CHU OI YAN IRENE (as the Administrator of the Estate of TSUI SHUK CHING, the Deceased) v. PAUL WING CHUEN CHU AND ANOTHER

DCCJ 6202/2020

[2021] HKDC 1487

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 6202 OF 2020

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BETWEEN

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DECISION

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The Litigations and Interlocutory Applications

1.  This is an action taken out by one sibling against the other two within a family. Discords occurred amongst them after their mother died intestate on 25 February 2020. There are 9 siblings altogether and they split into different groups. Irene, the Administratrix (the “Administratrix") commenced this action on 20 November 2020 to sue 2 of the siblings (the “defendants” collectively) for deliver-up of assets (the “Chattels”) belonging to the estate of their late mother (“the Deliver-Up Action”). The Chattels include a sum of HK$181,731.24 in an account with the Hong Kong and Shanghai Bank previously. This account was frozen before the Administratrix reactivated it in her capacity (“the HSBC Frozen Account”). There are about 37 items of jewellery which form the remaining part of the Chattel (the “Jewellery”).

2.  After demands made to the defendants to deliver up the Jewellery a report was made to the police by the Adminisratrix asking for their assistance in the investigation in a case of intermeddling of estate properties two days before the commencement of the Deliver-Up Action.

3.  It is the defence put forth by the 1^st defendant in his affirmation that without their knowing and in breach of a family agreement (“the Family Agreement”) the Administratrix applied for the grant of the Letters of Administration (the “Grant”). The defendants together with Esther, another sibling, commenced an action under HCMP 50/2021 on 13 January 2021 asking for a court order to replace the Administratrix (the “Replacement Action”).

4.  There are two summonses before me, one from each side. The first one was taken out on 1 February by the defendants to stay the Deliver-Up Action (the “Stay Application”) pending determination of the Replacement Action otherwise there might be conflicting findings made by the two courts. Counsel informed the court that the Replacement Action was heard by Mr Justice Wilson Chan just the day before the present hearing (17 November 2021) with judgment reserved.

5.  The Administratrix took out application for summary judgment for her claim (the “Summary Judgment Application”) on 5 February.

The Stay Application

6.  I shall deal with the Stay Application before the Summary Judgment Application. This is not only because the Stay Application was filed first in time, but also that the determination in the Replacement Action has bearing on the Administration Action. If the Replacement Action succeeds, the Administration Action is likely to be taken over by the newly appointed administratrix.

7.  Ms Chan opposed to the Stay Application. She said that there was urgency to deal with the deliver-up and the Summary Judgment Application had to be heard soonest. She relied on two incidents in support of the Administratrix’s fear of the Chattels being dissipated. First, she said the deposit in the Hang Seng Bank account had been withdrawn early in the morning on the same day their mother passed away[1]. It took a total of four withdrawals to exhaust the funds ($76,000) therein. Second, the 2^nd defendant had told the siblings that she was to sell the Jewellery[2] .

8.  In reply Mr Pang referred the court to read the “Mama Estate Statement as of 19 March 2020” which showed that the fund in the Hang Seng Bank account was well accounted for although it had been withdrawn[3]. It also showed the total amount of cash was $744,038 kept in 4 bank accounts held by their late mother. The 2^nd defendant denied, in her affirmation, that the withdrawals from the Hang Seng Bank account were unauthorised because they were retrieved to pay the funeral expenses. The funeral expenses ran up to $393,390. Leaving behind in cash was some $160,000 not including the fund in the HSBC Frozen Account. Further, she said she made the withdrawals under the instruction of the Administratrix[4]. The withdrawals were accounted for and some said they had got their share of $17,350 already[5]. This was not disputed by Ms Chan.

9.  The court also saw that there was an amount of $181,795.44 in the HSBC Frozen Account (the “HSBC Fund”) which the Administratrix admitted she had opened another account in her name as admininstratrix to keep the money. So the HSBC Fund is out of reach of the defendants.

10.  Mr Pang submitted that the funeral was basically arranged by the Administratrix who knew the funeral expenses well and the HSBC Frozen Account has never been under the control of the defendants, there was no basis to complain about risk of dissipation of the cash. I do not think Ms Chan could argue that part of fund was spent on the funeral. After referring the court to read the statement of the Hang Seng Bank account, she said “to be fair to the defendants, some money had been spent on the funeral”. Further the Administratrix has in her affirmation admitted that she was the one who made arrangement for the funeral.

11.  The Jewellery forms the remaining part of the Chattels. The fear of dissipation arose from the 2^nd defendant’s suggestion to sell the same. She announced that she was to sell the Jewelry in one of the family chat group messages, but she expressly said she did so in response to the requests of siblings. She invited siblings to come along to witness the sale[6]. There was no evidence to suggest that she was to pocket the sale proceeds.

12.  Ms Chan also submitted that she said there was no reason to wait for the determination on the Replacement Action as it is unlikely to succeed. In reply, Mr Pang referred me to read documents showing the delinquency of the Administratrix in her duties as such. I am of the view that since I am not here to deal with the merit of the Replacement Action and I do not have all the evidence before me in that regard, I am in no position to judge one way or the other or to pass any comments on who will win at the end.

13.  The court considers that the Administratrix has failed to make out her allegation of the possible risk of dissipation of the Chattels for reasons stated above. The court agrees with Mr Pang that the Administration Action shall be stayed pending the determination of the Replacement Action as there is a risk of conflicting judgments made in the two courts on a similar set of facts. Further if judgment is granted for the appointment of a different administratrix, such appointment may affect how the Administration Action is to be conducted. The court exercises its discretion to stay the Administration Action pending determination of the Replacement Action.

Summary Judgment Application

14.  Ms Chan submitted that the Summary Judgment Application should be argued despite of the Stay Application and the fact that the Replacement Action was heard a day before. For the record, four hours were spent on the two summonses.

15.  Mr Pang submitted that the matters and facts relating to the Stay Application and Summary Judgment Application largely overlap. In the circumstance, if the Stay Application is granted, the Summary Judgment Application shall be dismissed in limine. I do not agree. I take the view that the appropriate way to deal with the Summary Judgment Application is for it to be stayed together with the Administration Action.

16.  Since I have heard arguments on both Applications already, I now direct parties to submit the decision of Mr Justice Wilson Chan when issued to see whether further submissions are needed before this court comes to a decision on the Summary Judgment Application.

17.  Costs of the Stay Application be reserved and to be dealt with together with the costs order of the Summary Judgment Application.