CHAN SIU MAN v. LAM JENNY AND OTHERS

HCMP 1282/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1282 OF 2010

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D E C I S I O N

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1.  Mr Lam Kam Wai (“Lam”) died intestate on 8 September 2006. He left 4 children from his marriage to his former wife, whom he had divorced in 1993. The plaintiff, Madam Chan Siu Man (“Chan”), had commenced cohabiting with Lam since 1988. She claimed that Lam had already separated from his wife then, and that she and Lam had gone through a traditional Chinese wedding ceremony in September 1988. Chan’s daughter, Rebecca, was born in December 1989 and a son was born in March 1993. Chan claimed that since 1988, she had been accepted by Lam’s family, friends and colleagues as his wife. She also claimed that she had contributed to Lam’s setting up of a business of importing and exporting food products and in particular, an artificial sweetener, which proved to be very successful. It is Chan’s claim that she and her 2 children had been maintained by Lam throughout the 18 years of their cohabitation until his death, and that Lam had provided for her and her children in all respects of their lives.

2.  Chan claimed that after Lam’s death in 2006, Lam’s family members stopped providing maintenance for herself and her 2 children.  On 29 March 2010, she made application to the Court under section 3 of the Inheritance (Provision for Family and Dependants) Ordinance (“Ordinance”), for reasonable financial provision to be made for herself (“Application”).  Chan claimed to be a person who immediately before Lam’s death was being maintained wholly or substantially by Lam, under section 3 (1) (ix) of the Ordinance. 

3.  On 19 January 2012, the four children born to Lam and his former wife were joined as 2nd defendants to these proceedings.  Rebecca and her brother were also joined as 3rd defendants.  Evidence was filed by Chan in support of her Application, and by the 2nd defendants in opposition.

4.  Before the Application could be heard, Chan died in May 2012.  By her will, she had appointed Rebecca to be the executrix of her estate. 

5.  On 31 May 2012, Rebecca applied as the personal representative of Chan’s estate for an order to carry on these proceedings under Order 15 rule 7.  On 8 June 2012, the 2nd defendants applied to strike out Chan’s Application, on the ground that Chan’s cause of action under the Ordinance does not survive her death.

6.  On 22 June 2012, I ordered that the applications for the order to carry on and for striking out should be heard together.

7.  The issue for determination is whether it is plain and obvious that Chan’s claim for reasonable provision under the Ordinance should be struck out as being unsustainable in the event of her death, such that the order to carry on sought should be refused.   

8.  As stated in its long title, the Ordinance is “to make provision for empowering the court to make orders for the making out of the estate of a deceased person of provision for certain members of that person’s family and dependants of that person, and for connected matters”.  Under section 3 of the Ordinance, persons who may apply for “reasonable financial provision” include the spouse of the deceased, the former spouse of the deceased who was being maintained wholly or substantially by the deceased immediately before his death, a tsip or male partner of the deceased by a union of concubinage, and any person including an adult child of the deceased who was being maintained wholly or substantially by the deceased immediately before his death.

9.  The Ordinance was based largely on the English Inheritance (Provision for Family Dependants) Act of 1975 (“1975 Act”).  In the English case of Re Coventry [1980] 1 Ch 461, the purpose of the 1975 Act was referred to in the judgment of Oliver J (at p 474F/G):

“It seems to me, however, that in regarding the circumstances and in applying the guidelines set out in the Act, it always has to be borne in mind that the Act, so far as it relates to applicants other than spouses, is an Act whose purpose is limited to the provision of reasonable maintenance. It is not the purpose of the Act to provide legacies or rewards for meritorious conduct. Subject to the court’s powers under the Act and to fiscal demands, an Englishman still remains at liberty at his death to dispose of his own property in whatever way he pleases, or, if he chooses to do so, to leave that disposition to be regulated by the laws of intestate succession. … The court has no carte blanche to reform the deceased’s dispositions or those which statute makes of his estate to accord with what the court itself might have thought would be sensible if it had been in the deceased’s position.”

