LIU HUIYI v. LAU CHUNG FOON (as the administrator of the estate of TSANG YUK HING and in his own capacity) AND ANOTHER

HCMP 1850/2023

[2025] HKCFI 1061

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1850 OF 2023

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JUDGMENT

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INTRODUCTION

1.  The parties, together with Liu Hui Ling (“the Elder Sister”), were the 4 children of the Deceased who passed away intestate on 9 April 2007.  The Deceased left behind, among other things, a property located at the High Street (“the Property”).

2.  The 1^st defendant obtained the Grant of Letters of Administration (Grant No. HCAG 2930/2008) (“the Letters of Administration”) on 3 April 2008.

3.  By this action, the plaintiff seeks, inter alia, the following orders and directions:

(1)   the 1^st defendant be removed as administrator and the plaintiff be appointed in his place;

(2)   the 1^st defendant do furnish the plaintiff a true and perfect inventories and accounts of the Deceased’s estate (“the Estate”);

(3)   the 1^st defendant do vacate the Property within 21 days;

(4)   the Property be sold in vacant possession.

4.  This action was initially only commenced against the 1^st defendant who has not filed any acknowledgement of service. Upon her realisation of her non-compliance with the provision under paragraph 45 of Practice Direction 20.2[1], she applied and was granted leave by Deputy High Court Judge K C Chan on 13 September 2024 to add the 2^nd defendant as a party herein.  This joinder application was rendered necessary by reason of the 2^nd defendant’s refusal to provide a written consent to the application made by the plaintiff[2].  Be that as it may, he has not filed any acknowledgement of service after such joinder.

5.  The matter then came before this Court on 21 January 2025.  Both defendants appeared even though they had not entered appearance before the hearing.  Whilst the 1^st defendant indicated that he had no objection against the relief claimed under this action, the 2^nd defendant did not agree, primarily because he did not want the 1^st defendant to lose his home (see further below).  The 2^nd defendant also stated that if the current administrator were to be replaced, he would like to be appointed.  This Court therefore granted the 2^nd defendant leave to file affirmation in opposition by 11 February 2025.  This Court had also explained to him that, in his affirmation, he should explain why the plaintiff should not be appointed as an administratrix of the Estate, and why he himself should be regarded as a suitable candidate to be appointed. 

6.  While the 2^nd defendant did file an affirmation immediately after the Court hearing on 21 January 2025, he simply stated therein: “反對劉慧儀做遺產执行人”.  No factual matter has been included therein in support of this stance.

7.  At the hearing on 10 March 2025, the 2^nd defendant attempted to submit another document which seems to have included the matters which he would like to rely on in this action.  He explained that he did not know that he should have included such matters in his affirmation in opposition as he was not familiar with the court procedure.

8.  I do not accept his explanation, for the simple reason that I had already explained to him at the hearing on 21 January 2025 what he had to include in his affirmation.  Further, I have already adjourned the matter once on 21 January 2025 because of his ignorance of the procedure, so that he could be given a chance to raise his objection against the plaintiff’s application.  There is no reason why he should be given yet another opportunity which would cause further delay to the matter.  I therefore refused to grant him leave to file any further affirmation.  His new document submitted to the Court should therefore be disregarded.

BACKGROUND OF THE APPLICATION

9.  The background of the plaintiff’s application is quite straight forward.  It is said that, despite the fact that the Letters of Administration was issued back in 2008, the main component of the Estate, i.e. the Property, remains unsold.  Instead, it has been used by the 1^st defendant as his residence all these years without any payment of rent.  Furthermore, the 1^st defendant has failed to provide any proper account of the Estate.  While the plaintiff has specifically requested the 1^st defendant to sell the Property so that the sale proceeds may be distributed among the 4 siblings, such a request has been rejected by the 1^st defendant.  The plaintiff therefore claims that this is a clear case in which the 1^st defendant has not properly discharged his duty as administrator of the Estate.

