CHANG WING KA JOHN v. CHANG WING DEE AND ANOTHER

HCMP 1790/2016 and HCMP 1791/2016

(Consolidated)

[2025] HKCFI 6479

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1790 OF 2016

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1791 OF 2016

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(Consolidated by the Order of the Honourable Mr. Justice Chow
dated 31 August 2016)

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DECISION

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A.  BACKGROUND

1.  These actions concern the estates of the late Tsui Yuen Ying (“Mother”) and of the late Chang Yin Ching (“Father”) respectively (collectively, “the Estates”). 

2.  The Estates include, among other things:

(1)  A flat in Skyscraper in Tin Hau Temple Road (“the Skyscraper Flat”) held by Father;

(2)  140 shares in Majestic Fashion Knits Limited (“Majestic Fashion Ltd”) held by Father on trust for John and WD;

(3)  8 units in Toronto, being Units 501, 705, 706, 707, 801, 803, 905 and 907 at 188 Spadina Ave (“the Spadina Units”);

(4)  Unit 101 at Robson Street, Vancouver (“Robson Unit 101”);

(5)  Certain shares in various publicly listed companies; and

(6)  Jewellery in a safety deposit box.

3.  Father and Mother had four children, namely, John, Esther, Yvonne (who predeceased her parents) and Wing Dee.

4.  Father died on 3 February 1999, and Mother died shortly thereafter on 8 September 1999.

5.  After 10 years of litigation in both Hong Kong and Canada, John, Wing Dee and Esther entered into a Mediation Agreement dated 6 March 2009 (“the Settlement Agreement”), which subsequently became the subject of a Tomlin Order made by Lam J (as Lam PJ then was) on 12 January 2010 in HCA 48/2001. The terms of the Settlement Agreement are set out in Annex 1 of this Decision.

6.  On 14 July 2016, John commenced these proceedings, in which he, among other things, sought to remove Wing Dee as the administrator of the Estates.  On the other hand, Wing Dee and Esther counterclaimed against John on the grounds that that he has failed to render proper accounts of the properties in Canada and that he had been holding the same as if they were his own. They asked for, among others, an order that John be removed as trustee of the properties of Mother under a declaration of trust dated 4 March 1999 and that Wing Dee be appointed in his stead.

7.  At first instance, Deputy High Court Judge To made the following orders on 11 January 2021:

(1)  Dismissal of John’s actions;

(2)  John be removed as the trustee of the properties of Mother under the declaration of trust dated 4 March 1999 and Wing Dee be appointed in his place;

(3)  Wing Dee do open a separate trust account and deposit John’s entitlements into that account, pending distribution of the Estates;

(4)  Professional accountant and valuer be appointed for the purpose of finalising the accounts of the Estates and there be due distribution of the Estates based on the final account.

(“the 2021 CFI Orders”)

8.  DHCJ To’s Judgment dated 11 January 2021 (“the CFI Judgment”) was partially reversed on appeal (“the Appeal Judgment”). For the present purpose, I need not go into the details of the part of the orders which was reversed.

9.  On 5 October 2023, John made an application to enforce the 2021 CFI Orders. 

10.  The said application came before this Court on 21 May 2024.  By consent, the following orders were made (“the Consent Order”) upon Wing Dee’s undertakings to (i) pay into Court the entire balance of the HSBC account (in which he held John’s entitlements in the Estates) within 14 days of the Consent Order; and (ii) keep John’s share of securities, shares and jewellery in the Estates in safe custody:

“[Wing Dee] do comply with paragraph 4 of [the 2021 CFI Orders] by finalising the accounts of the Estates within 60 days from the date of this Order, and by making due distribution of [John]’s entitlements under the Estates within 90 days from the date of this Order. Time of this Order shall run during Summer Vacation.”

11.  On 27 May 2024, HK$132,891,345.73 was paid into Court by Wing Dee (“the Payment In”). 

12.  On 22 July 2024, Wing Dee took out a summons for extension of time to comply with the Consent Order.

13.  On 28 August 2024, John took out a summons for an order of payment out of a sum of HK$33 million.

14.  At the call-over hearing of the 2 aforesaid applications held on 3 September 2024, the Court, among other things, ordered by consent of the parties that a sum of HK$13.7 million be paid out forthwith to John, on the basis that, according to Wing Dee’s submissions, the said amount was the “best case” of John.

15.  On 30 September 2024, Wing Dee provided John with the following reports:

(1)  A report of C. S. Wong & Co (“the CS Wong Report”) on “settlement distribution”;

(2)  A report of Kroll Canada Limited dated 12 September 2024 on rent analysis of the Spadina Units and Robson Unit 101 (“the Kroll Report”).

16.  On 17 February 2025, John took out a summons (“the Distribution Summons”) and asked for the following orders:

“1. An Order that the 1^st Respondent do comply with paragraph 4 of the Order made by DHCJ To dated 11 January 2021 (as extended by the Orders of DHCJ Au-Yeung dated 21 May 2024 and 3 September 2024) by providing a just and true account on oath within 14 days of the Order made herein in respect of the items in Schedule 1 hereto (being assets forming part of the Estates of Tsui Yuen Ying and Chang Yin Ching (the ‘Estates’) and/or for which the 1^st Respondent is liable to account), hereinbelow referred to as the ‘Unaccounted Assets”.

2. An Order that the 1^st Respondent do make due distribution of the Applicant’s entitlement(s) in respect of the Unaccounted Assets within 14 days thereafter. 

3. A declaration that the deductions purportedly made (or to be made) by the 1^st Respondent as set out in Schedule 2 hereto (as referred to in Report of C.S. Wong & Co CPA dated 30 September 2024 comprising and/or represented to be the purported finalised accounts of the Estates by the 1^st Respondent) are improper and/or unjustified. 

4. An Order that there be an inquiry (i) into the Unaccounted Assets; and (ii) to determine the matters referred to in paragraph 3 hereinabove. 

5. An Order for payment out of HK$119,191,345.73 out of the HK$119,191,345.73 remaining into Court (out of the HK$132,891,345.73 paid into Court by the 1^st Respondent pursuant to the Order of DHCJ Au-Yeung dated 21 May 2024) to the Applicant. 

6. An Order that the 1^st Respondent do transfer to the Applicant (or his nominee) the shares held by 1^st Respondent in his account held with The Hongkong and Shanghai Bank (account number: xxx-xxxxxx-xxx) as set out in the first letter from Messrs Yung, Yu, Yuen & Co., to Messrs Norton Rose Fulbright Hong Kong dated 26 February 2024 (the ‘YYY February 2024 Letter’). 

7. An Order for the 1^st Respondent do distribute and/or transfer to the Applicant (or his nominee) the latter’s share of jewellery retained and/or held by the 1^st Respondent as set out in the YYY February 2024 Letter.”

