MAK NGUN TAI AND OTHERS v. FUNG MING IP AND OTHERS

HCAP 37/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO 37 OF 2015

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DECISION

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THIS ACTION

1. This probate action concerns the estate (“Estate”) of the late Madam Lo Siu Fung (“Deceased”) who died on 18 September 2014, leaving an English will dated 7 October 2013 (“Will”) (by which the Deceased named Fung Ming Ip, the 1^st defendant, as the sole executor and beneficiary of the Estate) and just the following 2 assets under her name:

(1)  a credit balance of HK$17,797 in a savings account with the Bank of China (“BOC Balance”); and

(2)  Flat B, 2/F and Car Parking Space A69 on Carpark Floor A, Block 1, Phoenix Court, 39 Kennedy Road, Hong Kong (“Phoenix Court Flat”) subject to a Mortgage dated 1 November 2013.

2. In particular, by this action, the plaintiffs dispute the validity of:

(1)  the Will; and

(2)  the inter vivos transactions by which all the properties held solely by the Deceased (except the BOC Balance and the Phoenix Court Flat) had been disposed of within the 3 years preceding the Deceased’s death.

THE APPLICATIONS BEFORE THE COURT

3. At this stage, before the court are:

(1)  an application by Summons dated 23 December 2015 by the plaintiffs for the grant of letters of administration pendente lite over the Estate (“APL Application”) pursuant to s 40 of the Probate and Administration Ordinance (Cap 10) (“PAO”);

(2)  another application also by Summons dated 23 December 2015 by the plaintiffs for leave to join the Official Administrator (“OA”)[1] as the 3^rd defendant[2] and for directions to the OA to take various steps for the preservation of the Estate pending the grant of letters of administration pendente lite (“OA Application”) pursuant to ss 9 and 10 of the PAO and Order 15, rule 4(1) of the Rules of the High Court; and

(3)  an application by Summons dated 24 August 2016 by the OA to strike out the Statement of Claim as against the OA, in particular, paragraphs 1 and 44 to 56 thereof (“Strikeout Application”).

RELEVANT BACKGROUND

4. The circumstances giving rise to this action and the said applications now before the court can be outlined as follows.

5. The Deceased and her husband, Mr Mak Kan Chiu who had predeceased the Deceased in 1996, had 5 daughters in the following order of seniority:

(1)  Mak Ngun Tai, the 1^st plaintiff;

(2)  Mak Ngan Lai, the 2^nd defendant;

(3)  Mak Lai Ping, the 2^nd plaintiff;

(4)  Mak Lai Wun who predeceased the Deceased in 1994; and

(5)  Mak Mei Wa, the 3^rd plaintiff.

6. The Deceased was indisputably a woman of means prior to September 2011.

7. More particularly, she had substantial savings, mostly fixed deposits, to the tune of HK$30 million according to the plaintiffs or HK$20 million according to the 1^st defendant.

8. She also owned the following real properties which were all unencumbered:

(1)  Unit A, 6/F, Kenny Court, 22–28 Kennedy Street, Hong Kong in her sole name;

(2)  5/F including the rooftop, 44 Johnston Road, Wanchai, Hong Kong in her sole name;

(3)  1/F & flat roof, 12 Gage Street, Hong Kong in her sole name;

(4)  the Phoenix Court Flat in her sole name;

(5)  11/F, 113 Hennessy Road, Wanchai, Hong Kong with the 1^st plaintiff as joint tenants; and

(6)  Flat D, 9/F, 477 Hennessy Road, Wanchai with the 3^rd plaintiff as joint tenants.

9. With the exception of 11/F, 113 Hennessy Road which the Deceased had used as her own residence until sometime in 2011, these properties were let to provide rental income to the Deceased.

10. The plaintiffs describe the Deceased as being of a distrustful nature and as being frugal and very careful with her money, a miser even, despite her wealth.

11. Since the death of her husband in 1996, the Deceased had lived on her own at 11/F, 113 Hennessy Road.  It is the plaintiffs’ case that they and the Deceased’s younger sister, Madam Lo Kam Fung, maintained regular contacts with the Deceased while she was living in Wanchai. And due to her age and illiteracy (which is disputed by the 1^st defendant who says that she should be able to recognise a lot of Chinese characters), the Deceased had for a long time relied on the 1^st plaintiff and the 2^nd plaintiff’s husband, Samuel Mak, to assist her in the management of her deposits and the tenancies of her properties including rent collection.

