SAM SIEN SAN ALBERT v. SAM MO YEE

HCMP 1203/2016

[2019] HKCFI 764

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1203 OF 2016

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JUDGMENT

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Introduction

1.  The plaintiff, Sam Sien San Albert (“Sien San”), and the defendant, Sam Mo Yee (“Mo Yee”), are brother and sister.  They are the co‑executors of the estate of their parents, Sam Tin (“the Father”) and Wong Lai Chee (“the Mother”) (and “the Parents” collectively).

2.  The Parents made mutual wills in virtually identical terms on 18 March 1997.  They appointed each other as the sole executor of his or her will; but if the other died in his or her lifetime or, after his or her death without having proved his or her will, they shall appoint Sien San and Mo Yee jointly and severally to be the executors of their wills.

3.  The Mother died on 6 June 1999, and the Father had not proved her will.  The Father died on 11 March 2001.  In accordance with the said provisions in their wills, probate of the Mother’s estate was granted to the parties on 18 July 2007 whereas probate of the Father’s estate was granted to the parties on 11 March 2008.

4.  Under the wills of the Parents, their estates were divided into 10 equal parts to be distributed as follows: 4 parts to Sien San, 4 parts to Mo Yee, and 2 parts to their grandson (ie the son of Sien San).

5.  Notwithstanding the long lapse of time since the death of the Parents and the grant of probate of their estates, the parties have not been able to complete the administration of their estates due to various disputes.  These disputes give rise to the present legal proceedings.  The parties confirmed in their closing submissions that the issues that I need to resolve are as follows.

6.  First, Sien San claims that Mo Yee received dividends distributed by a Taiwan company called豪園股份有限公司 (“the Taiwan Company”) between August 1999 and March 2001 as trustee for the Father.  Mo Yee claims that they were given by the Father to her as gift.

7.  Second, Mo Yee claims that Sien San holds 50% of the balance in the joint name accounts at HSBC (ie account nos 126404882, and 126508118888) he held with the Mother (“the HSBC Joint Accounts”) on trust for the Mother. Sien San claims that he is entitled to keep the balance because of survivorship.

8.  Third, Sien San applies to remove Mo Yee as the executrix of the estate of the Parents.  He relies in particular on how Mo Yee had allegedly mismanaged (a) the funds in the accounts of the Mother at Citibank (ie account nos 60246375 and 80269370) (“the Citibank Accounts”); and (b) a car parking space ie No 247, 2^nd storey of Car Ports, Louisa Building belonging to the Father (“the Car Park”).  Mo Yee denies all these allegations.

9.  I shall deal with the above issues in turn.

The dividends distributed by the Taiwan Company

10.  As stated by the authors in Williams, Mortimer and Sunnicks, Executors, Administrators and Probate (21^st ed, 2018), §§50 – 73, p 923:

“ … in equity, one representative may bring an action against another. Thus, one of the executors may sue the other for an account and payment of money owing by such other executor tothe testator at the time of his death, and the persons beneficially interested in the estate are not necessary parties. Thus, if one of two or more executors wishes to enforce a claim of the estate against another proving executor, he can only do so by instituting administration or other equitable proceedings.”

11.  The Father used to hold shares in the Taiwan Company.  From time to time, the Taiwan Company would distribute incomes and bonuses, which I shall describe collectively as dividends.

12.  On 16 August 1999, the Father executed a document in Chinese, which reads, inter alia, as follows: (“the 16/8/1999 Letter”):

“ 敬啟者：本人沈庭日前簽發沈羨生提款文件註銷無效，有關豪園股份有限公司每次派紅由羅永順沈慕兒夫婦處理。”

羅永順 (“Mr Lo Wing Shun”) is Mo Yee’s husband.  The 16/8/1999 Letter was addressed to a manager of the Taiwan Company.  It was signed by the Father and witnessed by a good friend of the Father, 方壯遂 (“Mr Fong”).

13.  Pursuant to the 16/8/1999 Letter, Mo Yee and her husband collected dividends distributed by the Taiwan Company, which were then deposited into an account of Mo Yee kept at the Liu Chong Hing Bank (account no 041260205061011) (“the LCH Account”).  The LCH Account was opened on 30 August 1999.  There is no dispute that dividends were paid into this account on five occasions between August 1999 and December 2000; and the total amount was HK$1,172,158.  The LCH Account was closed on 19 May 2003.

