the abovenamed Estate and the investment, if any, thereof.

 2.      If and so far as may be necessary, administration of the Estate of the said Chau Yu alias Chau Yiu, or alternatively an Order requiring payment into court of the money held by the Defendant in his capacity as the Administrator of the abovenamed Estate.

 3.      That provision may be made for the costs of this application.

 4.      Any other relief that the Court deems fit.”

9. The Defendant contested the proceedings.  Pursuant to the Consent Order dated 8 December 2006, both parties filed and served their affidavit evidence.  I heard the substantive argument of the matter on 17 April 2007.  Mr. Leo Remedios of Counsel acted for the Plaintiffs and Ms. Josephine L.Y. Tjia represented the Defendant.  Having heard from both Counsel, I reserved my decision to be handed down.  I now do so.

Ruling

10. Upon consideration of the parties’ evidence authorities and submissions, I have come to the view that the Plaintiffs’ application fails in principle.  My reasons appear below.

Reasons

11.  Both Counsel did not dispute that the Defendant, as an administrator, was under a duty to account to the beneficiaries.  As contained in Section 56 Probate and Administration Ordinance (Cap. 10):

“The personal representative of a deceased person shall, when lawfully required so to do, exhibit, by affidavit filed in the court, a true and perfect inventory and account of the movable and immovable property of the deceased, and the court shall have power as heretofore to require personal representatives to bring in inventories.”

12. On 30 May 2006, the Defendant provided with SW the following interim account:

Interim Administrator’s Account: The estate of Chau Yu,
deceased (As at 30.05.2006)

Assets of the Estate		Assessed Value for Estate Duty (HK$)	Net Realized Value (HK$)
1. Accounts with Hang Seng Bank Limited
	a) Account No.284-0-128025	16,036.44	23,428.74
	b) Account No.284-040391-001	468,842.51	514,422.23
2. 10 shares in D.H. Shuttlecocks Limited		171.60	171.60
3. Amount due from D.H. Shuttlecocks		1,100,140.00	1,100,140.00
4. Deceased’s ½ share of interest in the business known as “Yiu Hon & Company” consists of:-
	a) Accounts with Hang Seng Bank Limited
	i)   Account No.280-220302-001 (Deceased’s ½ share)	886,495.03	1,405,362.76
	ii)  Securities Account No.280-220302-085 (Deceased’s ½ share)	1,859,774.75	1,796,399.43 (incomplete)
	b) Key Deposit in respect of Safe Deposit Box No.1000 with Tai Sang Bank Limited (Deceased’s ½ share)	500.00	---
5. 1,500 shares in Property Enterprises Limited		Nil	Nil
6. 9,921 shares in Goodyear Estates Limited		Nil	Nil
7. 12,000 shares in New World Development Company Limited		555,000.00	Not yet realized
8. 15,240 shares in Jarinde International Motor Holdings Limited		158,496.00	83,543.00
9. 10,521 shares in HSBC plc		2,422,460.25	5,348,454.78
10. Dividend due from New World Development Company Limited		3,840.00	3,840.00
Principal value of estate		$7,472,756.58	10,275,762.54
Deductions
1. Debt due to Chau Hau Tung		$330,851.00
2. Estate Duty paid		8,096,668.30
3. Interest paid for loans to pay estate duty		619,514.80
4. Transfer fees for 12,000 shares in New World  Development Company Limited		6,688.50
5. Legal fees incurred:-
	a) for administration of the estate as of 9th February 2006	459,928.00
	b) for HCA2082 of 2004 as of 6th March 2006	608,826.00
	Sub-total	$10,122,476.60
Balance			$153,285.94

13. After the commencement of the present proceedings, the Defendant provided a further interim account to the Plaintiffs on 5 January 2007.

14. The Plaintiffs were not satisfied with the accounts and made quite some complaints against the Defendant, including:

(a)       The Gifted property to the Defendant should form part of the Estate.

(b)       The Joint Time Deposit Accounts with the Wife should also form part of the Estate.

(c)       The Defendant did not duly recover Deceased’s half interest in Yin Hon & Company.

