HO YIU SUM v. HO YIU LEUNG KENNY

HCAP 20/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 20 OF 2015

_______________

___________________

D E C I S I O N
___________________

INTRODUCTION

1. I have before me a summons (“the Summons”) issued by the defendant on 14 September 2015 seeking an order that the defendant solely or jointly with his son, Ho Chun Ho Jason, be appointed administrator or joint and several administrators of the estate of the Deceased pendente lite.

2. At the hearing this morning, Mr Enzo Chow (for the defendant) applied for leave to withdraw the Summons.  Mr Chow also submitted that that the defendant should have the costs of the Summons, alternatively costs should be in the cause of the action. Having heard the parties, I granted leave to the defendant to withdraw the Summons, with costs to the plaintiff.  I indicated that I would give reasons in writing for my decision on costs, which I now do.

3. The basis of Mr Chow’s application on costs, as I understand it, is that there were good grounds for making the application for the appointment of administrator(s) pendente lite at the time of the taking out of the Summons on 14 September 2015, but circumstances have since changed such that the defendant has decided not to pursue the application anymore.

4. In order to deal Mr Chow’s application on costs, it would be necessary for me to form a view on the merits of the Summons, and consider the changes in circumstances relied upon by Mr Chow since the date of the taking out of the Summons.

5. I should mention at the outset that the parties have raised numerous factual disputes and allegations against each other in their pleadings and affirmations filed in relation to the Summons.  It is plainly not possible for the court to resolve all such disputes and allegations on affidavit evidence alone.  Neither would it be appropriate, or necessary, for the court to do so for the purpose of dealing with the question of costs of the Summons.  In this decision, I shall refer to, and focus on, only those facts and matters which are essential for my decision on costs.

Background facts

6. The Deceased, who passed away in Hong Kong on 26 July 2014 at the age of 89, had 5 children, including the plaintiff (being the eldest son) and the defendant (being the youngest son).

7. The Deceased was the registered owner of a property known as Flat G, 27^th Floor, Tower 1, Tuen Mun Town Plaza, No 3, Tune Lung Street, Tuen Mun, New Territories (“the Property”).  According to an affidavit sworn by the plaintiff on 27 January 2015 (“the Affidavit”) in support of his application for a grant of probate of the will of the Deceased dated 14 July 2012 (“the Will”), the entire estate of the Deceased consists of the Property.  Further, according to a document entitled “Hang Seng e-Valuation”, the Property had a value of HK$3,960,000 as at 10 September 2015.

8. According to the plaintiff:-

(1) On 14 July 2012, the Deceased executed the Will at the Tuen Mun Office of Messrs Yip, Tse & Tang in the presence of two witnesses, namely, Chan Kar Lam and Chan Kar Wai.  The plaintiff is named as the sole executor of the Will.

(2) On 13 May 2013, the Deceased executed a general power of attorney (“the Power of Attorney”) appointing the plaintiff as her attorney in accordance with section 7 of the Powers of Attorney Ordinance (Cap 31).

(3) On 20 May 2014, the Deceased entered into a preliminary sale and purchase agreement (“the Preliminary Sale and Purchase Agreement”) for the sale of the Property to Lee Wing Sze (“Lee”) at the price of HK$2,700,000, of which HK$135,000 was paid as initial deposit upon the signing of the PSPA, HK$135,000 was to be paid as further deposit on or before 30 May 2014, and the balance of the purchase price in the sum of HK$2,430,000 was to be paid upon completion of the sale and purchase on or before 31 July 2014.

(4) On 30 May 2014, the Deceased entered into a formal sale and purchase agreement (“the Formal Sale and Purchase Agreement”) for the sale of the Property to Lee, whereupon the further deposit of HK$135,000 was paid by Lee to the Deceased.

(5) The Deceased passed away on 26 July 2014, and the sale of the Property to Lee has not yet been completed up to the date hereof.

(6) On 4 September 2014, Lee entered a caveat, Caveat No HCCA003871/14 (“Lee’s Caveat”), against the sealing of any grant in respect of the estate of the Deceased.

(7) On 30 January 2015, the plaintiff applied for a grant of probate of the Will under HCAG001487/2015.

(8) On 23 February 2015, the defendant entered a caveat (Caveat No HCCA000915/15) against the sealing of any grant in respect of the estate of the Deceased.

(9) No further caveat was entered by Lee after the expiry of the effective period of 6 months of Lee’s Caveat.

9. On 19 June 2015, the plaintiff commenced the present action claiming for probate of the Will in solemn form.

10. In the defence and counterclaim filed by the defendant on 12 September 2015, the defendant disputes the validity of the Will on (inter alia) the following grounds, namely, that:-

(1) at the time of execution of the Will, the Deceased did not know and approve of the contents thereof;

(2) the Deceased executed the Will under the undue influence of the plaintiff; and/or

(3) at the time of execution of the Will, the Deceased was not of sound mind, memory and understanding.