12. In 2011, the Deceased’s eyesight deteriorated badly due to cataract but initially refused to seek treatment.  Eventually, on 27 September 2011, through the persuasion and arrangement of the 2^nd defendant who was enlisted by the plaintiffs to try to change the Deceased’s mind, the Deceased underwent a bilateral eye cataract extraction (“Operation”) by Dr Tso Mun Yee Elisa at St Teresa’s Hospital.  It is noteworthy that Dr Tso saw fit to arrange for Dr Chen Yuk Lun Ronald, a psychiatrist, to assess the Deceased’s mental capacity prior to the Operation on 21 September 2011 and that Dr Chen found the Deceasedto be mentally unfit to give consent to the Operation (which was eventually provided by the 2^nd defendant). More specifically, Dr Chen was of the opinion that the Deceased was suffering from obsessive compulsive disorder with marked anxiety symptoms as well as cognitive impairment.

13. Although there is disagreement as to whether the Deceased moved out of 11/F, 113 Hennessy Road before the Operation according to the 1^st defendant or thereafter according to the plaintiffs and the circumstances leading to the Deceased’s move, there is no dispute that the Deceased moved to live with the 2^nd defendant and her family at their rented village house in Kai Leng, Fanling, New Territories sometime during 2011.

14. And while the 1^st plaintiff and the 1^st defendant have given different reasons for the subsequent changes in the relationships between mother and daughters, it appears to be common ground that, after the Deceased’s said move, the contacts between the plaintiffs and the Deceasedwhether in person or by telephone had greatly reduced while the Deceased and the 2^nd defendant and her family had grown closer than before.

15. It was also after the Deceased’s move to Kai Leng that she became friendly with the 1^st defendant.

16. Regarding the 1^st defendant, the plaintiffs describe him as a good friend of the 2^nd defendant.  However, according to the 1^st defendant himself, he became acquainted with the 1^st plaintiff and the 2^nd defendant through the introduction of a mutual friend on the same occasion in 1995, and was subsequently introduced by them to their other sisters, the 2^nd and 3^rd plaintiffs.  He initially saw more of the 1^st and 3^rd plaintiffs as they were all keen on singing Cantonese opera songs and the 2^nd defendant was not living in Hong Kong. From 2003, he was the tenant of a village house in Yuen Long owned by the 1^st plaintiff until 2009 when the 1^st plaintiff sold that property.  Thereafter, the 1^st and 2^nd defendants became neighbours when the 1^st defendant moved to Kai Leng.

17. As for his relationship with the Deceased, the 1^st defendant claims to have been introduced by the 2^nd defendant to the Deceased when he met them by chance at a restaurant on one occasion, the date of which he has not identified.  Thereafter, he would see the Deceased socially for just about 2 or 3 times a year.  After the Deceased’s move to Kai Leng in about April/May 2011, the 1^st defendant who lived in the same village frequently paid visits to the Deceased or accompanied her when she went out and about and they became well acquainted.  Starting from as early as September 2011, i.e. round about the time of the Operation, the Deceased appointed the 1^st defendant to help her handle the tenancies of her properties in place of the 2^nd plaintiff’s said husband.  The 1^st defendant claims that he and the Deceased grew so close that in about March/April 2012, after repeated suggestions by the Deceased who had no son, they went through a ceremony at which the Deceased adopted the 1^st defendant as her godson at a dinner which was also attended by, inter alia, the 2^nd defendant and her family (but not any of the plaintiffs or members of their families).  In November 2012, upon the expiry of the tenancy of his then rented accommodation in Kai Leng, the Deceased and the 2^nd defendant’s family invited him to move in with them, which invitation the 1^st defendant accepted.  Then, in May 2013, the Deceased, the 1^st defendant, the 2^nd defendant and her family all moved into House 31[3], Belair Villa, 9 Yu Tai Road, Fanling (“Belair Villa House”), a property that had been acquired in the joint names of the Deceased and Koon Jamis (“Jamis”), the son of the 2^nd defendant andher husband, Koon Yau Kuen (“Koon”), but paid for entirely by the Deceased (see further paragraphs 24 to 27 below).