17.  On 22 August 2025, Wing Dee produced an updated account by Ms Susan Wong of WWong Consultancy Limited which was said to be the final Estate account.

18.  By consensus reached at the substantive hearing, this Court would in this Decision only deal with paragraphs 3, 4(ii), 5, 6 and 7 of the Distribution Summons.  The rest of the said summons would be dealt with later upon filing of further evidence by the parties.

B.  THE CS WONG REPORT

19.  As far as the Distribution Summons[1] is concerned, the disputes between the parties relate mainly to the content of the CS Wong Report, which concluded that John owed Wing Dee and Esther a sum of HK$140,226,564.17.  On that basis, Wing Dee alleged that none of the monies remaining in Court can be released to John (and instead the latter has to pay an additional HK$21,035,220 over to his siblings).

20.  The said total sum of HK$140,226,564.17 (“the Deductions”) comprises 5 parts, namely:

(1)	Value of 5 Spadina Units	HK$45,000,000.00
(2)	50% of the value (plus tax) of 4 Robson Units	HK$18,000,000.00
(3)	Residual rental income unaccounted for	HK$48,894,060.00
(4)	Half share of the Skyscraper Flat and carpark	HK$19,650,986.70
(5)	Expenses reimbursable	HK$8,681,516.47
		________________
		HK$140,226,563.17

C.  THE RESPECTIVE STANCE OF THE PARTIES

21.  It is Mr Clifford Smith SC (leading Ms Natalie So)’s argument that the Deductions are clearly not justified, and therefore should be dismissed outright, and that, given there is no dispute that John is, but for the Deductions, entitled to the amount paid into court[2], there should be an order for payment out of the remaining amount of the Payment In.  It was also submitted that John’s entitlement of shares and jewellery held by Wing Dee should be distributed to him immediately.

22.  On the other hand, Mr C Y Li SC (leading Mr Avery Chan) submitted on behalf of Wing Dee that since there are disputed issues in relation to the Deductions, the Court should not decide on the Distribution Summons summarily, but rather give directions for trial.

D.  DISCUSSION

D1.  The account and inquiry procedure

23.  John has cited, among other things, “Order 43 rules 2 to 4 of the RHC” at the marginal note of the Distribution Summons.   Because of that, it was submitted on behalf of Wing Dee that the Order 43 procedure is a summary procedure and is not appropriate where the parties are in substantial dispute of fact (and for that matter also law) which is fundamental to the manner by which the account is to be taken, and in such circumstances, those issues ought to be resolved first.

24.  Heavy reliance has been placed by Mr Li SC and Mr Chan on the case of Man On Sum v Man Ping Hei [2016] 5 HKLRD 150, in which Chow J (as Chow JA then was) has summarised the relevant principles as follows:

“10.     The following principles for deciding whether to make a summary order for account under Order 43 of the Rules of the High Court are well established.

11. First, ‘Order 43 is not appropriate where the parties are engaged in substantial disputes of fact which are fundamental to the manner in which any proposed account is to be taken.  Such disputes of fact first need to be resolved by trial.  The person conducting the account or inquiry would need guidance on how to resolve such fundamental factual disputes if the account or inquiry is to proceed smoothly.  Such guidance could effectively only come after a trial judge has fully heard the parties and decided their fundamental disputes, not before’: see Kids World v XL Machine Ltd, HCA 125/2002 (18 September 2003), at paragraph 3 per Reyes J.

12. Second, Order 43 is not the appropriate avenue for seeking answers to interrogatories, or specific discovery, or clarification of accounts already rendered: see Kids World, ante, at paragraph 9 per Reyes J.  As stated by Litton JA (as he then was) in Ho Lee Man v Wong Wai Kai [1993] 1 HKC 183 at 191F, the summary process under Order 43, rule 1 is not designed as an instrument for specific discovery.

13. Third, ‘Order 43 provides for the taking of an account which is a process of inquiry… Order 43 does not simply involve both parties setting out what each party proposes to be the proper account between themselves.  The taking of an account essentially involves the Court (whether by a master or judge) vetting the accounts (including supporting oral and written evidence) produced by both parties with a view to arriving at an outstanding figure due from one party to another’: see Kids World, ante, at paragraph 11 per Reyes J.

14. Fourth, if there are some preliminary questions to be tried, it would be inappropriate to make a summary order for account: see Lei Chun Kin v Yip Teresita Pumares, DCCJ 892/2006 (11 April 2007), at paragraph 47 per H H Judge Marlene Ng.  For this purpose, a ‘preliminary question’ means a question which (i) might be relevant to the entitlement of the plaintiff concerned to an account as of right, or (2) concerns whether there might be any circumstances in which it would be appropriate for the court not to direct an account at that stage, or (3) relates to issues concerning the extent of the matters for which it might be appropriate for the defendant to account: see Aforge Finance SAS v HSBC Institutional Trust Services Ltd [2009] IEHC 565, at paragraph 4.3 per Clarke J.

15. Fifth, where the defendant has already provided an account and the issue is the adequacy of the account provided, such issue should, generally speaking, be regarded as a ‘preliminary question’ to be tried and thus it would not be appropriate to make a summary order for account: see Holborow v Macdonald Rudder (a firm) [2001] WASCA 91; Aaronisle Pty Ltd v Thorpe & Anor [2005] WASC 87; and Tandor Pty Ltd v Australia Liquor Marketers (WA) Pty Ltd [2008] WASC 244.”

25.  In addition, this Court has been referred to, among others, the cases of Crane World Asia Pte Limited v Hontrade Engineering Limited (HCA 109/2014, unreported, 4 September 2014) and Kids World Limited v XL Machine Limited & Others (HCA 125/2002, unreported, 18 September 2003), in which it has also been held that an order of account is inappropriate if there are preliminary issues which have to be decided.

26.  On the basis of the above, Mr Li SC has urged this Court not to resolve the factual disputes between the parties summarily at this stage, in light of the many preliminary issues which Wing Dee has raised. Rather, it was said that directions should be given so that those issues can be adjudicated on in the first place.

27.  With respect, I do not think it is right to say that, once Wing Dee has raised certain issues which have to be decided, the Court would be bound to give directions for the matters to be decided at a trial.  I also refuse to accept that the Court must be wrong in principle if it decides to rule on the disputes summarily.  In my view, the situation here is akin to a summary judgment application.  If the alleged dispute raised by Wing Dee is not arguable at all, I cannot see why the Court is bound to prolong the procedure by ordering a trial.  This is contrary to the underlying objectives of the Rules of the High Court.  On the other hand, if the matter is not one which can be resolved on paper summarily as such, then this Court has no choice but to give directions for trial, even though that means this saga which has already lasted for more than two decades has to continue.