14.  The dispute between the parties concerns the said sum of HK$1,172,158.  Mo Yee claims that the whole sum was an unconditional gift given by the Father to her; and, further, she had spent the bulk of this sum as funeral or other expenses for the Father.  The parties have agreed that, after deducting these expenses, Mo Yee has kept a sum of HK$490,658.  The question is whether Mo Yee is obliged to pay this sum back to the Father’s estate.  The answer to this question must depend on whether the dividends received by Mo Yee were an unconditional gift, or whether they were received by her on trust for the Father only.  This would in turn depend on the intention of the Father.

15.  I agree that as the Father had passed away, I should approach Mo Yee’s evidence that there was a gift with caution even though corroboration is not required as a matter of law (eg Young Tin Kin Kenneth,the Executor and Trustee of the Will of Yang Shen Sum, deceased v Lau Lan Fong Nancy HCA 1545/2004 (6 September 2006, unreported), §52).  In this case, Mo Yee’s evidence is corroborated by that of Mr Fong.

16.  I shall first consider the effect of the 16/8/1999 Letter.  The question is how the following sentence should be construed “每次派紅由羅永順沈慕兒夫婦處理”.  The letter is a unilateral document.  In Marley v Rawlings [2015] AC 129 at 145B, §23, Lord Neuberger held that the approach to the interpretation of contracts as set out in paragraph 19 of his judgment in that case is just as appropriate for will as it is for other unilateral document.  §19 at p 144D–F reads as follows:

“ When interpreting a contract, the court is concerned to find the intention of the party or parties, and it does this by identifying the meaning of the relevant words, (a) in the light of (i) the natural and ordinary meaning of those words, (ii) the overall purpose of the document, (iii) any other provisions of the document, (iv) the facts known or assumed by the parties at the time that the document was executed, and (v) common sense, but (b) ignoring subjective evidence of any party’s intentions.”

17.  Applying these principles, in construing the 16/8/1999 Letter, I shall ignore the evidence given by Mo Yee and Mr Fong concerning the Father’s subjective intention about the use of the word “處理”.  It is important to focus on the purpose of the letter and the factual context in which it came into existence.  In this respect, I accept the evidence given by Mo Yee and Mr Fong.  The Father was unable to travel to Taiwan to collect the dividends personally due to poor health.  Hence, he needed to authorize someone to do so on his behalf.  As stated on the letter, and as Sien San said in court, he had done this once for the Father.  However, the Father had decided to revoke his authority, and authorize Mo Yee and her husband to do so for him instead.  It should be noted that the 16/8/1999 Letter was addressed to the manager of the Taiwan Company.  I believe the letter served the purpose of a written authorization to inform the Taiwan Company that, from then on, Mo Yee and her husband had been duly authorized to receive the dividends on his behalf.  I do not think the letter, by itself, can be construed as a document whereby the Father had agreed to make a gift of the dividends to Mo Yee.  Mr Yu (with Ms Ng), appearing for Mo Yee, accepts that the 16/8/1999 Letter left open the question as to what should be done after the dividends had been collected.

18.  Having said that, both Mo Yee and Mr Fong gave evidence onhow the Father intended the dividends should be handled after they had been collected.  Mo Yee said that the Father intended to give the shares in the Taiwan Company to her.  However, the formality could not be completed before the Father died.  Hence, the shares had remained in the name of theFather.  The Taiwan Company has been closed down already.  Nevertheless, the Father intended that she may keep the dividends collected as gift.  Her evidence is supported by the evidence given by Mr Fong.  As mentioned, Mr Fong witnessed the execution of the 16/8/1999 Letter and had spoken tothe Father on this issue.  Mr Fong said that the Father was very fond of Mo Yee; and confirmed that, based on what the Father told him, the dividends were given to Mo Yee as gift.