18. The Deceased passed away on 18 September 2014 at the North District Hospital at the age of 85.  According to the 1^st plaintiff, they were not notified of the Deceased’s death or funeral.  The 3^rd plaintiff only came upon such news in October 2014 through a casual chat with one of the 2^nd defendant’s daughters on WhatsApp.

19. As the Deceased’s daughters, the plaintiffs and the 2^nd defendant would have been entitled to equal shares in the Estate under the Intestate Estates Ordinance (Cap 73) had the Deceased died intestate.

20. However, the Deceased left the Will, appointing the 1^st defendant as the sole executor and beneficiary of the Estate.  The existence and provisions of the Will came as an unpleasant surprise to the plaintiffs.  From their perspective, it is inexplicable why the Deceased would give her entire estate to the 1^st defendant, a person whom she barely knew before she moved to live with the 2^nd defendant in 2011, to the exclusion of all her daughters.  They dispute the validity of the Will.  Although the Will was on its face prepared by Messrs Ford, Kwan & Co (“FKC”) and executed by the Deceased in the presence of a solicitor and a clerk of that firm after the document had been interpreted to the Deceased in Cantonese, the plaintiffs accuse the 1^st and 2^nd defendants (and/or other parties to be identified) of procuring the Will when the Deceased had no testamentary capacity or real knowledge or understanding of the contents of the Will or when she was acting under their undue influence.  A caveat against a grant of probate or administration in respect of the Estate was entered on behalf of the 2^nd and 3^rd plaintiffs under HCCA 2934/2015.

21. To compound the plaintiffs’ suspicion, the Deceased had in the 3 years preceding her death divested herself of all her solely owned assets except the BOC Balance and the mortgaged Phoenix Court Flat.  The particulars that the plaintiffs are able at this stage to give are set out in paragraphs 22 to 31 below.

22. First, the savings that the Deceased had held before September 2011, whether HK$30 million or HK$20 million, had disappeared except for the meagre BOC Balance, which means that there is also no trace of the further rental income that the Deceased should have received from September 2011.[4]

23. With regard to the savings held in fixed deposits, the 1^st defendant simply says, without giving any particulars, that the Deceased had closed the accounts upon the maturity of the deposits and spent all the money in her lifetime.

24. Second, on 19 January 2012, the Deceased and Jamis entered into an agreement to purchase the Belair Villa House as tenants‑in‑commonin equal shares.  By the time this purchase was completed by an Assignment dated 3 September 2012, the tenancy‑in‑common was converted into a joint tenancy, thereby leaving Jamis the sole registered owner of the Belair Villa House by virtue of survivorship after the Deceased’s death.

25. Further, although the purchase of the Belair Villa House was initially completed by funds provided entirely by the Deceased without the need for any loan financing, the Deceased and Jamis mortgaged the Belair Villa House to Hang Seng Bank just about two months later.

26. According to the plaintiffs, the Deceased had told the 2^nd plaintiff in a telephone conversation sometime between March and June 2012 that she had bought a property with Jamis with each contributing and getting a half share and that she had already paid up her share.

27. The 1^st defendant has also deposed that the Deceased and Jamis were originally going to hold the Belair Villa House as equal tenants‑in‑common on the understanding that they would each contribute 50% of the purchase price, although the Deceased would initially put up Jamis’ half share for which Jamis could reimburse her later.  However, according to the 1^st defendant, the Deceased changed her mind and gave instructions to Jamis to have the title converted into a joint tenancy and not to repay her his half share of the purchase price, after the plaintiffs picked a quarrel with her about this acquisition.  The 1^st defendant has however not dealt with the said mortgage of the Belair Villa House.

28. Third, the equity value of the hitherto unencumbered Phoenix Court Flat had been diminished by the said mortgage dated 1 November 2013 to secure the borrowings of Koon, the 2^nd defendant’s husband, and the Deceased from one Hang Lee Finance Company Limited.  Although the Deceased was formally one of the borrowers, there is no trace of any drawings by the Deceased under the facilities secured by the said mortgage.  According to the 1^st defendant, the Deceased executed this mortgage to provide Koon with “turn‑around cash for his wine business”.