APPLICABLE LEGAL PRINCIPLES

Duty to keep proper accounts

10.  Section 56 of the Probate and Administration Ordinance (Cap.10, Laws of Hong Kong) (“the Ordinance”) provides that:

“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.”

11.  In Re Estate of Lee Da Kor [2010] 1 HKLRD 415, Poon J (as Poon CJHC then was) explained that:

“17. It is the duty of an executor to keep clear and accurate accounts, and to be always ready to render such accounts when called upon to do so : see Halsbury’s Laws of Hong Kong, 2008 Re-Issue, Vol.27, para.425.897. In order to provide a true and perfect account, the executor must provide details of the whereabouts of all properties (including cash) which he is bound to administer : see Edwin Kwok Wing Yun v Lee Shuk Yee, HCMP3904/2001, unreported, 7 June 2002, per Chung J at para.19.

18. Further, under section 56 of PAO, personal representatives are, when so ordered by the court, to exhibit on oath in the court a full inventory of the estate and render an account of the administration of the estate to the court. Correspondingly, the court may under Order 85, rule 2(3) of the RHC order executors to furnish and verify accounts.

[…]

20.   In opposing the application, Mr Lin first submitted that what the plaintiff is really after is the Monies.  The repeated inquiries for information about the estate were to pressurize the executors to cave in to his request for distribution of the Monies.  Once the Monies are ordered to be distributed to him, there is no need for an account.  I disagree.  The plaintiff is also entitled to share in the residue estate after the distribution of the Monies.  A proper and full account is necessary for the due administration and distribution of the residue estate.”

Removal of executor

12.  Section 33(3) of the Ordinance provides that:

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

13.  The court’s discretion under section 33(3) of the PAO has been summarised in Law Wai Hay v Law Po Chong Priscilla [2021] HKCFI 3017 at [28]:

“(1) The discretion to remove an administratrix under section 33 of the PAO involves an assessment and a value judgement in all the relevant circumstances of whether removal is required for the due and proper administration of the estate and the interests of the beneficiaries.

(2) Not every mistake or neglect of duty, or inaccuracy of conduct of trustees will induce to court to remove the administratrix.

(3) The acts or omissions must be such as to endanger the trust property or to show a want of honesty, or want of proper capacity to execute the duties, or a want of reasonable fidelity.

(4) Hostility between the administratrix and the beneficiary is not a ground for removal, unless the breakdown of the relations between them is such as to lead to the administration coming to a standstill, or makes it difficult or impossible for the administration to be completed by an existing personal representative.

[Tsang Wing Kwai v Tsang Wing Fai (No 2)[2019] 1 HKLRD 1300 (CA); Tsang Wing Kwai v Tsang Wing Fai [2018] HKCFI 1060 (CFI), §§27-32; Chang Wing Ka John v Chang Wing Dee [2021] HKCFI 47, §§157-160].”

14.  In Chang Wing Ka John v Chang Wing Dee & Another [2021] HKCFI 47, DHCJ To further explained the legal principles on the removal of administrators under section 33(3) of the Ordinance as follows:

“159. In exercising its discretion, the court should have regard to the size of the estate, the nature of the assets that need to be administered, the background and education, training and experience of the remaining and substituted personal representatives and the interests of the beneficiaries: see Wong Tat Lun Eddie & Ors v Wong Chi Ho Jimmy & Ors [HCMP 2391/2013 (unreported), 21 October 2014 at §72]. The view of the majority beneficiaries is a relevant factor: see Chan Yu Hong v Chan Kam Hong [HCMP 888/2013 (unreported), 19 July 2017 at §108, per B Chu J]. The discretion is to be exercised with great caution and sparingly. In general, removal of a representative is not to be preferred unless the administration is still far from completion:Chan Yu Hong [Supra at §3 3per B Chu J]. The courts are reluctant to exercise the discretion where the incumbent executor or administrator wishes to carry on, without allowing that incumbent an opportunity to repair or remedy any defects and progress promptly with due administration. The fact that administration of the estate could have been done better is not of itself sufficient ground:Wong Tat Lun Eddie & Ors [Supra at §85 per DHCJ B Chu (as she then was)]. Hostility between the trustee and beneficiaries as such is not a ground for removal of the trustee, unless the breakdown of relations between them is such as to lead to the administration coming to a standstill, or makes it difficult or impossible for the administration to be completed by an existing personal representative: Chan Sau Heung v Kwan Siu Fai [HCMP 2620/2012 (unreported), 17 April 2013 at 15, per Poon J (as he then was)]; Re Estate of Kwan Chung [[2013] 6 HKC 29]; Jones v Firkin-Flood [[2008] EWHC 2417 (Ch)].”