10.  Leading Counsel for Chan argued that Chan was clearly within the class of persons entitled to apply for reasonable provision from Lam’s estate under section 3 of the Ordinance, as she was a person who had (on her evidence) been maintained, either wholly or substantially, by Lam immediately before his death. At the time when the Application was made in March 2010, Chan had the statutory right under the Ordinance to make the Application.  It was argued that Chan had a statutory cause of action under the Ordinance, and that by virtue of section 20 (1) of the Law Amendment and Reform (Consolidation) Ordinance (“LARCO”), such statutory cause of action which vested in Chan at the date of her death survives for the benefit of Chan’s estate.

11.  In Whytte v Ticehurst [1986] Fam 64, the wife of a deceased applied for reasonable financial provision under the 1975 Act, and died before the substantive hearing.  The personal representative of the wife applied for an order to carry on the application, but such application was dismissed by the court.  It was held that under the 1975 Act, the widow was given no enforceable right against the estate of the deceased spouse but merely the right to apply to the court for relief against the estate, and until the court granted relief under the 1975 Act, the widow had no cause of action that could survive her death and be enforced by her personal representatives.

12.  It was argued on behalf of Chan that Whytte v Ticehurst is distinguishable, as the application in Whytte was made by the surviving wife of the deceased husband, and the court drew analogy with the English Matrimonial Causes Acts of 1970 and 1973 in reaching its decision on the relief granted to the surviving wife under the 1975 Act.  In the judgment of Booth J, the Matrimonial Causes Acts were referred to at page 69F-G:

“The Inheritance (Family Provision) Act 1938 enabled the court to provide some financial provision for a surviving spouse from the estate of his or her deceased spouse. Under this Act the court could only make financial provision for maintenance which was first limited to periodical payments but later extended to include a lump sum when the power to grant that relief was introduced into the matrimonial legislation. Subsequently the Inheritance (Provision for Family and Dependants) Act 1975 incorporated all the reliefs available in sections 23 and 24 of the Matrimonial Causes Act 1973. To my mind the purpose of this legislation was to enable the court to place the surviving spouse in the financial position he or she would have been in had a matrimonial decree been granted during the lifetime of the other. The foundation of the jurisdiction is, as in the matrimonial legislation, the relationship of the two parties to the marriage, and the only right that the statute gives is the right to the survivor to apply for relief against the estate of the deceased spouse.”

13.  It was hence argued by Mr Fung SC for Chan that although Booth J concluded in Whytte that the claim that may be made by the surviving spouse is personal, and that it is only when an order has been made upon the claim for reasonable provision that an enforceable cause of action subsists, such conclusion was founded on the analogy between the matrimonial legislation and the 1975 Act so far as it affects the claim by a spouse. 

14.  Mr Fung submitted that the meaning of the phrase “cause of action” in section 20 (1) of LARCO should be considered outside the matrimonial context, since Chan was claiming as a dependant and not a spouse.  He relied on the description of “cause of action” used by Diplock LJ in Letang v Cooper [1965] 1 QB 232 at 242-243, namely: “a factual situation the existence of which entitles one person to obtain from the court a remedy against another person” (my emphasis).

15.  The meaning of “cause of action”, as used in section 1 (1) of the Law Reform (Miscellaneous Provisions) Act 1934 (the equivalent of our section 20 (1) of LARCO), was also explained in some detail in the judgment of Denning LJ in Sugden v Sugden [1956] P 120 at 134:

“‘Causes of action’ in the section means, I think, rights which can be enforced - or liabilities which can be redressed - by legal proceedings in the Queen’s courts. These now survive against the estate of the deceased person. ‘Causes of action’ are not, however, confined to rights enforceable by action, strictly so called - that is, by action at law or in equity. They extend also to rights enforceable by proceedings in the Divorce Court, provided that they really are rights and not mere hopes or contingencies. They include, for instance, a sum payable for costs under an order of the Divorce Court, or a right to a secured provision under an order already made against a man before his death… In an action in the Queen’s Bench there is usually no difficulty in determining when the right or liability accrued due: but there is more difficulty in proceedings in the Divorce Court. In that court, there is no right to maintenance, or to costs, or to a secured provision, or the like, until the court makes an order directing it. There is, therefore, no cause of action for such matters until an order is made. This view of proceedings in the Divorce Court is supported by the decision of my brother Hodson in Dipple v Dipple, where he pointed out that all that the wife had was the hope that the court would in its discretion order a secured provision. She had no right to it at all until the order was actually made, and hence she had no cause of action at his death. While I entirely agree with that decision, I do not think that the fact that a cause of action is discretionary automatically takes it out of the Act. An injunction is a discretionary remedy, but, if a cause of action for an injunction subsisted at the death, I should have thought it would survive against the personal representatives. The only thing which takes a case out of the Act is the absence of an enforceable right at the time of death.” (Emphasis added.)