11. The defendant also disputes the validity of the Power of Attorney, the Preliminary Sale and Purchase Agreement and the Formal Sale and Purchase Agreement on similar grounds.

12. By his counterclaim, the defendant seeks the court’s pronouncement against the validity of the Will, and a grant of letters of administration of the estate of the Deceased to him.

13. As earlier mentioned, the defendant took out the present summons on 14 September 2015.

Applicable principles

14. By section 40(1) of the Probate and Administration Ordinance (Cap 10), where any legal proceedings touching the validity of the will of a deceased person, or for obtaining, recalling, or revoking any grant are pending the court may, subject to section 25 (which is not relevant for the present purpose), appoint an administrator of the estate of the deceased.

15. It is well established that the court would only appoint administrators pendente lite when it is “necessary” or “expedient” to do so: see Hung Jin Mui v Tang Chui Yuk Angela, HCAP 4/1997 (11 February 1998), at paragraph 10 per Le Pichon J (as she then was):-

“ The leading textbooks on the subject have little to say. Some refer to necessity, others to expediency. In my judgment, whether one uses the term ‘necessity’ or ‘expediency’, I do not think that the court would make an order without regard to or wholly divorced from the actual circumstances of the case, namely the assets comprised in the estate and whether they warrant the appointment of an administrator pendente lite. It is apparent from a proper reading of the passage quoted from Bellew v. Bellew[1] that an appointment is not an automatic consequence of a bona fide suit pending, regardless of the condition or nature of the estate; rather such an appointment would be made by reference to and if warranted by the particular facts. It follows that the nature of the assets comprised in this estate is of critical importance.”

16. In Re Yien Chi Ren [2009] 5 HKLRD 413, Deputy High Court Judge Horace Wong SC, after referring to the aforesaid decision in Hung Jin Mui, stated the following at paragraph 16:-

“ Obviously the actual circumstances of each case vary—in some cases the principal concern may be that pending resolution of the probate dispute, it is necessary to protect the estate by collecting, managing or safeguarding the assets; in other cases there may be other concerns, for example, the necessity of taking legal action against third parties in order to protect the estate while the probate dispute awaits its resolution.”

17. In other words, when deciding whether to appoint administrators pendente lite, the court ought to have regard to the nature of the assets comprised in this estate and consider, amongst other things, whether the appointment of administrators pendente lite is required for the protection of the estate by collecting, managing or safeguarding those assets, or by enabling legal action to be taken against third parties while the probate dispute awaits its resolution.

The present case

18. In his supporting affirmation (ie the 2^nd affirmation filed on 12 September 2015) for the appointment of administrators pendente lite, the defendant relied on 4 matters, namely:-

(1) funeral and burial services of the Deceased;

(2) the sale and purchase of the Property;

(3) truthfulness of the information contained in the Affidavit; and

(4) obtaining of the Deceased’s medical reports from public hospitals.

19. However, in his skeleton submissions, Mr Chow relies upon only two matters in support of the application, namely:-

(1) the alleged concealment of the whereabouts of the sale proceeds of the Property; and

(2) the suspicious circumstances leading to the making of the Power of Attorney, the Preliminary Sale and Purchase Agreement, the Formal Sale and Purchase Agreement and the Will.

See paragraphs 19 and 20 of the skeleton submissions of Mr Chow dated 31 December 2015.

20. In respect of the matter referred to in paragraph 19(1) above, the defendant’s complaint is that the plaintiff concealed and/or failed to account for the whereabouts of the initial and further deposits in the total amount of HK$270,000 paid by Lee for the purchase of the Property under the Preliminary Sale and Purchase Agreement and the Formal Sale and Purchase Agreement.  The defendant says that the said sum of HK$270,000, or such part thereof as was still remaining, belonged to the estate of the Deceased and ought to have been, but was not, disclosed in the Affidavit.  The defendant also says that the plaintiff has failed to properly explain the repeated withdrawals, in the total sum of HK$10,000 per day (save that the last withdrawal on 21 July 2014 was for $5,000 only), from the Deceased’s bank account at Bank of China from 8 to 21 July 2014 after the deposit of HK$135,000 into the Deceased’s account on 30 June 2014.

21. The plaintiff’s explanation regarding the whereabouts and use of the said sum of HK$270,000 appears in his 2^nd affidavit and in a letter dated 18 December 2015 from his solicitors (Messrs Kwok, Ng & Chan) to the defendant’s solicitors (Messrs Alfred Lam, Keung & Ko).  Attached to the said letter is a table setting out the receipt of the initial and further deposits in the total sum of HK$270,000 and a further sum of HK$39,206 (representing the normal disability allowance paid by the social welfare department to the Deceased during the period from 6 December 2013 to 31 May 2014), and how those monies were used.  In summary, the plaintiff says that the total sum of HK$109,331 was used for the payment of expenses in relation to the Deceased’s move to an elderly home, the elderly home’s fees, hospital fee, tonic food for the Deceased, and outstanding management fees for the Property, with the balance of HK$149,875[2] being kept by the plaintiff.  Mr Raymond Tsui (for the plaintiff) argues that the plaintiff is entitled to keep this sum of HK$149,875 on the basis that it was an inter vivos gift by the Deceased to the plaintiff’s son as “educational expenses” (see paragraph 8 of Mr Tsui’s skeleton submissions dated 4 January 2016).  The evidence regarding this alleged inter vivos gift is scanty (see paragraph 36 of the plaintiff’s 2^nd affidavit).  There is, in my view, clearly a triable issue on whether the plaintiff is entitled to keep the said sum of HK$149,875.