29. Fourth, the remaining 3 of the abovementioned 4 properties that were held in the Deceased’s sole name had been sold in 2013 and 2014 for a total consideration of HK$16,430,000 as follows:

(1)  Unit A, 6/F, Kenny Court, 22‑28 Kennedy Street for HK$6,380,000, which sale was completed by an Assignment dated 16 December 2013;

(2)  5/F including the rooftop, 44 Johnston Road for HK$4,100,000, which sale was completed by an Assignment dated 30 April 2014; and

(3)  1/F & flat roof, 12 Gage Street for HK$5,950,000, which sale was completed by an Assignment dated 5 September 2014.

According to the 1^st defendant, the conveyancing of all these sales was handled by FKC.  The Deceased personally executed all the agreements and assignments except for the assignment of 1/F & flat roof, 12 Gage Street which was signed by the 1^st defendant on behalf of the Deceased pursuant to a power of attorney given to him by the Deceased as the Deceased had by then already fallen ill.

30. As stated above, none of these 3 properties was encumbered.  Hence, the Deceased should have realised HK$16,430,000, subject to some deductions for the costs and expenses incidental to the sales.  However, none of such proceeds of sale had remained under the Deceased’s name by the time of her death.

31. The sale of 1/F & flat roof, 12 Gage Street is particularly noteworthy in that:

(1)  It was not completed until 5 September 2014, which was just 13 days before the Deceased’s death.

(2)  One would expect the purchaser to pay and the Deceased to receive on such completion date the balance of the purchase price, which would normally be 90% if one goes by the usual Hong Kong conveyancing practice.

(3)  As said earlier, the assignment was executed by the 1^st defendant on behalf of the Deceased pursuant to a power of attorney as the Deceased had by then already fallen ill.

(4)  The question as to what the Deceased, a sick lady in her eighties, had done with over HK$5 million within less than 2 weeks before her death is unanswered.

32. By this action, which was commenced by a writ of summons issued on 21 December 2015, the plaintiffs ask the court to:

(1)  pronounce against the Will and declare that the Deceased died intestate; and

(2)  direct the OA to take various steps to preserve the Estate pending the appointment of an administrator pendente lite including the conduct of inquiries into the financial, care and medical records of the Deceased and the commencement of action (jointly with the 1^st plaintiff as the intended administratrix pendent lite of the Estate) against the 1^st and 2^nd defendants, Koon and Jamis, whom the plaintiffs have implicated, to recover the assets disposed of by the Deceased before her death or their values.

33. For the latter purpose, the plaintiffs have attached to the Statement of Claim 2 schedules, one setting out the documents and information concerning the Deceased and the Estate that they desire the OA to obtain and the other containing a draft Statement of Claim to be issued by the OA and the 1^st plaintiff jointly against the 1^st and 2^nd defendants, Koon and Jamis.

34. The 1^st plaintiff is prepared to undertake to indemnify the OA for his costs and expenses and to put up security for such undertaking in the form of 11/F, 113 Hennessy Road of which she has become the sole owner by virtue of survivorship upon the Deceased’s death, though she reserves the right to seek such costs and expenses from the Estate.

THE APL APPLICATION

Relevant legal principles

35. Section 40 of the PAO empowers the court to appoint an administrator of the estate of a deceased person where any legal proceedings touching the validity of the will of such deceased person, or for obtaining, recalling, or revoking any grant are pending the court.

36. The principles governing the exercise of the power to appoint an administrator pendente lite (or administrator pending suit) are not controversial and can for present purposes be shortly summarised as follows:

(1)  The court does not automatically appoint an administrator pendente lite whenever there is a pending probate dispute.

(2)  The court only appoints an administrator pendente lite when it is necessary or expedient to do so.

(3)  Necessity or expediency has to be assessed with reference to the actual circumstances of the case which obviously vary from case to case so that the situations in which the court would appoint an administrator pendente lite cannot be stated exhaustively.

(4)  Relevant considerations would include the condition of the estate, the nature of the assets comprised in the estate, whether there is a likelihood of dissipation or jeopardy of assets and whether there is a need to collect the “fruits of the estate’.

(5)  An appointment would be necessary or expedient if, for example, it is required to protect the estate by collecting, managing or safeguarding the assets or to enable legal action to be taken against third parties pending the resolution of the probate dispute.