19.  Mr Sit, appearing for Sien San, submits that the dividends could be given to Mo Yee for the specific purpose of paying the Father’s medical and other expenses only. He stresses that, after the death of the Father, the dividends were distributed in accordance with the ratio stated in the Father’s Will ie 40% to Sien San, 40% to Mo Yee, and 20% to Sien San’s son.  He asks rhetorically, if Mo Yee believed that the dividends were given to her as gift, why she did not keep all the dividends after the Father died.  Upon the Father’s death, the shares in the Taiwan Company (and the dividends derived therefrom) must form part of the Father’s estate, and could no longer be the subject matter of any inter vivos gift given by the Father.  Mo Yee said that, as the Father had not completed the formality to give the shares in the Taiwan Company to her, the intended gift regarding the shares could no longer be completed after he died.  I accept that such change of circumstances had prompted her to decide not to take all the dividends collected after the Father’s death.

20.  Taking into account all relevant evidence and submissions made by counsel, I have decided to accept the evidence of Mo Yee and Mr Fong.  I hold that, on a balance of probabilities, the Father intended to give the dividends in question to Mo Yee as unconditional gift and that such gift had been completed.  In my view, the 16/8/1999 Letter was made in contemplation of a gift of the shares in the Taiwan Company to Mo Yee.  Although the gift of the shares had not been completed, the dividends derived from those shares should be considered separately.  In law, in order to complete a gift, “It is sufficient if the donee is put by the donor in possession of the chattel, or if the done obtains possession with the donor’sconcert.”  (Halsbury’s Laws of England, Vol 52, 2014, §238 at p 230).  Infact, Mo Yee had taken possession of the dividends in question by depositing them into the LCH Account.  The 16/8/1999 Letter was an instrument to facilitate the completion of the gift regarding the dividends.  There is no suggestion or evidence that the Father objected to Mo Yee putting the dividends into her personal account, or had instructed her to deal with the dividends in any particular way.  It appears that the Father was happy to let Mo Yee to decide how to use the dividends.

21.  For these reasons, I hold that Mo Yee was the beneficial ownerof the whole sum of HK$1,172,158.  It follows that she is entitled to keep whatever left after spending part of the sum as various expenses for the Father.  For the sake of completeness, in case I am wrong, there is no dispute that Mo Yee should pay back HK$490,658 to the estate of the Father.

The balance in the HSBC Joint Accounts

22.  As mentioned, there were two HSBC Joint Accounts.  In respect of account no 1264048222, the balance as at 6 June 1999 was a small sum of HK$18,891.  In respect of account no 126508118888, it consisted of time deposits, and savings in different currencies; as at 6 June 1999, the total balance stood at HK$908,866.66.  The parties have not drawn any distinction between the two accounts though the evidence given is concerned mainly, if not exclusively, with the second account.

23.  In a letter issued by HSBC dated 7 March 2003, the bank stated that:

“ By virtue of the terms of the Joint Account Mandate governing the above joint accounts, the balances thereof vest in the survivor.”

24.  The dispute between the parties concerns the beneficial ownership of the balance in the HSBC Joint Accounts.  Mo Yee said that they were opened by the Mother for convenience only in the event of the Mother’s incapacity, whether mentally or physically.  In contrast, Sien Sansaid that the HSBC Joint Accounts contained common savings; and that he and the Mother intended the survivor to take the money in the accounts in case any one of them passed away.

25.  Mr Sit relies on the Privy Council’s judgment in Whitlock v Moree [2017] UKPC 44, §29:

“ The application of this simple analysis based upon established principles about the ascertainment of beneficial interests in co-owned property leads the Board to this conclusion: that where two or more holders of a joint account all sign an account opening document (or separately sign identical documents) which, on their true construction, declare or set out their respective beneficial interests in the property constituted by the account (loosely, the money in the account), then those are the beneficial interests of the account holders, pending any subsequent variation of them by agreement or otherwise, and an examination of the subjective intention of the account holders, orof those of them who place money in the joint account, is neither relevant nor permissible. Still less is recourse to the doctrine of presumed resulting trusts permissible, because the potential beneficial owners have declared what are their beneficial interests by signed writing. …”

26.  It appears that the Privy Council’s judgment (by a 3 to 2 majority) may not be easily reconciled with the following judgment of A To J in Nanyang Commercial Bank Ltd v Personal Representative of Vannee Nativivat [2013] 2 HKLRD 749 at 763, §29:

“ Thus, the general principle is that beneficial entitlement of fundsin a joint account is to be determined by the common intentionof the account holders. A survivorship clause, without more, is just a contractual arrangement between the bank and the joint account holders as to how to deal with the money in the joint account. It is not conclusive evidence of the parties’ intentionas to ownership of the money in the joint account. The parties’ intention overrides the survivorship clause. In drawing inferenceof common intention, greater weight is to be given to the sourceof the funds in the joint account and the presumption of resultingtrust in favour of the joint account holder who provided the funds than to the survivorship clause. At the highest, survivorship clauses indicate a prima face intention only, which is by no means conclusive and can be easily displaced by the circumstances.”

27.  It is, however, unnecessary for me to try to reconcile the difference in approach adopted in the above authorities.  This is because Sien San cannot take advantage of the approach adopted by the Privy Council.  The Privy Council stressed the importance of construing the account opening document.  However, in this case, neither party has obtained the account opening form or bank mandate signed by Sien San and the Mother in respect of the HSBC Joint Accounts.  In fact, no bank statements or any relevant documents (save the said letter issued by HSBC) regarding the HSBC Joint Accounts have been produced.

28.  In the circumstances, I need to fall back on the general approach reaffirmed by the Privy Council in a more recent case, Gany Holdings (PTC) SA v Khan (BVI) [2018] UKPC 21, §17:

“ It is convenient to begin with a re-statement of the basic principles by which equity (which in this respect is shared by England and Wales and the British Virgin Islands) provides for identification of beneficial interests arising from a gratuitous transfer of property. First, if either the transferor or the transferee makes a written (or oral) declaration as to those beneficial interests, or they do so together in an agreed form, thatwill generally be decisive, regardless of the subjective intentions of either of them: see for example Whitlock v Moree [2017] UKPC 44. Secondly, in default of any such declaration, the court looks for evidence from which a common intention as to beneficial ownership may be inferred. This may include evidence of statements made by either party before, at the timeof or even after the relevant transfer, the parties’ conduct, and the factual context in which the transfer takes place. Sometimes, a choice between possible conclusions as to beneficial interest may properly be arrived at by a process of elimination, whereby the most unlikely conclusions are first removed, leaving the least unlikely as the correct one. Finally, recourse may be had to time-honoured presumptions, such as the presumption ofadvancement or the presumed resulting trust, where there reallyis no evidence from which an inference as to common intention may properly be drawn. But these are, in modern times, a last resort, now that historic restrictions on the admissibility of evidence have been removed, and the forensic tools for the ascertainment and weighing of evidence are more readily available to the court.”

29.  It follows that I need to consider the evidence given by the parties concerning the common intention of Sien San and the Mother regarding the HSBC Joint Accounts.  I must say that the absence of any relevant documentary evidence concerning the HSBC Joint Accounts has made it rather difficult for me to discern the common intention of Sien San and the Mother.

30.  Mo Yee, apparently, did not have any direct knowledge in this respect.  She believed that the HSBC Joint Accounts should be treated in the same way as the Citibank Accounts.  However, there is a material difference: for the Citibank Accounts, they were always held under the sole name of the Mother, and Mo Yee was only added as an authorized signatory at some stage; in contrast, the HSBC Joint Accounts were joint-name accounts.  It appears that Mo Yee did not know that such joint‑name accounts had been opened until after the Mother’s death. Nevertheless, she could not believe that the Mother would give all her monies in the HSBC Joint Accounts to Sien San.  It should be noted that the amounts in the HSBC Joint Accounts were more than the total amount of the Mother’s other assets.

31.  The only direct evidence concerning the common intention in relation to the HSBC Joint Accounts comes from Sien San, which I have reminded myself that I should approach with caution as the Mother had passed away.  He said that the accounts were opened in about 1996 ie a few years before the Mother died when he already decided to emigrate to Canada.  He said both he and the Mother had deposited monies into the accounts but he could not tell how much each of them had contributed.  Having said that, he accepted that the Mother had contributed the bulk of it in the region of HK$1 million.  The Mother used to be a housewife, and the monies were savings kept by the Mother based on what the Father had given her.He said the Mother gave him monies for his family’s use upon emigration to Canada.  He also said that he would use the monies in the accounts for different types of investment, and he had even obtained an overdraft for his own investment.  His wife worked in the bank and wouldgive him some advices on how to use the monies in the accounts from timeto time.  Hence, as at the date of the Mother’s death, there were savings in different foreign currencies, time deposits, as well as a debit in the current account.