28.  The above approach is not inconsistent with the principles which are referred to by a number of authorities cited by Wing Dee’s legal team, in which the court held that there were matters which could not be determined summarily.

29.  Another matter which should be borne in mind is that, as pointed out by Mr Smith SC, all the cases cited by Wing Dee on Order 43 of the Rules of the High Court are cases in which the court had not already made an order for account.  However, we are not in that situation at all.  As explained above, an order for account had already been given herein.

30.  In short, the manner by which the disputes between the parties are to be resolved must be depending on the nature of the disputes and the particular circumstances of the case.

D2.  The Deductions

31.  I will now turn to consider each item of the Deductions one by one.

D2.1  The 5 Spadina Units

32.  The first head of the Deductions from John’s share of the Estates is the sum of HK$45 million in relation to Spadina Units 501, 705, 706, 803 and 907.

33.  As a matter of background, the aforesaid Spadina Units are all part of the Estates.  Pursuant to Clause 7 of the Settlement Agreement, the parties agreed that, out of the above Spadina Units, Esther will take up Spadina Units 803, 705 and 706, whereas Wing Dee will take up Spadina Units 501 and 907. 

34.  In Part 1 of the CS Wong Report which is said to support the Deductions, it is stated that:

“Part 1:- Canadian Properties

a) Condo units 501, 705, 706, 707, 801, 803, 905, and 907, located at 188 Spadina Ave, Toronto, ON (collectively referred to as the ‘Toronto Subject Units’),

b) Condo units 101, 302, 303, 701 and 801 located at 1845 Robson St, Vancouver, BC. (collectively referred to as the ‘Vancouver Subject Units’).

All of the Condos referred to as ‘Toronto Subject Units’, ‘Vancouver Subject Units’ have been appraised by Kroll Canada Limited, Real Estate Advisory Group, in accordance with the Consulting and Real Property Appraisal Standards requirements set forth in the Canadian Uniform Standards of Professional Appraisal Practices (‘CUSPAP’) of the Appraisal Institute of Canada (‘AIC’).  The estimated fair market value appraised in the report (‘Kroll Report’) compiled by Kroll Canada Limited have been adopted and applied to the settlement distribution for Part 1

‘Toronto Subject Units’

Extracted from the Kroll Report page 2, is a table summarizing the estimated Market Value of the Toronto Condos (attached herewith as Appendix 1).  Adopting the market value presented, the average fair market value of each Condo 501, 705, 706, 803 & 907 (belonging to Wing Dee and [Esther]) is approx. CAD 1,077,410.  To each Condo, a disposition capital gains tax of CAD 400,000 have been added – this disposition tax is applicable to property deemed disposed at market value on the date of death of the deceased.  This figure has been estimated from a previous similar transaction for a property disposed at time of death (Appendix 2).  Therefore, each Condo have been estimated to have a fair market value of CAD1,500,000 (CAD 1,077,410 + CAD 400,000 = approx. CAD 1.5 mil)

Part 1.1 Exchange Rate CAD1 = HKD6	CAD	Due to Estate HK$	Due to Esther & Wing Dee HK$
Toronto 8 units plus estimate tax included CAD 1.5M each	12,000,000	72,000,000
5 units belong to Esther and Wing Dee 1.5M x 5 Condo: 501 705 706 803 & 907	7,500,000		45,000,000

Pursuant to clause (7) of the [Settlement] Agreement, the Condos referred to (a) and (b) above shall be distributed in the following manner and that all costs of transfer, tax including capital gains tax, shall be shared by Wing Dee, Esther and John:-

John: 801, 707, 905 of Toronto Subject Units

Esther: 803, 705, 706 of the Toronto Subject Units

Wing Dee: 501, 907 of Toronto Subject Unit”

35.  By the above alone, it is simply impossible to understand Wing Dee’s justification to deduct HK$45 million from John’s entitlement in the Estates.

36.  In Wing Dee’s 4^th Affirmation, he explained the HK$45 million deduction as follows:

“(1) First, despite [John]’s removal as trustee for the Canadian Properties by the order of DHCJ To on 11.1.2020, he has continued to hold on to the Canadian Properties without attempting to transfer the relevant units to me and Esther.  Indeed, even up to the present [John] has not proposed or expressed any willingness to transfer the units to me and Esther in [John’s 7^th Affidavit]. [John]’s continued possession of the Canadian Properties (and his reluctance to transfer the same) serves as a clear indication of his intention to keep those units as his own properties.

(2) Second, since [John] resides in Canada, I am unable to compel [John] to transfer the relevant units to me and Esther by way of bringing proceedings in Hong Kong.  I have also been advised by Canadian lawyers that I cannot enforce the judgment of DHCJ To in Canada to compel [John] to carry out the transfer.

(3) Third, [John] did express interest in taking up my share of the Canadian Properties. In particular:

(a) On 29.8.2024, [John] had by an email entitled ‘Robson St 4 Units’ stated that ‘If you are in favour of selling the 50 percent share to me, would you ask your legal advisor YYY to pass this request to my legal advisor NRF?’

(b) In reply, on 2.9.2024 I told [John] that since the units were in Vancouver, [John] should ask his lawyer in Vancouver to send the properties transfer document to my Canadian lawyer.

[…]”

37.  I am of the view that these grounds are clearly unsustainable and are not arguable at all:

(1)  First and foremost, as accepted by Mr Li SC and Mr Chan in their written submissions when they highlight certain matters “which are germane to the discussion on the issues raised in [John’s Distribution Summons]”:

“22. […]

(8) The [Settlement] Agreement has never been rescinded by the parties. The parties’ positions are that they have to perform the [Settlement] Agreement.  In fact, the CA observed that the parties were indeed asking for the performance of the [Settlement] Agreement by the actions taken: CA Judgment §16.1 […]”

That being the case, there is no room for Wing Dee to allege that John had no intention to abide by the consensus reached in the Settlement Agreement but rather had intention to keep the aforesaid 5 Spadina Units as his own properties.

(2)  On the above basis, it is totally unconvincing for Wing Dee to cite the enforceability of the Settlement Agreement as a reason to support his own case.

(3)  It is evident that the alleged “delay” in the transfer of the 5 Spadina Units by John to Esther and Wing Dee was at least largely caused by the legal advice which Wing Dee obtained from his Canadian legal advisors by virtue of an email dated 20 October 2023, which advised the parties “to wait until 20 February 2024 before taking any steps with the legal titles in order to benefit from the 10-year limitation period in relation to tax payments demanded by the [Canadian Revenue Authority]”.

(4)  Wing Dee’s counsel argued that even if the transfer of the said properties had been deferred by reason of the afore-mentioned legal advice, nothing had been done by John to effect the transfers after 20 February 2024.  I do not think that argument would assist Wing Dee, because the undisputed fact is that the parties are still minded to act in accordance with the Settlement Agreement.