15. However, in my view, these complaints relate to the size of the Estate as well as the obligation of an administrator to recover the Estate, rather than an account of the Estate.  Such disputes cannot be resolved within the present proceedings or by way of affidavit evidence.  They are to be disputed elsewhere if the Plaintiffs should wish to pursue the matter.

16. The Plaintiffs further attempted to attack the integrity of Defendant as an administrator.  He strongly disputed.  It suffices for me to conclude that, on the evidence before me, on balance, the Plaintiffs have failed to establish the allegations.  I say so when the followings are taken into account:

(a)       At all times, the Defendant instructed solicitor firm to handle the probate matters.

(b)       He had invited the Plaintiffs to jointly administer the Estate.  However, the invitation was not accepted.

(c)       The Plaintiffs complained that the Defendant claimed to be the sole beneficiary of the Estate.  Such accusation is clearly wrong in light of the correspondence among the parties as well as the affirmation of the Defendant filed on 23 August 2004 under the Grant application HCAG 8003/04:

“1.      The abovenamed and described deceased late of the above address died at Baptist Hospital, Kowloon [Hong Kong] on 9th June 1997, intestate, leaving him surviving the following persons being the only persons entitled to share in his estate:

(a)      Chan Jiu Fung (陳鑽歡), his lawful widow and relict, now aged 76 years;

(b)     Chau Hau Tung (周賀桐), his lawful widow and relict, now aged 56 years;

(c)      Chow Shauk Yin (周淑賢), his lawful and natural daughter, now aged 55 years;

(d)     Chau Shuk Man (周淑雯), his lawful and natural daughter, now aged 52 years;

(e)      Chau Suk Wah (周淑華), his lawful and natural daughter, now aged 50 years; and

(f)       Chau Shuk Ying Angel (周淑瑛), his lawful and natural daughter, now aged 43 years.

2.      ……”

(d)     He paid over $8m out of his own pocket to clear the estate duty of the Estate.

(e)     He has been funding the litigation for the Estate against LHK in HCA 2082/2004.

17. At about the end of the hearing on 17 April 2007, I sought to clarify with the parties as to what orders they would suggest this Court to make.

(a)       Mr. Remedios asked me to deal with paragraph 1 of the OS only and adjourned paragraph 2 thereof sine die with liberty to restore.

(b)       Ms. Tjia did not seriously object to this suggestion, save on the question of costs. It was said that effort had been spent by the parties to deal with the whole of the OS.

(c)       When Mr. Remedios raised that the interim accounts lacked particulars and asked me to order the Defendant to provide “further and better particulars” on item 4(a)(i) and (ii), 8 and 9 on the interim accounts.  Ms. Tjia replied that she could only agree to the extent that inspection of the documents was to be arranged, copies thereof could be made if the Plaintiffs would pay costs and detailed calculations would be made clear in the final account.

18. Upon thoughts, I believe that the particulars sought by Mr. Remedios are reasonable in the circumstances including what, when, where and at what unit price the shares were sold.  The information is within reach of the Defendant.  After all, without these calculations, he would not be able to come up with the sub-totals under the said items 4(a)(i) and (ii), 8 and 9.  As beneficiaries, the Plaintiffs should be entitled to these particulars, even in an interim account.  There is no justification to trouble them to look for these particulars in the documents themselves.  The documents are for verification of the calculations only, if they so wish.

19. In the circumstances, I order that:

(a) The Defendant do within 28 days finish to the Plaintiffs further and better particulars on items 4(a) and (b), 8 and 9 of the Interim Account dated 5 January 2007, including but not limited to what, when, where and at what unit price the shares were sold.  For those shares not yet disposed of, details shall be provided as to their quantity, unit price and value at the date of the account.

(b) Paragraphs 2 to 4 of the OS will be adjourned sine die with liberty to restore.

Costs

20. I do not have benefit from both Counsel on the question of costs.  Nonetheless, I am of the view that the substance of the Plaintiffs’ complaints has not been established and cannot be resolved within the OS herein.  The ordering of the provision of the particulars has taken only minimal effort of the parties within the proceedings.  I therefore make an order nisi that costs of and incidental to the OS herein incurred so far are awarded to the Defendant, including all costs reserved and Certificate for Counsel for hearing on 17 April 2007 and borne by the Plaintiffs, to be taxed if not agreed.