32.  It does not appear to be the case that HSBC Joint Accounts were opened solely for the sake of convenience in case the Mother could not deal with the monies personally due to physical or mental disability.  If that was the case, the Mother could have opened an account in her sole name and added Sien San as one of the authorized signatories (as what she did in relation to the Citibank Accounts).  In addition, there would be no apparent reason why she would mix her own savings with those of Sien Sanin the same accounts.  At the time when the accounts were opened, there is no evidence that the Mother was suffering from any material deterioration in physical or mental health.  As a matter of fact, the monies in the HSBC Accounts had been used for various investment purposes as Sien San saw fit.  It appears that the Mother allowed Sien San to treat all monies in the accounts as his own monies. Furthermore, although Sien San had put on hold the plan to emigrate to Canada subsequently due to health problems suffered by his parents, it was true that he had a concrete plan to emigrate toCanada at the time when the accounts were opened.  At that time, although Sien San’s wife was working, Sien San did not appear to have any steady and substantial incomes, and Sien San’s son was only a very small boy.  In the circumstances, it was inherently likely that the Mother would be prepared to give a substantial part of her savings to his son to enable him to start a new life in Canada sooner or later.  Lastly, although I have not seen the account opening forms, it is clear that the bank mandate provided that the balance in the accounts shall vest in the survivor.  In the normal course of event, officers of the bank should have explained the effect of the bank mandate to the Mother when the accounts were opened.

33.  For the above reasons, I am unable to accept Mo Yee’s case that the common intention was that the HSBC Joint Accounts were opened for the Mother’s convenience only.  Her case is largely based on speculations not substantiated by evidence, and her subject belief that the Mother couldnot be so generous to Sien San.  I accept that, on a balance of probabilities,the common intention was that as stated by Sien San; including that the balance in the accounts should go to the survivor in case any one of them passed away in accordance with the bank mandate.

34.  Although I have heard submissions on the presumption of resulting trust and the presumption of advancement, I do not find it necessary or helpful to rely on such presumptions in this case.  In these circumstances, it is not easy to decide which presumption should apply.  In Suen Shu Tai v Tam Fung Tai [2014] 4 HKLRD 436, at §10.16, Cheung JA left open the question of whether the presumption of advancement applies to a mother and her independent adult child.  On the one hand, it may be argued that the presumption of advancement may still be justified by the parent’s desire, if not obligation, to support the child even after he has grown up.  On the other hand, it may be argued that it is common for an adult child to hold assets on trust for the parent to facilitate efficient management.  It appears to me that these presumptions tend to oversimplify what happens in real life and can be quite artificial: very often, the financial affairs between the parent and the child were arranged for mixed and different reasons.  I am not surprised that, nowadays, these presumptions are used as a last resort only; and can be easily displaced (even if applicable).

35.  For these reasons, I hold that Sien San is entitled to the balance of the HSBC Joint Accounts.  For the sake of completeness, if I am wrong, there is no dispute that Sien San should return HK$9,445.50 and HK$454,433.33, being 50% of the balance in the two HSBC Joint Accounts respectively as at 6 June 1999, to the estate of the Mother.  Mr Yu confirmed that, as it is unclear how much each of the Mother and Sien San had contributed to the HSBC Joint Accounts, Mo Yee is prepared to accept that only 50% of the balance should be returned in such event.

Removal of Mo Yee as executrix

36.  Section 33(3) of the Probate and Administration Ordinance (Cap 10) (“the PAO”) 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.”

37.  In Wong Tat Lun Eddie v Wong Chi Ho Jimmy HCMP 2391/2013(21 October 2014, unreported), DHCJ B Chu (as she then was) held in §83, that:

“ … To be so satisfied, the court has to consider all the circumstances of the case and each case will depend on its own facts. Matters the court may have regard include size of the estate, nature of the assets, background, education, training and experience of the remaining and substituted personal representatives.”