(5)  Wing Dee attempted to rely on John’s email dated 29 August 2024 in order to prove that John was indeed minded to purchase Wing Dee’s Spadina Units.  However, as Mr Li SC conceded in Court, this argument is totally misconceived, because the said email was not concerned with the Spadina Units at all.

38.  In order to ease the concerns on the part of Wing Dee and Esther, Mr Smith SC told this Court that John is willing to give an undertaking to the Court to effect the transfers of the 5 Spadina Units. The wordings of the undertaking have been set out in paragraph 1 of Annex 1 attached to John’s skeleton submissions.  Even if such an undertaking was not offered, I would have come to the same conclusion that the HK$45,000,000 deduction is totally unjustified which must be reversed.  Having said that, I am of the view that, given the parties’ long litigation history, there is no harm for the Court to accept such an undertaking, which I hereby do.

39.  As far as the disposition tax is concerned, it has been provided under Clause 7(g) of the Settlement Agreement that “All costs of transfer & tax will be shared by the parties”.  There is thus no reason why it should be treated as if John is solely responsible for the same.  It should also be noted that there is no evidence that part of the entitlement of Wing Dee and Esther has been withheld for the purpose of such disposition tax.

40.  To conclude, the alleged deduction of HK$45,000,000 from John’s entitlement in the Estates is totally unjustified. There is so lack of merits in this part of Wing Dee’s case that, in my view, it will be a waste of time and costs for the Court to direct this issue to be tried.

D2.2  The 4 Robson Units

41.  The subject matters here are the Robson Units 302, 303, 701 and 801 which were originally held by Father, Mother, John and Wing Dee as joint tenants.  John and Wing Dee have become the only joint tenants of these properties upon the demise of both Father and Mother.

42.  As far as this head of Deductions is concerned, the relevant part of the Settlement Agreement is Clause 7(d) thereof, under which John will take up the shares of Wing Dee of Robson Units 302, 303, 701 and 801.  It is also provided that Wing Dee will be paid by John individually.

43.  The relevant part of the CS Wong Report reads:

“ ‘Vancouver Subject Units’

The Condos referred to in (b), Condos 302, 303, 701 & 801 of the Vancouver Subject Units, its was agreed that John will take up the shares of Wing Dee as stated in the [Settlement] Agreement.  John will pay Wing Dee for his share of the 50% ownership of the Condos 302, 303, 701, & 801 in Vancouver.  The average fair market value of each condo 302, 303, 701, & 801 is approx CAD 1,108,000.  To each Condo, a disposition capital gains tax of CAD 400,000 have been added – this disposition tax is applicable to property deemed disposed at market value on the date of death of the deceased.  This figure has been estimated from a previous similar transaction for a property disposed at time of death (Appendix 2).  Therefore, each Condo have been estimated to have a fair market value of CAD1,500,000 (CAD 1,108,000 + CAD 400,000 = approx. CAD 1.5 mil)

Part 1.2 Exchange Rate CAD1 = HKD6	CAD	Due to Estate HK$	Due to Esther & Wing Dee HK$
Vancouver 4 Units plus estimate tax included CAD 1.5M each in the joint names of John and Wing Dee after parents passed away (CAD 1.5M x 4 Condo) * 50% Condo 302,303,701, & 801”	3,000,000		18,000,000

44.  In his 4^th Affirmation, Wing Dee explained that:

“10. One of [John]’s major complaints appears to be that the [CS Wong Report] and my calculation has mixed up the assets of the Estates and the assets jointly owned by [John] and I (such as Skyscraper and the 4 units of Robson Street being Units 302, 303, 701 and 801).

11. There is no substance in [John]’s complaint.  He seems to be oblivious of the fact that the [Settlement] Agreement was made precisely to deal with all assets of the family, including those already jointly owned by [John] and I, in one go. Hence, in finalizing the accounts, it is imperative to take into account all the assets mentioned in the [Settlement] Agreement and not being confined to the assets of the Estate.  If not, it would mean further accounting and action will be required to complete the working out of the [Settlement] Agreement.

12. Indeed, this position appears to be acknowledged by [John] in [John’s 7^th Affidavit] paragraphs 12(2) to (3), where he noted that these properties are ‘part and parcel of our global settlement in the [Settlement] Agreement’, and ‘form part of the overall reckoning which has to be done in the final distribution of the Estates’ despite not forming part of the Estates.

13. In the premises, insofar as calculating [John]’s entitlement is concerned, it would be inefficacious to try to differentiate between properties that belong to the Estate on one hand, and properties that were jointly/co-owned by [John], Esther and me as mentioned in the [Settlement] Agreement on the other hand.  This would also likely lead to further litigation concerning the performance of the [Settlement] Agreement.

14. Further, it is crucial to bear in mind that the [CS Wong Report] was specifically prepared to calculate [John]’s final entitlement under the [Settlement] Agreement.  In such context, whether the amount deducted from [John]’s entitlement would be credited to me and Esther (for properties of the Estates), or me alone (for properties jointly/co-owned by me and [John]), does not affect [John]’s position.  So long as the deduction correctly reflects the arrangement under the [Settlement] Agreement, [John] has no reason to complain.”

45.  I am of the view that it is crystal clear that Wing Dee’s argument does not hold water at all, to the extent that there is no triable issues which have to be resolved at a trial as such.

46.  This is because although the Settlement Agreement is indeed an agreement which is for the global settlement of all disputes among the siblings, that does not mean that Wing Dee is entitled to hold up John’s entitlement which he, as administrator of the Estates, is supposed to distribute, for the sake of his (Wing Dee’s) own personal interest. In a way, it is an abuse of his power as administrator of the Estates.

47.  The reliance on the CS Wong Report in support of this head of Deduction is equally bad because Ms Susan Wong, the accountant, has, like Wing Dee, mixed up the two different capacities of Wing Dee. 

48.  As far as the disposition tax for the transfer of the 4 Robson Units is concerned, that is again a matter between Wing Dee (in his personal capacity) and John even if such tax is payable.  Hence, it is not right to withhold any entitlement of John in the Estates for that reason.

49.  I therefore conclude that the deduction of HK$18 million is totally unjustified and should be taken out from the formula.

50.  I should also note that Wing Dee has procured the Kroll Report as a valuation report of the 4 Robson Units, despite the fact that the way to value the aforesaid properties has been clearly provided for under Clause 7(e) of the Settlement Agreement[3]. It was submitted by his counsel that it is necessary to do the Kroll Report because the valuation method prescribed under Clause 7(e) of the Settlement Agreement is “not feasible nor accurate, as these entities are not professional valuer of properties”[4]. It was also boldly stated that “there is no evidence adduced by [John] to dispute Kroll’s market valuation of the Canadian Properties as given in Kroll’s 1^st Report and confirmed in Deloitte Report”[5]. With greatest respect, it is simply not open to Wing Dee to rely on such arguments, for he is bound by the Settlement Agreement.  It is not up to him to depart from the terms of the Settlement Agreement whenever he wishes to do so.  Again, I refer to his counsel’s representation that it is his position that he has to perform the Settlement Agreement.