See Hung Jin Mei v Tang Chui Yuk Angela, HCAP 4/1997, unreported, 11 February 1998, per Le Pichon J at [8] – [10]; Re Yien Chi Ren [2009] 5 HKLRD 413, per Deputy High Court Judge Horace Wong SC at [16] – [17]; Ho Yiu Sum v Ho Yiu Leung Kenny, HCAP 20/2015, unreported, 6 January 2016, per Chow J at [14] – [17]; Cheung Ting Kau Vincent v Koo Siu Ying, HCAP 4/2011, unreported, 18 February 2016, per Deputy High Court Judge Kent Yee at [83] – [86]; and Lam Mo Chu Susie v Lam Sik Ying Victor, HCA 1975/2015, unreported, 18 July 2016, per Chow J at [14] – [16].

Appointment necessary or expedient in this case

37. Applying these principles, on the evidence before me, I have come to the view that, pending the determination of the validity of the Will, it is necessary or expedient for an administrator pendente lite to be appointed to inquire and investigate into the inter vivos dispositions of assets made by the Deceased since September 2011.

38. In so concluding, I have not overlooked the 1^st defendant’s stance as the sole beneficiary of the Estate under the Will that insofar as he is concerned:

(1)  There is nothing to investigate, the Deceased being entitled to spend her money anyway she wanted.

(2)  He has no wish to recover any of the assets disposed of by the Deceased before her death.

(3)  Therefore, the costs and expenses that would be occasioned by the appointment of an administrator pendente lite would be wasted if the Will should at the end of the day be upheld.

39. This is obviously not the occasion for the court to resolve the dispute as to the validity of the Will or even assess or weigh either side’s chance of upholding/upsetting the same.

40. However, pending the final determination of the validity of the Will after trial, I cannot neglect the plaintiffs’ interests as potential intestate beneficiaries of the Estate if the Will should be declared invalid.

41. This is particularly so when the plaintiffs are in the first instance prepared to shoulder the costs and expenses that would be occasioned by the appointment of an administrator pendente lite (though, for the avoidance of any misunderstanding, I should make it very clear that this should not and would not be a consideration in the absence of circumstances otherwise justifying an appointment in accordance with the principles set out in paragraph 36 above).

42. In the present case, I refer to the above summary of background.  The plaintiffs have in my view placed before the court sufficient undisputed or indisputable facts and circumstances which, if unexplained (which they are), should alert the court to the risk of financial abuse of the Deceased from September 2011 to the date of her death:

(1)  Although the mental capacity required for the giving of consent to the Operation is different from that required for an inter vivos disposition of one’s assets, the Deceased was certified by a psychiatrist to be suffering from cognitive impairment in as early as September 2011.

(2)  The Deceased had prima facie squandered a fortune of tens of millions within 3 years thereafter.

(3)  Such financial conduct was out of character.

(4)  The disappearance of over HK$5 million (i.e. the balance of purchase price of 1/F & flat roof, 12 Gage Street) within less than 2 weeks before the Deceased’s death when she was apparently already too ill even to personally execute the assignment for such sale is particularly stark.

(5)  It remains a mystery on what the Deceased had spent all that monies.  In this regard, the 1^st defendant’s bare assertion, without any particulars, that the Deceased had spent all her fixed deposits in her lifetime only serves to raise more questions.  And there is still no hint whatsoever of the whereabouts of the proceeds of the said sales or mortgages of the Deceased’s real properties.

(6)  The purchase of the Belair Villa House in 2012 and the Deceased’s trips to Beijing, Guilin and Singapore (even with she paying for everyone who went along), the only items of expenditure that the 1^st defendant refers to in evidence and submissions, would hardly make up the sums.

43. To my mind, the plaintiffs have raised a sufficient case for an inquiry into and examination of the Deceased’s financial conduct from September 2011 to the date of her death with a view to identifying the inter vivos transactions by which the Deceased had disposed of all her properties (except the BOC Balance and the mortgaged Phoenix Court Flat) before her death and verifying whether such transactions were proper and valid or liable to be avoided at the instance of the Deceased during her lifetime and by the Estate after her death.

44. And I do not believe that it is in the interest of the Estate for such inquiry and examination to await the final determination of this action.

(1)  It is impossible to estimate when this action could or would be concluded, with the parties not having progressed beyond the pleading stage.

(2)  The tracing and recovery of assets is always time‑sensitive, especially when considerable efforts are required to establish the full facts.  Given that trails may turn cold and further dissipations may take place with the passage of time, not to mention the running of time under the statute of limitation, actions should be taken sooner rather than later.  I am particularly mindful of the possibility that some of the inter vivos dispositions could have made in as early as September 2011 or shortly thereafter.