She said further in §84:

“The testator’s choice of executors may be a relevant consideration. Friction or hostility between the executor and the beneficiaries,although per se may not be a good reason for the removal, such hostility if grounded in the manner in which the estate is being administered or not being administered is a matter that ought not to be disregarded.”

38.  She observed in §85 that the court must always be very cautious and sparing in the exercise of the power to remove an executor or administrator, and that there has been reluctance to make such an order in the case of an incumbent executor or administrator who wishes to carry on, without allowing that incumbent an opportunity to repair or remedy any defects and progress promptly with due administration.

39.  As reaffirmed by W Chan J in Tsang Wing Kwai v Tsang WingFai [2018] HKCFI 1060, §27, the Court’s discretion under section 33(3) of the PAO is wide; the exercise of the discretion is not necessarily premised on a finding of misconduct on the part of the personal representatives.  One example given by Poon J (as he then was) in Chan Sau Heung v Kwan Siu Fai HCMP 2620/2012 (17 April 2013, unreported), §15, is “the breakdown of relations between the personal representatives (such as clash of personalities, or the lack of confidence in the personal representative by the beneficiaries) leads to the administration coming to a standstill”.  However, in such case, the court will ordinarily remove the personal representatives and appoint new ones to enable the administration to be completed.

40.  I shall deal with the two specific matters which Sien San relies on to support his application to remove Mo Yee as the executrix first.

41.  First, Sien San claims that Mo Yee had mismanaged the Citibank Accounts.  Although the Citibank Accounts were in the sole nameof the Mother, Mo Yee had been added as one of the authorized signatories at one stage.  This must be why she was able to withdraw monies from the accounts after the Mother’s death.  Moo Yee has agreed to pay HK$35,784.06 which she had withdrawn from the accounts back to the estate of the Mother.  The dispute concerns a total sum of HK$220,000 withdrawn by Mo Yee from the accounts in about July 1999 after the Mother’s death.

42.  It is not in dispute that Sien San had incurred HK$220,000 as funeral expenses for the Mother.  There is also no dispute that Mr Lo, the husband of Mo Yee, drew a cheque of HK$220,000 dated 27 July 1999 in favour of Sien San.  The cheque was to reimburse Sien San for the funeral expenses incurred.  Sien San claimed that he did not know that the sum of HK$220,000 came from the Citibank Accounts; and he took the view that this sum should only be deducted from the Mother’s estate in due course. In contrast, Mo Yee said that Sien San asked him to withdraw HK$220,000 from the Mother’s account at Citibank.

43.  I note that Mo Yee stated in her affirmations that the money was withdrawn in the presence of San Sien.  She explained that this was a mistake due to miscommunications with her lawyers.  However, as her present version only emerged in her oral evidence, it had not been put to Sien San.  In the circumstances, I find it difficult to resolve the factual dispute on this point.  Having said that, I do not find it necessary to do so. For the present purpose, let us assume that San Sien did not know that the sum of HK$220,000 came from the Citibank Accounts.

44.  First, as stated in Williams, Mortimer and Sunnucks, Executors,Administrators and Probate (21^st ed, 2018), §6-02, pp 88 – 89:

“ Where there are several executors, all are considered in law as an individual person and, in general, the acts of any one of them, done for the purposes of administration, are deemed to be the acts of all the them.”

The authors state at §50-69, p 919 that:

“ As has been seen, co-executors, however, numerous, are regarded in law as an individual person …. Thus, as a general rule, the act of one of the joint representatives is regarded as the act of all and is binding ….”

In Hong Kong, section 54(3) of the PAO provides that:

“ Save where subsection (1) or (2) applies, where there are severalpersonal representatives the powers of all may, in the absence ofany direction to the contrary in the will or grant of administration,be exercised by any one of them.”

In this case, as mentioned, in the Mother’s will, the parties were appointed “jointly and severally” as executors.  Section 65(1) of the PAO provides that:

“ Subject to the provisions of section 54 every contract entered into by a personal representative in the due administration of anestate shall be binding on and be enforceable against and by anyother personal representative for the time being of the deceased,and may be carried into effect or be varied or rescinded by anyother such personal representative as if it had been entered into by himself.”