16.  The judgment of Denning LJ in Sugden v Sugden was referred to and applied by Booth J in Whytte.  Although Booth J in her decision accepted the relationship of the two parties to the marriage as the foundation of the jurisdiction of the court under both the 1975 Act and the Matrimonial Causes Acts, it is also clear from her judgment that she accepted the existence of “an enforceable right” as the defining test of a cause of action.

17.  Whereas Whytte concerns an application for reasonable provision made by the surviving spouse of a deceased, In re Collins, Deceased [1990] Fam 56 concerns an application for reasonable provision made by a child of the deceased.  There, the English court held that a right to apply for provision under the 1975 Act was not an interest expectant which would be preserved on the child’s adoption, and at the time of the making of the child’s application under the 1975 Act, because the child had already been adopted and had ceased to be qualified as a child of the deceased, the court had no jurisdiction to acede to his application for provision to be made out of the estate of the deceased.

18.  In dealing with the submission made on behalf of the adopted child, that before he was adopted, he had an interest expectant, in the form of a vested right or chose in action, to make a claim under the 1975 Act as a son, Hollings J had this to say in his judgment (at p 60):

“I am satisfied, without reference to authority, that such an ‘interest’ was really no more than a hope and that the mere existence, before he was adopted after the death of the deceased, of a provision of the (1975 Act) which would have entitled him to make an application did not vest in him any interest expectant.”

The learned judge then referred to Whytte and concluded that what the son had, before he was adopted, was not a cause of action. 

19.  There is no direct authority on the point in Hong Kong.  In the case of Tam Mei Kam, a Bankrupt HCB 3777/2001, unreported 18 July 2012, Barma J dealt with the question of whether maintenance payments made under an order already made under the Ordinance for reasonable provision for the mother of a deceased should form part of the bankrupt mother’s estate.  In Tam Mei Kam, the mother had rights to the payment under the court order made.  His Lordship considered Whytte v Ticehurst, accepted the submission that claims to maintenance under the 1975 Act and to matrimonial maintenance are personal to a bankrupt, and considered that rights to enforce orders for such maintenance are similarly personal to the bankrupt.  Barma J came to the conclusion in the case that whilst the right to receive maintenance pursuant to an order made under the Ordinance might be categorized as a thing in action that is enforceable by court proceedings, such right is personal in nature and does not form part of the bankrupt’s estate.

20.  In determining the rights vested in Chan, if any, on the date of her death, the nature of the proceedings she issued under the Ordinance and the provisions of the Ordinance should be considered.

21.  Section 3 of the Ordinance provides that where a person dies, and is survived by any of the persons set out in section 3 (1) (b) of the Ordinance, that person “may apply to the court for an order under section 4”, on the ground that the disposition of the deceased’s estate effected by his will or the law relating to intestacy is not such as to make reasonable financial provision for the applicant.  “Reasonable financial provision” is defined in section 3 (2) of the Ordinance.

22.  Under section 4, the court “may, if it is satisfied that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant” (emphasis added), make orders for periodical payments or other lump sum or property transfer orders for the applicant.

23.  The persons who are entitled to apply are exhaustively defined in section 3 (1).  Moreover, under the express provisions of section 3 (1) (b), the applicant must have survived the deceased.

24.  Sections 4 and 5 of the Ordinance make it clear that even if the applicant can establish that he or she falls within one of the categories of persons set out in section 3 (1) (b), the court still retains a discretion whether or not to exercise its powers to make one or more of the orders which it may make under section 4 (1).