D2.3   The residual rental income

51.  Wing Dee seeks to deduct the sum of HK$48,894,060 from John’s entitlement of the Estates under this head.

52.  Paragraph 4(a) of the Settlement Agreement provides that:

“John will discharge the outstanding mortgage at his expenses on Properties I as mentioned in the schedule of the list of Canadian Properties (hereinafter referred to as ‘Schedule ‘A’) attached hereto and to provide to Wing Dee and Esther, a set of statement of accounts in respect of all the properties under Schedule ‘A’ hereto from time of death of the Father and Mother to the present.  The statements of accounts will show all items of income & expenditure of the Canadian Properties under Schedule ‘A’ and John will be accountable as trustee to & from the pool of assets.”

53.  John has produced a report by Ms Mavis Tan (a chartered accountant and partner of Control Risks Pacific Limited) dated 23 January 2025 (“the Control Risks Report”), which, among other things, confirmed that the Estates are accountable to John in the sum of CAD231,885 being the net deficit from the Spadina Units and Robson Unit 101.  However, on the strength of the Kroll Report, Wing Dee disagreed with this conclusion.  In support of his case, Wing Dee has produced two reports, namely, the Kroll Report and a report by Deloitte dated 11 June 2025 (“the Deloitte Report”).  He has put forward a simulated model of the rental income which he said John should have fetched but for his (alleged) breach of the duty as a trustee of the said properties.  There is also an allegation that the level of expenses which John has allegedly incurred is unusually high.  Moreover, Wing Dee challenges that the documents and information used in the Control Risks Report are unreliable and incomplete.

54.  On the above bases, it was submitted on behalf of Wing Dee that the issues concerning the rental (and expenses) matters of the Spadina Units and Robson Unit 101 can only be resolved after detailed examination of the documents and cross-examination of the makers of the statements.

55.  I agree with Mr Smith SC that the approach adopted by Wing Dee has quite a number of problems.

56.  Firstly, it is apparent that the basis upon which the Deloitte Report was done is wrong. 

57.  In paragraph 3.3 of the Deloitte Report, it was said that:

“[The Control Risks Report] indicates that an accounting of net receipts for the Toronto and Vancouver units for purposes of estimating net surplus/deficit should be based on actual income and expenses.  However, we note that the actual income and expenses used by [the Control Risks Report] and shared with Kroll during preparation of their report was not audited and therefore, the accuracy of the same cannot be established.  In the absence of audited financial statements indicating reliable revenue and expenses for the Toronto and Vancouver units, use of market simulated revenue and expenses is a reasonable method.  This is consistent with how a typical investor would evaluate the net surplus/deficit that would be associated with the Toronto and Vancouver Units.”

(emphasis added)

58.  However, it has been clearly held by the Court of Appeal in the Appeal Judgment that, in the present case, the statement of accounts to be produced by John need not be audited for the purpose of the Settlement Agreement.  It is thus regrettable that Wing Dee is still mounting his challenges against John’s accounts on the basis that the accounts were unaudited.

59.  If the evidential basis in support of this head of the Deductions is gone, the ground for keeping the HK$48,894,060.00 would also collapse.

60.  Secondly, in my view, Wing Dee’s challenges that the information and documents relied on by Ms Tan in the Control Risks Report cannot even get off the ground.  This is because, pursuant to the Clause 4(a) and (c) of the Settlement Agreement, it was the mechanism built in in the parties’ agreement that the account matter should be finalised by John’s production of a statement of account, which, if it is so requested by the other side, has to be certified by a qualified accountant.  Now that Ms Mavis Tan who is a chartered accountant has confirmed the accounts, I do not think it is up to Wing Dee to say that Ms Tan’s conclusion was based on incomplete or unreliable materials.  That is the whole purpose of getting a professional accountant to certify the accounts.

61.  Thirdly, as far as the expenses incurred are concerned, Mr Li SC admitted that there is no dispute that the figures of expenditures adopted by Ms Tan in the Control Risks Report represent the actual amount of expenses incurred by John.  That being so, it is futile for Wing Dee to establish the “market norm” of expenses.

62.  I also do not understand why Wing Dee would insist that the expenses incurred by John in maintaining the Spadina Units and Robson Unit 101 as trustee (or at least partly thereof) should not, as a general principle, be set off against the rental income which John has received.  This is contrary to Clause 4(a) of the Settlement Agreement, which provides that the statement of account which John is to produce shall show “all items of income & expenditure of the Canadian Properties”.

63.  Fourthly, insofar as it is Wing Dee’s case that John has breached his duty as a trustee of the Spadina Units and Robson Unit 101 to fetch the market rent and/or to rent the premises out at all times, the short answer is that it is up to Wing Dee to pursue that claim in a separate action if he considers that it is his duty as the administrator of the Estates to do so.  However, I do not think, for the present purpose, there is adequate material for Wing Dee to say that, on the basis of the market rental, John is prima facie liable as a trustee. That would be a quantum leap.

64.  Fifthly, while on the face of it, it seems that Wing Dee has produced 2 separate reports (the Kroll Report and the Deloitte Report) in support of his case here, those reports were in fact done by the same person – a Mr Prakash Venkat, who is an accredited appraiser with the Appraisal Institute of Canada. 

65.  Pausing here, I am of the view that it is necessary to refer to the following parts of the CFI Judgment in which DHCJ To had the following to say:

“122.   In conclusion, I am satisfied that John has not given a proper account of the Canadian Properties, the use of the mortgage loans and the rental income.  The mortgages appear to be fictitious.  John puts suspicion on himself by excluding Esther from control of the rental income.  The genuineness of the mortgages and the use of the mortgage loan had to be properly investigated.  WD’s estimation of the rental income is very crude. The only proper way to do justice to all parties is to have the matter properly examined and assessed by a qualified accountant.

242.     […] Intervention by a properly qualified accountant to estimate the missing information in relation to the Canadian Properties and other properties under John’s control is necessary, particularly the rental income of the Toronto Properties and the value of the Father’s equity in the Disputed Units.  John’s co-operation is unlikely to be forthcoming.  In the circumstances, the proposed appointments are essential steps to be taken for completing the administration of the Estates.  Given the mutual distrust among the parties, these steps can safeguard the interest of all parties concerned […]”

66.  While it had been held in the Appeal Judgment that the learned Judge had erroneously come to the conclusion that “certified accounts” and “audited accounts” are the same, the 2021 CFI Orders were not set aside.  Hence, the requirement of there being a professional accountant to finalise the accounts has remained intact.