45. For these reasons, I think the 1^st defendant is talking at cross purposes and not addressing the real issues by

(1)  confining the Estate to the BOC Balance and the mortgaged Phoenix Court Flat and contending that they are not at all at risk to warrant the appointment of an administrator pendente lite; and

(2)  offering[5] to undertake not to do anything to dissipate or dispose of or charge or diminish the value of the assets of the Estate (meaning the BOC Balance and the mortgaged Phoenix Court Flat).

46. The plaintiffs’ concern, shared by the court, is with the question whether the Deceased might have during her final years been the victim of financial abuse and disposed of her other assets in transactions that are avoidable on grounds such as want of mental capacity or, as contended by the plaintiffs, undue influence.

47. The 1^st defendant’s further undertaking not to dispose of or destroy

(1)  any records of properties, monies and assets which he had obtained from the Deceased; or

(2)  any of the Deceased’s records for her properties, monies and assets which are in his possession

would not help either.

48. First, the 1^st defendant has not disclosed and we do not know if the records that are the subject matter of such proposed undertaking relate to all the dispositions of assets made by the Deceased since September 2011.  Indeed, by his solicitors’ letter dated 5 April 2016 to the plaintiff’s solicitors, the 1^st defendant denies having any relevant documents except for a passbook of an account opened in the name of the Deceased and the 2^nd and 3^rd plaintiffs.

49. Second, the 1^st defendant has refused to disclose and we do not know what properties and monies (if any) he had obtained from the Deceased before her death.  More importantly, he has not offered to undertake not to dissipate or dispose of or charge or diminish the value of the assets that he had acquired from the Deceased during her lifetime.

50. Lastly, the 1^st defendant refers to Practice Direction 20.2 (on “Probate and Administration of Estate Proceedings (other than Applications under the Non‑Contentious Probate Rules (Cap 10A)”) and points out that the plaintiffs have failed to comply with Section C.1 thereof which prescribes the procedural requirements for an application for appointing an administrator pendente lite.  In summary, the application should be made by a summons naming the proposed administrator with all the directions required.  Such summons must be supported by written evidence and accompanied by a draft order.  Written evidence should be in the form of affidavit evidence and state why it is “necessary and expedient for some steps to be taken to preserve or protect some asset of the estate”.  The affidavit evidence should also include, inter alia, details of the proposed administrator and of matters such as security and remuneration.  The applicants must also file the written consent of the proposed administrator to act, and an affidavit as to the proposed administrator’s fitness by a disinterested person.

51. The plaintiffs have indeed not complied with Section C.1 of Practice Direction 20.1, most notably in not setting out all the directions required in the summons dated 23 December 2015 and in not attaching a draft order to such summons.

52. While the court does frown upon a party’s non‑compliance with an applicable Practice Direction, I do not think it would be proportionate or otherwise just in the circumstances of this case to dismiss the APL Application on the ground of the plaintiffs’ failure to adhere to Section C.1 of Practice Direction 20.2.  As it is, the plaintiffs would have to suffer some delay in having the terms of the administrator pendente lite appointment finalised as a result of their neglect in following Section C.1 of Practice Direction 20.2.  See paragraphs 58 and 75 below.

Who should be appointed as administrator pendente lite?

53. As for the nominees for appointment, the plaintiffs put forward:

(1)  the 1^st plaintiff; or

(2)  in the alternative, the 1^st plaintiff and the 1^st defendant jointly; or

(3)  in the further alternative, Mr Billy Ma Wan Yan (“Mr Ma”) of Messrs Hobson & Ma, who has by a letter dated 18 July 2016 indicated his willingness to act as administrator pendente lite of the Estate at an hourly rate of HK$3,800.

54. The 1^st defendant takes issue with the cost of HK$3,800 an hour for the appointment of Mr Ma.  If an administrator pendente lite has to be appointed, he prefers the joint appointment of the 1^st plaintiff and himself, or, in the last resort, only the 1^st plaintiff.

55. I can dismiss the prospect of a joint appointment of the 1^st plaintiff and the 1^st defendant right away:

(1)  First, joint administrators pendente lite have to act jointly.  In view of the allegations and cross‑allegations that have given rise to this action and the APL Application, I think I can be forgiven for not having any confidence that the 1^st plaintiff and the 1^st defendant would be able to work together.  And I most certainly do not want to create a situation where the court might potentially be inundated with applications by the 1^st plaintiff and/or the 1^st defendant to resolve disagreements between them as to what they should or should not do as joint administrators pendente lite of the Estate.