15.  In Chu Wing Chuen Paul & Others v Chu Oi Yan Irene [2022] HKCFI 804, Wilson Chan J also had the following to say:

“40. Although it is the duty of the administratrix to provide an account of the Estate upon request, I agree that a delay in doing so does not automatically calls for a removal, but may depend upon the circumstances of the case.

[…]

42. Further, in Chang Wing Ka John v Chang Wing Dee (supra), at §186, the court explained that sincerity and intention of the administrator in performing his obligations would be taken into account by the court.”

Order for sale

16.  Order 85 rule 2 of the Rules of the High Court (Cap.4A, Laws of Hong Kong (“the RHC”) provides that:

“(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)          […]

(3) Without prejudice to the generality of paragraph (1), an action may be brought for any of the following reliefs—

(a) […];

(b) […];

(c) an order directing a person to do or abstain from doing a particular act in his capacity as executor, administrator or trustee;

(d) an order approving any sale, purchase, compromise or other transaction by a person in his capacity as executor, administrator or trustee;

(e) an order directing any act to be done in the administration of the estate of a deceased person or in the execution of a trust which the Court could order to be done if the estate or trust were being administered or executed, as the case may be, under the direction of the Court.

17.  Order 85 rule 6 of the RHC further provides that:

“Where in an administration action an order is made for the sale of any property vested in executors, administrators or trustees, those executors, administrators or trustees, as the case may be, shall have the conduct of the sale unless the Court otherwise directs.”

18.  Hence, this Court has power to direct the administrator to sell a property belonging to a deceased’s estate under Order 85 rule 2 of the RHC and direct how the sale is to be effected.  For example, if there are occupiers in the property, then the court may give directions as to whether the property is to be sold with or without vacant possession.

THE PLAINTIFF’S APPLICATION TO AMEND

19.  On 6 February 2025, the plaintiff took out a summons to further amend the Originating Summons such that the 1^st defendant would be sued not only in his capacity as administrator of the Estate but also in his personal capacity.  This amendment is necessary because the plaintiff has applied for an order that the 1^st defendant shall vacate the Property.  I see no reason why leave should not be granted to the plaintiff for the purpose of curing this procedural defect. 

20.  I therefore make an order in terms of the said summons.

DISCUSSION

21.  I agree that this is a clear case in which the 1^st defendant should be removed as the administrator of the Estate.  Despite the long passage of time since the grant of the Letters of Administration, he has not completed the administration of the Estate.  There is also serious conflict of interest as he has been occupying the Property in all these years in total disregard of the interest of the other beneficiaries of the Estate.  Neither has he rendered any account of the Estate.  He has also ignored the plaintiff’s very reasonable request to sell the Property. 

22.  I am also satisfied that, on the basis of the materials properly placed before this Court, the plaintiff is an appropriate candidate to replace the 1^st defendant.

23.  I should also add that, given the 2^nd defendant had told this Court on 21 January 2025 that he considered that the 1^st defendant should not be asked to vacate the Property, there is no doubt that the 2^nd defendant should not be appointed as a new administrator of the Estate.