25.  Having first established the right to apply under section 3 (1), the applicant must then satisfy the court under section 4(1) that the disposition of the deceased’s estate is not such as to make reasonable financial provision for the applicant.  The case of Re Coventry (deceased) [1980] Ch 461 makes it clear that this involves an evaluated judgment by the court based on objective considerations. 

26.  In determining whether the disposition of the deceased’s estate is such as to make reasonable financial provision for the applicant, section 5(1) of the Ordinance requires the court to have regard to the matters set out in subsections (1) (a) to (g).  These matters include the financial resources and needs of the applicant and of the beneficiaries of the estate, the size and nature of the net estate of the deceased, the conduct of the applicant or any other person, and any other matter which in the circumstances of the case the court may consider relevant.  The same matters have to be considered by the court if it considers that reasonable financial provision has not been made for the applicant, and goes on to determine whether, and in what manner, it shall exercise its powers to make the orders the court is empowered to make under section 4.

27.  Under section 5 (7), the court has to take into account the facts as known to the court at the date of the hearing of the application.

28.  Considering the provisions of sections 3, 4 and 5 of the Ordinance, it seems clear that a person who satisfies one of the definitions in section 3 (1) (b) (i) to (ix) only establishes the locus standi to apply for an order under section 4.  Such person does not have any statutory right or enforceable claim to any relief or order which the court may, in its discretion, make under section 4 (1).  The court may consider that the disposition of the deceased’s estate has already made reasonable financial provision for the applicant.  Even if the court is satisfied that reasonable financial provision has not been made for the applicant, after considering all the relevant matters set out in section 5 (1) (a) to (g), the court may not make any order on the application, because (for example) the testate or intestate beneficiaries have stronger claims, or the size and nature of the net estate does not warrant the making of the order sought by the applicant.  There is no right to an order for provision under section 4.

29.  At most, what Chan had at the time when she issued these proceedings and prior to her death was the right to make a claim, or locus standi, under section 3 of the Ordinance.  There was no “enforceable right”, at the time of her death, to any relief from Lam’s estate, or to any of the orders for reasonable provision which the court can make under section 4 of the Ordinance, prior to her dependence and case for maintenance having been established to the satisfaction of the court, and prior to the exercise of the court’s discretion having regard to the relevant factors set out in section 5 of the Ordinance, and as known at the date of the hearing of the Application. 

30.  Even on the description of a “cause of action” as used in Letang v Cooper (which is relied upon by Leading Counsel), I am not satisfied that the proof of the existence of the factual situation of Chan’s dependence on Lam by virtue of her having been maintained wholly or substantially by Lam immediately before his death would have “entitled” her to relief under section 4 the Ordinance.  I am not satisfied that it can be argued that there was any enforceable right or vested interest in Chan at the date of her death, which can be said to constitute a cause of action which can survive for the benefit of her estate under section 20 of LARCO.

31.  Leading Counsel for Chan argued that on a striking out application, the court should not decide difficult questions of law.  In the light of the authorities cited to me at the hearing, I cannot see any difficult or emergent legal principle at stake, as was present in the case of Tadjudin v Bank of America National Association [2010] 3 HKLRD 417, to justify any further argument. 

32.  Having carefully considered the matter, I agree that the personal representative’s application for a carry on order is obviously unarguable, and impossible to succeed.  I am satisfied that Chan’s claim for financial provision under the Ordinance discloses no reasonable cause of action upon her death, and should be struck out.  It follows that the other outstanding application made by Chan’s estate, for time to file evidence, should be dismissed with costs.   Such costs order includes the costs of the hearing on 22 June 2012.

33.  I will further make an order nisi that the costs of the action and of the application to strike out should be paid by Chan’s estate to the 2^nd defendants, with certificate for one counsel, to be taxed if not agreed.  The costs orders made include the costs of the hearing on 22 June 2012, which were reserved.  I further give liberty to the parties to apply for arguments to be made on the orders for costs reserved prior to 22 June 2012.