67.  However, without disrespect, Mr Venkat is not an accountant at all.  He is therefore not eligible to do any expert report to challenge the Control Risks Report.

68.  In the Deloitte Report, it was stated by Mr Venkat that the Kroll Report was prepared by himself and Ms Connie Lee who is a chartered professional accountant[6]. In paragraph 16 of Wing Dee’s 4^th Affirmation, Wing Dee also “note[d] that the Kroll Report on income calculation was also prepared by Connie Lee”.  However, I regret to point out that that was not what was stated in the Kroll Report, in which it was unequivocally written in the covering letter thereof that:

“This Report has been prepared by Prakash Venkat, Kroll’s Canadian Practice Leader of Real Estate Advisory, in accordance with the Consulting and Real Property Appraisal Standards requirements set forth in the Canadian Uniform Standards of Professional Appraisal Practices (‘CUSPAP’) of the Appraisal Institute of Canada (‘AIC’), effective as of the Valuation Date […]”

(emphasis added)

69.  Although the said covering letter ended with a sentence saying that Wing Dee and Esther may contact either Mr Venkat or Ms Connie Lee if they have any questions, that apparently is not a representation that the Kroll Report had been in any way contributed to by Ms Connie Lee.

70.  Wing Dee’s counsel also submitted that the accounts are prepared by Ms Susan Wong who is an accountant.  However, while the CS Wong Report was indeed prepared by Ms Wong, it is obvious that the basis of the CS Wong Report is the Kroll Report.  Hence, this argument does not assist Wing Dee.

71.  Wing Dee himself also suggested in his 4^th Affirmation that Mr Venkat is in the view of Kroll Limited the best candidate to undertake the task.  That is totally beside the point, as Wing Dee is subject to the 2021 CFI Orders which had specified the expertise of the expert.

72.  All in all, I reject Wing Dee’s arguments on the so-called “unaccounted residual rental income”, which in my view are totally unsustainable and unarguable.

D2.4   The Skyscraper Flat

73.  The next head of Deductions is in relation to the Skyscraper Flat.

74.  The said property was held by Father on trust for John and Wing Dee in equal shares.  In other words, it is not part of the Estates.

75.  In paragraph 8(a) of the Settlement Agreement, it was provided that John will take over Wing Dee’s share of the Skyscraper Flat.

76.  In Part 3 of the CS Wong Report, it is stated that:

“Pursuant to the [Settlement] Agreement, John will take over the 50% interest of the captioned property, of which the average valuation of the property as derived from the valuation of HSBC, Hang Seng Bank and Citibank is HK$35,520,000.  The valuation of the Car Parking Space is HK$1,500,000 obtained by comparing the valuation of the Property and of the Residential Unit alone provided by Hang Seng Bank.  The fair market value of the Property is HK$37,020,000.

Part 3		Due to Estate HK$	Due to Esther & Wing Dee HK$
half share of 5E Skyscraper, 140 Tin Hau Temple Road, HK (HK$37,020,000 + expenses) (HK$37,020,000/2 + HK$1,140,986.74)			19,650,986.70
(**Expenses include half share of the Maintenance and Renovation Fees being HK$626,553.34 and half share of Management Fee, Rates and Government Rent being HK$514,433, total of HK$1,140,986.74.)

77.  In my view, the reasoning of the conclusion reached in section D2.2 above applies equally to the Skyscraper Flat – since it does not belong to the Estates, it is not up to Wing Dee, in his capacity as the administrator of the Estates, to withhold certain payment owed to John for his (Wing Dee’s) own personal interest.  Again, this is an abuse of his power as administrator for his own benefit.

78.  The deduction in the sum of HK$19,650,986.70 is therefore not justified, and should be taken out from the formula.

79.  In the course of his argument, Mr Smith SC stated that John is also willing to give an undertaking to pay HK$14,370,000 to Wing Dee and bear 50% of the alleged expenses for the Skyscraper Flat to date in consideration of the transfer of the latter’s 50% interest in the property. However, given the Skyscraper Flat is not part of the Estates, and coupled with the fact that there may well be a dispute as to the valuation of the Skyscraper Flat, I do not think the Court should accept John’s undertaking as such.  The two brothers should sort out this aspect of their disputes themselves.  As I pointed out to the parties, if they are sensible enough, the matter can be resolved by the appointment of a single joint expert who may do an assessment of the expenses.  As for the value of the property, the mechanism of valuation has been set out in the Settlement Agreement.

D2.5  Expenses reimbursable

80.  Finally, Wing Dee seeks to deduct HK$8,681,516.47 under this head.

81.  This stance is made on the basis of Part 4 and Appendix 4 of the CS Wong Report, in which a total of 24 items was set out, and it was said that John should reimburse the Estates for those legal and professional fees, tax and other expenses.

82.  At the hearing, Mr Smith SC only sought to argue on 3 out of those 24 items, and he said that the rest may be dealt with “at some point”, and they “will be either resolved amicably or not”.  Those 3 items are:

(1)  Item Nos.1 and 2 – taxed costs of HCMP 48/2001 dated 21 July 2004 and 9 December 2004, in the sums of HK$496,439 and $57,126 respectively;

(2)  Item No.23 – legal costs of the appeal in the sum of HK$2,000,000.

83.  In relation to the taxed costs of HCMP 48/2001, Mr Smith SC submitted that those 2 items should not have been taken into consideration because parties have agreed not to enforce any previous costs order against each other by virtue of Clause 6(a) of the Settlement Agreement (which is dated 6 March 2009).

84.  In respect of the costs of the appeal, the figure of HK$2,000,000 was only an estimate.  However, parties have recently come to an agreement that such costs be fixed at HK$762,500.   Hence, an amount of HK$1,237,500 is no longer required to be withheld.

85.  The overall effect of the above arguments is that the sum of HK$1,791,065 (HK$1,237,500 + HK$496,439 + HK$57,126) should not be further held up.

86.  It seems to me that Wing Dee’s counsel had no answer to the arguments above save as to say that, be that as it may, there should be no payment out at this point of time because it is unknown what the final net amount would be.

87.  I do not accept such an argument.  In my view, if there is no reason why any part of the Estates should be further withheld from being distributed to John, then that part of the Estates should be paid to John forthwith.  There is no need to wait.

88.  Therefore, the sum of HK$1,791,065 should be released to John, and only HK$6,890,451.47 should remain in court.

D2.6  The Deductions - conclusion

89.  To conclude, I hold the view that all the Deductions (apart from HK$6,890,451.47) are not justified. 

90.  Mr Li SC argued that, be that as it may, the Court has no jurisdiction to order interim payment pending the taking of account.  With respect, this argument is misconceived, because as Mr Smith SC pointed out, there must have been an account already taken which resulted in the initial sum of HK$132,891,345.73 paid into Court.  In this regard, as aforesaid, Mr Li SC has also admitted at the substantive hearing that, but for the Deductions, John is entitled to the entirety of the said sum as his share in the Estates.   