24.  I therefore make the following orders:

(1)   The Letters of Administration (Grant No. HCAG 2930/2008) in respect of the Estate granted to the 1^st defendant be revoked.

(2)   The 1^st defendant be removed as the administrator of the Estate, and the plaintiff be appointed as the administratrix of the Estate in his place.

(3)   Lodging of the Letters of Administration by the 1^st defendant with the Probate Registry be dispensed with.

(4)   The 1^st defendant as administrator of the Estate do furnish the plaintiff with a true and perfect inventories and accounts of the Estate (“the Inventories and Accounts”) and the 1^st defendant’s dealings of the assets upon grant of the Letters of Administration up to the date of this order with all supporting documents by way of an affirmation within 28 days from the date of this order.

(5)   Simultaneous upon the furnishing of the Inventories and Accounts, the 1^st defendant do deliver to the plaintiff, and allow the plaintiff to retain, the original copies of all supporting documents in relation to the Inventories and Accounts.

(6)   A fresh grant of Letters of Administration of the Estate be issued to the plaintiff upon compliance with the usual procedures required by the Registrar of the Probate Registry.

(7)   All the assets of the Estate be vested in the plaintiff as administratrix of the Estate upon the issuance of the fresh grant of the Letters of Administration to the plaintiff.

(8)   The 1^st defendant do deliver up to the plaintiff all assets, monies, proceeds and documents of the Estate within 21 days of this order.

(9)   The 1^st defendant do vacate the Property[3] within 56 days of this order.

(10)  The Property be sold in vacant possession.

(11)  The 1^st defendant do pay the plaintiff as administratrix of the Estate all sums found due on taking of such accounts.

25.  I have given 56 days for the 1^st defendant to vacate the Property, which is slightly longer than the time asked for by the plaintiff, since the 1^st defendant has told this Court that he may need a bit of time to find a new place of residence. 

COSTS

26.  Since these proceedings are made necessary for the sole reason of the 1^st defendant’s breach of his duty as administrator of the Estate, I am of the view that he should bear the costs of the action personally in principle.  However, since he has indicated at the hearing on 21 January 2025 that he would not object against the reliefs claimed (and such a stance has been maintained at the hearing on 10 March 2025), I do not think he should be liable for the costs of the hearing on 10 March 2025.

27.  On the other hand, while the 2^nd defendant has refused to provide a written consent to the plaintiff’s substantive application (which rendered it necessary for the plaintiff to take out the joinder application), the 2^nd defendant has not filed any acknowledgement of service at the end of the day.  In other words, the 2^nd defendant’s refusal to cooperate has initially only led to the plaintiff having to incur costs for the joinder application.  I have not lost sight of the fact that it was also because of the 2^nd defendant’s objection at the hearing on 21 January 2025 that the hearing on 10 March 2025 was required.  But still, I consider it unfair if the 2^nd defendant is ordered to bear the costs of the whole action.

28.  With the above in mind, I make the following costs order nisi:

(1)   The costs of the proceedings (excluding costs of the hearing on 10 March 2025 and of the joinder application) be paid by the 1^st defendant personally to the plaintiff within 28 days.  Such costs be summarily assessed at $46,300.

(2)   The 2^nd defendant shall bear the plaintiff’s costs of the joinder application (made by way of summons filed on 22 July 2024) as well as the costs of the hearing on 10 March 2025 which is summarily assessed at $41,650.  Such costs shall be paid within 28 days.

29.  The above order nisi shall become absolute in the absence of application to vary (which, if any, shall be made by letter, and will be disposed of on paper) within 14 days hereof.

INTERPRETATION OF THIS JUDGMENT

30.  As nearly all court documents filed in relation to the merits of this action are written in English[4], I have decided to write this Judgment in English.  As I informed the 1^st and 2^nd defendants at the hearing on 10 March 2025, a court interpreter will be available when this Judgment is handed down, who will interpret the entire Judgment to them at their request.