45.  Second, again, as stated in Williams, Mortimer and Sunnucks,Executors, Administrators and Probate (21^sted, 2018), §35-02 at pp 556–557:

“ The interest of an executor in the estate of the deceased is usually derived from the will and so vests in the executor from the moment of the testator’s death …. In essence, it is not the grant of probate that caused the estate to vest in an executor. Instead, the grant of probate is merely the means of proving the executor’s title to the satisfaction of the court.”

The authors state earlier in §5-05, p 56:

“ Where an executor is appointed by a will, he derives title from the will, and the property of the deceased vests in him from the moment of the testator’s death, so that probate is said to have relation back to the time of the testator’s death ….”

And in §5.06, p 57:

“ Because an executor’s title is derived from the will he may, before he proves the will, do almost all the acts which are incident to his office, except some which relate to litigation. He may seize and take into his hands any of the testator’s effects,; he may pay, or take releases of debts owing from the estate; he may receive or release debts which are owing to it, and distrain for rent due to the testator.”

46.  Applying these principles to this case, I take the view that Mo Yee had the legal power as one of the executors to use the monies in the Citibank Accounts to reimburse Sien San for funeral expenses incurredfor the Mother.  Mr Sit submits that, even if Mo Yee was not acting in badfaith or wrongfully when she withdrew monies from the Citibank Accounts, she had failed to act reasonably in response to Sien San’s proper request for explanations.

47.  By a letter dated 31 August 2016, Mo Yee, through her solicitors, stated that they had applied to Citibank to obtain the bank statements.  However, Sien Sen’s solicitors confirmed on 19 September 2016 that it was no longer necessary to retrieve the bank statements because Mo Yee had confirmed on 29 March 2016 that she had withdrawn HK$248,280.06 on 27 July 1999.  I accept that Mo Yee could have agreed to provide the bank statements earlier.  However, I do not think this was a serious matter supporting that she should be removed as executrix.

48.  I turn to the second specific complaint made by Sien Yan.  He claimed that Mo Yee had failed to handle the tenancy regarding the Car Park properly.

49.  Mo Yee said that the Car Park was left vacant after the Father’s death.  In order to get monies to pay management fees, Government rents,and other outgoings, she asked the Incorporated Owners of the building to assist her to rent out the Car Park.  Sien San had accepted that the total rental received by Mo Yee was HK$83,200; and that, in fact, after taking into account various expenditures, Mo Yee is entitled to receive a net sum of HK$27,259 from the estate of the Father.

50.  Sien San’s complaint is that the tenancy agreement regarding the Car Park was made orally without any written evidence and that the rentals were paid in cash.  In law, as explained above, Mo Yee had the power to arrange the tenancy in the way she did.  There is no suggestion that such arrangement has caused any loss to the estate of the Father.

51.  Sien San also complained that Mo Yee had failed to provide proper and timely accounts in respect of the rentals.  However, Mo Yee’s solicitors had on 2 September 2009 sent to Sien San’s solicitors an account of the income and expenditure in relation to the Car Park.  The account enclosed to the letter could not be found by either party.  Having said that, in the reply letter dated 9 February 2009 from Sien San’s solicitors, there was no suggestion that they had not received the account, and they had notraised any query about the account at all.  All in all, I am not convinced that Sien San’s complaint against Mo Yee in this respect can be substantiated, or constitutes a sufficient reason to remove her as executrix.

52.  Sien San also relied on how Mo Yee had handled the dividends distributed by the Taiwan Company to support his application to remove Mo Yee as executrix.  In particular, he complained that Mo Yee only disclosed the LCH Account on 8 May 2018.  Once again, while I accept that she could and should have disclosed the account earlier, I do not thinkit was serious enough to justify removing her as executrix.  It is necessary to bear in mind that her case, which I have accepted, is that the dividends belonged to her beneficially.