91.  I have not forgotten Mr Li SC’s reminder that, according to case authorities such as Re Estate of Lau Wai Chau [2024] HKCFI 175, an administrator must provide for future and contingent liabilities of the estate.  However, it should be recognised that there is no hard and fast rule and the court does retain a discretion on this matter.  It is open to the court to permit distribution without requiring the administrator to make a retention or obtain security in respect of contingent or unknown liabilities in appropriate circumstances, for example, if the court holds the view that the injustice to the beneficiaries being kept out of the benefit on account of unascertained liabilities that might never arise outweighed the risk that unknown and contingent creditors who had paid for insurance cover might find their claims unsatisfied: at [20].

92.  In the present case, I am of the view that the Court should exercise its discretion in allowing distribution without waiting any further.  As far as the potential claim against John by the Estates is concerned, on the basis of the materials placed before this Court, I cannot say that it is probable that John will be held liable.  He has been kept from his entitlement for a very long time whereas distributions of large amount of money have been made to Wing Dee and Esther long time ago.  It is simply unfair to John for him to be treated in this way.  Furthermore, even if he at the end of the day is held liable, there is no evidence that he will be unable to satisfy any judgment which will be made against him.

93.  Therefore, the sum of HK$112,300,894.26 (the remaining sum in Court after the release of HK$13.7 million[7] minus HK$6,890,451.47) should be released to John immediately.

D3.  Other Distributions

D3.1  Shares

94.  In the CS Wong Report, it was recognised that there are tradable shares held by Wing Dee, and the total market value of those shares as at 26 September 2024 was HK$28,065,854.42.

95.  It was further stated in the CS Wong Report that:

“[…] [the] tradable shares held by Wing Dee […] can be used to settle amounts outstanding from John when the sum presently held by the court is insufficient […]

Balance held in Court Pending Distribution and Shares held for Disposal
	HK$
Sum Paid into Court for Distribution	132,891,345.73
Sum Paid out to John	(13,700,000.00) ______________
Remaining Balance for Distribution	119,191,345.73
Settlement Distribution Due from John Owing to Wing Dee & Esther	140,226,564.17[8]
Insufficient Balance in the Pending Distribution Held in Court (HK$140,226,564.17 – HK$119,191,345.73)	HK$21,035,220

From the above, there seems to be a shortfall in the sum held by the court to cover the settlement owning from John.  There is a deficit amount of approximately HK$21,035,220 to cover the settlement distribution owing from John.  However, Wing Dee currently holds shares of John that is readily tradable on the stock market, with a market a value of approx. HK$28,065,854.42 as at 26.09.2024. Taking this into account, the deficit will be covered leaving a residue of approx. HK$7,030,634 (less stamp duty) to be paid back to John. (HK$28,065,854.42 – HK$21,035,330 = HK$7,030,634)”

96.  It can be seen that the sole reason for the non-distribution of the listed shares is that the balance of John’s entitlement paid into court is said to be insufficient to cover the alleged amount owed by John to Wing Dee and Esther in the sum of HK$140,226,564.17.  Following from my rulings hereinabove, this basis is completely gone, because the only item of Deductions which may be justified is the legal and professional costs, tax and other expenses in the sum of HK$6,890,451.47.  This amount will remain in Court pending the further determination of the merits of Wing Dee’s claim of reimbursement.

97.  That being the case, there should be forthwith distribution of the listed shares to which John is entitled.

D3.2  Jewellery

98.  For the same reason, there is no justification for Wing Dee to withhold the distribution of the jewelleries to which John is entitled.

E.  ORDERS

99.  I make the following orders:

(1)  A declaration that the deductions purportedly made (or to be made) by the 1^st respondent as set out in the following items of Schedule 2 attached to the Summons filed on 17 February 2025 are improper and unjustified:

(a)  Items 1 – 7;

(b)  Item 8, but limited to HK$1,791,065.

(2)  An Order for payment out of the sum of HK$112,300,894.26 out of the HK$119,191,345.73 remaining in Court to the applicant. 

(3)  An Order that the 1^st respondent do transfer to the applicant (or his nominee) the shares held by 1^st respondent in his account held with The Hongkong and Shanghai Bank (account number: xxx-xxxxxx-xxx) as set out in the first letter from Messrs. Yung, Yu, Yuen & Co., to Messrs. Norton Rose Fulbright Hong Kong dated 26 February 2024 (the “YYY February 2024 Letter”). 

(4)  An Order that the 1^st respondent do distribute and/or transfer to the applicant (or his nominee) the latter’s share of jewellery retained and/or held by the 1^st respondent as set out in the YYY February 2024 Letter.

100.  As far as the legal and professional costs, tax and other expenses in the sum of HK$6,890,451.47 is concerned, parties should discuss between themselves as to how they would like to have the matter resolved, and shall use their best endeavours to agree on the directions to be sought from the court for the purpose of the determination thereof (if necessary).

101.  Parties shall lodge the draft directions for approval on or before 27 January 2026.

102.  In the event the parties are unable to agree on the directions, each party should submit his respective draft directions on or before 3 February 2026, giving reasons for disagreeing with the other party’s draft.  I will determine the matter on the papers thereafter, unless a party raises an objection to such a course, with supporting reasons.

F.  COSTS

103.  It may be recalled that part of the Distribution Summons (for providing a just and true account and make due distribution of certain unaccounted assets) has been adjourned to be dealt with in due course, upon the parties’ filing of further evidence.  I would apportion 25% of the costs incurred on the Distribution Summons so far to this part of the application.

104.  As for the remaining 75% of the costs, I tentatively take the view that John should be awarded 90% of his costs, having taken into account his failure to get the entirety of the sum of HK$8,681,516.47 under section D2.5 above.

105.  Further, by reason of my finding that Wing Dee has abused his position as administrator of the Estates for the protection of his own personal interest, I take the preliminary view that he should personally bear at least part of the costs.

106.  For the above reasons, I make the following costs order nisi:

(1)  25% of the parties’ costs of the Distribution Summons be reserved;

(2)  Out of the remaining 75% of the applicant’s costs of the Distribution Summons, the 1^st respondent shall bear 90% thereof, and he may only recover 50% out of the said 90% from the Estates (leaving the other 40% out of the said 90% to be personally borne by him);

(3)  There be certificate for two counsel;

(4)  The applicant’s costs shall be summarily assessed in lieu of taxation.  Unless any application for variation of the costs order nisi is made within time, the applicant shall lodge and serve his statement of costs within 7 days after the expiry of the 14-day period referred to in the paragraph below.  The 1^st respondent shall lodge and serve his statement of objection within 7 days thereafter.  Summary assessment of the costs of the Distribution Summons will be conducted on paper (no matter whether any statement of objection is lodged by the 1^st respondent within time) thereafter.  The costs assessed shall be paid within 14 days after assessment.