(2)  Second, I am unable to dismiss the 1^st defendant’s potential conflict of interest arising from the possibility that he might have been one of the beneficiaries of the inter vivos dispositions by the Deceased to be investigated, a possibility which the 1^st defendant has done nothing to dispel despite the plaintiffs’ express allegations against him.  However, in order not to pre‑empt the work of the administrator pendente lite, I say no more.

56. As for the 1^st plaintiff:

(1)  While there is no absolute rule against appointing a party to the probate action (even without the consent of all parties), the court would only do so if it is clearly desirable: In Re Griffin [1925] P 38.

(2)  I am afraid I am unimpressed by the 1^st plaintiff as a potential candidate for the appointment.

(3)  Many of the steps that have been taken by the plaintiffs in this action are ill‑advised.  In particular, I refer to the joinder of the OA as the 3^rd defendant, the issuance of the OA Application and the refusal to discontinue the claim against the OA.  See the discussion below on the OA Application and the Strikeout Application.

(4)  I am also alarmed by the plaintiffs’ initial proposal that the OA should be directed to launch an action against the 1^st and 2^nd defendants, Koon and Jamis to recover the assets disposed of by the Deceased before her death or their values even before all the facts relevant to such dispositions have been established.

57. Of all the candidates who have been put forward, I consider Mr Ma, a seasoned practitioner in the field of probate and administration of estates and a person independent of this probate dispute, to be the most suitable.  I do not regard his proposed hourly rate of HK$3,800 unreasonable given Mr Ma’s credentials or excessive for the Estate given the amount potentially at stake.  Nevertheless, I would expect Mr Ma to keep the costs of administration as low as possible under all circumstances.

58. I therefore approve in principle the appointment of Mr Ma as administrator pendente lite of the Estate at HK$3,800 per hour which is to be borne by the plaintiffs in the first instance without prejudice to their right to seek reimbursement out of the Estate eventually, subject to working out the full terms of the order covering the matters of, inter alia, Mr Ma’s detailed rights and powers, the provision or dispensation of security by Mr Ma and administrator’s accounts.

Limits on the grant of administration pendente lite

59. On the question of Mr Ma’s rights and powers, I can at this stage indicate that I am minded to limit his appointment to the representation of the Estate for the purposes of the inquiry and examination along the lines suggested in paragraph 43 above.  Mr Ma should apply to the court for further directions once he has completed such inquiry and examination.

60. For the avoidance of doubt, no legal proceedings should be instituted without the direction of the court.

THE OA APPLICATION AND THE STRIKEOUT APPLICATION

61. By paragraph 5 of the Order made by Mr Justice Lok on 26 January 2016, the OA Application was adjourned sine die with liberty to restore.  By letters dated 3 February and 14 July 2016 from their solicitors to the Department of Justice (“DOJ”), the plaintiffs proposed to the OA that the OA Application be stayed or adjourned pending the determination of the APL Application on the basis that if the plaintiffs succeed in the APL Application, it would be unnecessary for them to get the OA involved in this matter.  By DOJ’s letter dated 4 February and 18 August 2016, the OA insisted upon the dismissal or discontinuance of the plaintiffs’ claim him, failing which he would apply to strike out such claim.

62. At the hearing on 29 August 2016, Mr Albert Yau (with him Mr Bache Sit), Counsel for the plaintiffs, invited me to adjourn the OA Application.

63. The plaintiffs have succeeded in the APL Application.  It is therefore unnecessary for the plaintiffs to proceed with the OA Application.  However, for reasons that will become apparent shortly, I propose to deal with and dispose of such application, together with the Strikeout Application, as a matter of principle.

64. In joining the OA as the 3^rd defendant to this action, the plaintiffs invoke s 9(2) of the PAO:

“In all cases the Official Administrator shall be subject to the immediate control and act under the direction of the court.”

And s 10:

“Where any person dies, whether in Hong Kong or elsewhere, leaving estate in Hong Kong in respect of which he dies intestate, such estate shall vest in the Official Administrator who may, if he thinks fit, receive and take possession of the same until administration is granted in respect thereof.” (emphasis added)

65. The issues raised by the plaintiffs’ claim herein against the OA are:

(1)  whether s 10 applies to vest in the OA the estate of a deceased who has left a will the validity of which is being contested in a probate action; and

(2)  even if so, whether the OA is obliged under s 10 to render assistance of the types sought by the plaintiffs.