53.  It is important to look at the overall picture.  I have considered all the correspondence exchanged between the parties and their solicitors concerning the administration of the Parents’ estates.  Although,as I said, Mo Yee could and should have perhaps responded to some of therequests for information made by Sien San more swiftly and patiently, andwith more details and documentary support, she had made serious attempts to deal with his requests even though apparently she thought some of the requests were unreasonable.  On the other hand, I note that, sometimes, Sien San did not respond to the correspondence of Mo Yee timeously because he was not in Hong Kong or otherwise.  I am afraid that, the rather unsatisfactory state of affairs (ie the administration of the Parents’ estates has not yet been completed after so many years) was largely contributed by the breakdown of relationship between the parties.

54.  In considering whether Mo Yee should be removed as executrix, I need to consider the consequence if she is so removed.  There is no suggestion by Sien San that another person should be appointed to take her place.  Hence, Sien San would remain to be the sole executor.  It is not what the parents directed in their Wills.  Further, Sien San is not residing in Hong Kong, though he said he may stay in Hong Kong for a longer period now as he has retired and his son has grown up.  I also note Mo Yee’s complaint that Sien San had failed to pay the Government rents, management fees, etc, regarding the property owned by the Father, which cast a serious doubt on his suitability to act as executor.

55.  It is not for me to decide, as between the two of them, who was, or would be, a better executor.  The reality is, if Sien San becomes the only executor, it is likely to increase the mistrust and hostility between the parties.  More importantly, I fail to see how it would enhance the due administration of the estates of the Parents.  It is essential to bear in mind that Mo Yee is one of the beneficiaries of the estates of the Parents.  Thereis no longer any asset belonging to the Parents which needs to be managed in the meantime.  The main asset, being a property owned by the Father, had already been sold, and the sale proceeds of HK$5,433,003.01 are nowin court.  It seems that the only reason why there is still no final distributionof the estates of the parents is because of, firstly, the disputes which are thesubject matter of these legal proceedings, and secondly, some disagreements concerning some alleged expenses incurred for the estates of the Parents.  The disputes which are the subject matter of these legal proceedings will be resolved upon the conclusion of these proceedings.  As to the remaining disagreements concerning various expenses, they cannot be resolved, or cannot be resolved more easily, even if Mo Yee is removed as executrix leaving San Sien as the sole executor.  What is required is for the parties (with the assistance of their lawyers) to put aside the hostility against each other, and to resolve their remaining disagreements in a rational, reasonable and objective manner.  This is, for all practical purposes, the only way to ensure that the administration of the estates of the Parents can be completed as soon as practicable.

56.  All in all, I am not satisfied that the due and proper administration of the estate of the Parents and the interests of the persons beneficially entitled thereto requires or justifies the removal of Mo Yee as executrix.

Conclusion and order

57.  For the above reasons, I shall dismiss both the claims made by Sien San and the counterclaims made by Mo Yee save and except that I shall make the following orders:

 (a)  A declaration that Mo Yee received the sum of HK$1,172,158,being dividends distributed by the Taiwan Company, as the beneficial owner thereof;

 (b)  A declaration that Sien San is the beneficial owner of all the balance in the HSBC Joint Accounts upon the Mother’s death;

 (c)  A declaration that Mo Yee is liable to pay back a sum of HK$35,784.06 (which she had withdrawn from the Citibank Accounts) to the estate of the Mother;

 (d)  A declaration that Mo Yee is entitled to receive a sum of HK$27,259 (in relation to the management of the Car Park andthe property owned by the Father) from the estate of the Father.

58.  The parties agreed that I need not make any order directing any party to make any actual payment back to the estates of the Parents.  The parties may give effect to the declarations that I have made by making appropriate adjustments in the accounts for final distribution of the estates of the Parents.  In any event, I give parties liberty to apply.

59.  As to costs, in substance, by and large, Sien San has failed in his claims whereas Mo Yee has also failed in her counterclaim.  Looking at the matter as a whole, in exercising the court’s unfettered discretion on costs, I take the view that this is a case where each party should bear its own costs.  Accordingly, I shall make a costs order nisi that each party shall bear its own costs of these legal proceedings, and that Sien San’s own costs be taxed in accordance with the Legal Aid Regulations.  In case any party intends to vary the costs order nisi, a written application supported by a skeleton argument not longer than 5 pages should be filed within 14 days; and the other party may file a skeleton argument not longerthan 5 pages in reply within 14 days thereafter.  I shall then dispose of the application on paper.