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

Annex 1 – The Settlement Agreement

[…]

(1)  The parties agree in principle to divide all the family assets into 3 equal shares after assessing the pool of assets (hereinafter referred to as ‘pool of assets’) in the manner hereinafter described.  (save & except hereinafter mentioned) The distribution of assets will take place only after the court approval, Yvonne’s 2 sons consent, Department of Justice & estate duty clearance & all payments of reasonable expenses herein mentioned. 

(2)  The parties agree to assign US$4 million to charitable purposes out of the pool of assets in the following proportions:

-  Party A to contribute US$2 million (out of his share under clause (1)) and

-  Party B to contribute US$2 million. (out of their share under clause (1))

-  Each party will set their own charitable objectives that are approved by the necessary authorities including the Department of Justice, the Inland Revenue and the Court in Hong Kong and/or in Canada.  and manage their charitable trusts independent of the other party.  The parties will instruct their respective solicitors to follow through with the documentation and settling the contribution for their respective charitable objectives.

-  The parties agree to apply the US$4 million for charitable objectives that their parents have taught them as socially conscious individuals.

(3)  The parties agree that Yvonne’s 2 sons will get US$1 million per person out of the pool of assets provided that they will give the necessary consent to the family arrangement that the parties have agreed hereinafter.  The parties will instruct a solicitor to prepare the necessary documents for their signature. 

(4)  The parties agree to full disclosure of all information in respect of the accounts under the pool of assets as soon as practicable and in any event not later than 31^st May, 2009 30^th June, 2009.  The parties agree to perform the following acts to the and to exchange of the information in the following manner:

(a)  John will discharge the outstanding mortgage at his expenses on Properties I as mentioned in the schedule of the list of Canadian Properties (hereinafter referred to as ‘Schedule ‘A’) attached hereto and to provide to Wing Dee and Esther, a set of statement of accounts in respect of all the properties under Schedule ‘A’ hereto from time of death of the Father and Mother to the present.  The statements of accounts will show all items of income & expenditure of the Canadian Properties under Schedule ‘A’ and John will be accountable as trustee to & from the pool of assets.

(b)  Wing Dee and Esther will provide to John a set of statement of accounts in respect of all the properties and bank accounts of the pool of assets under their control in the past from the time of death of the Father and the Mother up to the present.  The statements of accounts will show the flow of funds & Party A will be accountable as trustees to & from the pool of assets.

(c)  The statement of account will have to be certified by qualified account upon request of the other party.  The costs incurred in certifying the accounts will come from the pool of assets. 

(5)  In respect of the latest request form the Inland Revenue Department to clarify the accounts under the estate of the Mother, John agrees to follow up and take such action as appropriate according to the information provided by Wing Dee. 

(6)  In respect of legal costs incurred by the parties, the parties agree to the following:-

(a)  John, Esther and Wing Dee will each take HK$2 million out of the pool of assets to cover their individual legal costs after full disclosure of accounts as mentioned in Clause (4) of this Agreement.  and parties agree not to enforce any previous costs order against each other in HK and Canada.

(b)  After the signing of this Agreement, all reasonable legal costs or costs in hiring accountants will be payable from the pool of assets provided they are for the purpose of payment of estate duty for the estates of the Father and Mother.

(c)  The future legal costs for the Court hearings to put a closure to the litigation that has been going on and for the purpose of finalizing the family settlement will be paid out of the pool of assets. 

(d)  All costs incurred for the purpose of dealing with the Department of Justice and the Inland Revenue Department and for the common benefit of the parties after the signing of this Agreement will be borne out of the pool of assets. 

(e)  The parties will jointly instruct a solicitor to deal with the frozen bank accounts and to request for the shares under the Mother’s estate to be uplifted released from the Court’s custody so that the Hong Kong Bank writs rights issues will be taken up dealt with as soon as possible. 

(7)  The parties agree to distribute the Canadian Properties under Schedule ‘A’ in the following manner: and to enforce all such documents & take such actions as necessary:

(a)  John will take up apartments 801, 707, 905.

(b)  Esther will take up apartments 803, 705, 706.

(c)  Wing Dee will take up apartments 101, 501,907.

(d)  Wing Dee will take up the shares of Wing Dee of the 4 units in Vancouver under Properties III. & Wing Dee be paid by John individually

(e)  The parties agree that the valuation of the Canadian Properties will be taken from 3 independent real estate agents namely, Re-Max, Royal Lepage, Toronto Dominion Bank and the average price will be used for the final adjustment upon distribution of the pool of assets among the parties. 

(f)  The parties agree that the Canadian Properties will be managed in the same manner until final distribution of the pool of assets. 

(g)  All costs of transfer & tax will be shared by the parties including capital gain tax. 

(8)  The parties agree to the distribution of the Hong Kong properties as follows:

(a)  John will take over Wing Dee’s share of “Skyscraper” being the family home of the Father and Mother.

(b)  Esther and Wing Dee will take over John’s share of “Majestic Factory”.

(c)  The valuation of the Hong Kong properties will be taken from 3 banks and the average price will be taken for the purpose of final adjustment in the distribution of the pool of assets. 

(d)  All costs of transfer & tax will be shared by the parties. 

(9)  The parties agree that Wing Dee will be appointed the official Administrator of the estates of the Father and the Mother as soon as practicable.  He will have the authority to pay all reasonable costs in administration of the estates of the Father and the Mother and related costs including legal costs and mediation costs that the parties have agreed to come out of the pool of assets. 

(10)  The parties agree that they will use mediation in the future as the forum to discuss queries about the accounts, distribution and matters arising in the administration of the estates of the Father and the Mother and all matters relating to the pool of assets and distribution thereof.  The future costs of mediation will come out of the pool of assets.

(11)  The parties agree to have the terms of this Agreement to be approved by the Court and agree to instruct their respective solicitors to proceed accordingly.  All Canadian legal proceedings will be stayed forever.  All parties will not claim against each other in respect of the current litigation after distribution of the pool of assets as herein described. 

Wing Dee will receive the sum of HK$8,740,980.86 from the pool of assets being moneys due by the pool of assets to Wing Dee.

Save and except the transactions mentioned in this Mediation Agreement, all the loans due from the parties to the estates will be waived and not to be pursued.

SCHEDULE ‘A’

Canadian Properties:

Properties I: 188 Spadina Ave. units 501, 705, 706, 707, 801, 803, 905, 907.

Properties II: Robson Street, “Sundial” unit 101.

Properties III: Robson Street, “Sundial” units 302, 303, 701, 801.