Condition of intestacy

66. In Wu Chi Kwong v Estate of Cheng Man Yau [2008] 3 HKLRD 503, the plaintiffs claimed adverse possession of the land of the defendant who had not been seen or heard of since before 1934 and was presumed dead and sought declaration under ss 7(2) and 17 of the Limitation Ordinance (Cap 347).  The Registrar of the High Court was prevented from accepting service on behalf of the defendant as the OA.  While it was accepted that the deceased had died, there was no evidence he died intestate anywhere.  See [4], per Recorder Gerard McCoy SC.

67. I agree with Mr Suen Sze Yick, Senior Government Counsel of the DOJ for the OA, that Wu Chi Kwong is authority that proof of intestacy is necessary before the estate of a deceased person will vest in the OA until the grant of administration thereof under s 10.

68. Although there is no precedent involving the same situation as the present case, the plain language of s 10 exclude its application to the estate of a deceased who has left a will, albeit one the validity of which is being contested in a probate action.  Until a will is found to be invalid, it cannot be proved that the deceased died intestate.

69. This also stands to reason with reference to first principles:

(1)  Where a deceased has left a valid will, his estate will vest in the executor appointed under the will.  There is no scope for the operation of s 10.

(2)  This remains the case notwithstanding that the validity of the will is contested and has to be established after trial in a probate action.

(3)  Where there is a pending suit regarding the validity of a will, the proper way to meet any need for administration in the meantime is for an application for the grant of an administration pendente lite to be made.

70. In the premises, the Estate does not vest in the OA by operation of s 10.

71. In any event, s 10 permits the OA, but only if he thinks fit, to “receive and take possession of” an intestate estate vested in him.[6] So, for example, in In Lo Sui‑Han v The Personal Representative of the Estate of Chan Wah‑Hing, Deceased[1993] HKDCLR 37, the tenant had died intestate, and no letters of administration had been granted to any person so that his estate was vested in the OA under s 10 of the PAO.  District Judge Downey held that where it was known that the contractual tenant was dead, and it transpired that he had not made a will, the contractual tenancy ought to be brought to an end by the landlord by giving notice to quit to the OA before the statutory grounds for possession in s 53(2) of the Landlord and Tenant (Consolidation) Ordinance (Cap 7) could be relied on.

72. While each case turns on its own facts, I am in no doubt whatsoever that the acts that the plaintiffs herein ask the OA to perform, or to lend his name to, all being of a highly contentious nature (including the commencement of hostile litigations), go way beyond the receipt or taking of possession of an estate provided for in s 10.  I do not think it is the intention of s 10 for the OA to be dragged into an adversarial dispute over the administration of an estate pending suit.

73. The reference to and reliance on s 9(2) of the PAO does not assist the plaintiffs at all.  The court cannot exercise its power of control over the OA by directing him to do what he is not obligated to do as a matter of law.

ORDERS

74. I dismiss the OA Application and allow the Strikeout Application.  More particularly, I strike out paragraphs 1 and 44 to 56 of, and Schedules 1 and 2 to, the Statement of Claim.  I also order the plaintiffs to pay the OA his costs of the action including the costs occasioned to him by the OA Application and the Strikeout Application, to be assessed summarily.  The OA should file and serve his statement of costs within 14 days.  The plaintiffs should file and serve their statement of objections (if any) within 14 days thereafter.  The OA should have 7 days to respond to the plaintiffs’ objections (if any).

75. As for the APL Application, I repeat paragraph 58 above and direct the plaintiffs to submit to the court and the 1^st defendant a draft order for the appointment of Mr Ma as administrator pendente lite of the Estate within 14 days from today.  The 1^st defendant shall have 14 days thereafter to file and serve written submissions on such draft order.  Any reply submissions that the plaintiffs may have shall be filed and served within 7 days thereafter.

76. I further direct the plaintiffs to file and serve written submissions on the costs of the APL Application within 14 days from the date hereof.  The 1^st defendant should file and serve his written costs submissions within 14 days thereafter.  The plaintiffs should have 7 days to respond to the 1^st defendant’s submissions.