22. In his skeleton submissions, at paragraph 20, Mr Chow argues that administrators pendente lite should be appointed “to protect the Deceased’s estate … unless [the plaintiff pays] the HK$149,875.00 into Court pending the outcome of this Action.”  It does not seem to me, however, that the appointment of administrators pendente lite would achieve any useful purpose in so far as the sum of HK$149,875.00 is concerned.  In order to collect this sum of money allegedly belonging to the estate of the Deceased, the administrators would have to commence another legal action against the plaintiff.  Having regard to the relatively modest amount at stake, I do not see that there would be any realistic prospect of the court sanctioning such legal proceedings to be commenced prior to the resolution of the present probate action.  In any event, on the defendant’s case that the Deceased died intestate, the plaintiff, as one of the children of the Deceased, would be entitled to share in the estate of the Deceased, and the plaintiff’s share would, on the materials presently before the court, have a value of more than HK$149,875.00.  There is thus no urgency for the estate of the Deceased to pursue any claim against the plaintiff for the recovery of the said sum of HK$149,875.00.

23. In respect of the matter referred to in paragraph 19(2) above, the circumstances relating to the making of the Power of Attorney, the Preliminary Sale and Purchase Agreement, the Formal Sale and Purchase Agreement and the Will are obviously matters for the trial.  In any event, the fact that the Power of Attorney, the Preliminary Sale and Purchase Agreement, the Formal Sale and Purchase Agreement and the Will were executed by the Deceased under suspicious circumstances (as alleged by the defendant) cannot provide any good or sufficient basis for the appointment of administrators pendente lite.

24. The particular matter which Mr Chow says justifies the application for the appointment of administrators pendente lite at the time of the taking out of the Summons was the fact that, although the Deceased passed away 26 July 2014, her funeral and burial services could not take place because of disagreement amongst the children of the Deceased.  The defendant blames the plaintiff for his uncooperative attitude and conduct for the impasse.  It is not necessary to set out in this decision the defendant’s allegations, which are denied by the plaintiff.  It is not, in any event, possible for the court to resolve the disputes on affidavit evidence alone.

25. As a matter of fact, the funeral of the Deceased took place recently on 29 November 2015 and the body of the Deceased was cremated on the next day.  These events took place after the taking out of the Summons by the defendant on 14 September 2015 and are relied upon by Mr Chow as constituting relevant changes in circumstances.  The delay in arranging for the funeral and burial services of the Deceased is, on any view of the matter, extraordinary and disrespectful to the Deceased.  However, whatever may be the rights and wrongs of the parties, I am unable to see how those matters can justify an application for the appointment of administrators pendente lite. There have, regrettably, been previous instances in this jurisdiction where a deceased person’s spouse or children could not agree on the funeral and burial services of the deceased and the dispute had to be resolved by an application to the court and was so resolved without any appointment of administrators pendente lite: see eg Re Estate of Lu Han Lung [2010] 3 HKLRD 651.  Generally speaking, such disputes are brought before the court on an urgent basis (unlike the present application which was made more than 13 months after the date of death of the Deceased), and the court would do its best to resolve the disputes expeditiously.

26. Finally, in relation to the Deceased’s medical reports (referred to in paragraph 18(4) above), it is clear from the plaintiff’s 2^nd affidavit filed on 15 October 2015 that he would consent to the obtaining of the Deceased’s medical reports from public hospitals, while pointing out that no relevant request had previously been made by the defendant for his consent for obtaining such reports.  In any event, an application for third party discovery can be made to obtain the relevant medical reports from public hospitals.  Again, I do not see that this matter can justify the application for the appointment of administrators pendente lite.

Conclusion

27. In all, I do not consider that the Summons was well founded in the first place, and I would have dismissed it but for the defendant’s last minute application to withdraw the same.

28. As announced at the hearing, the defendant shall pay the costs of the Summons (including the costs of the hearing) to the plaintiff to be taxed if not agreed.  I should mention that I was minded to summarily assess the plaintiff’s costs at the hearing.  However, Mr Tsui informed me that the plaintiff was not prepared to proceed with summary assessment at the hearing.  I take this opportunity to remind practitioners of Practice Directions 14.3 relating to “costs”.  In particular:-

“ 7. A party who wishes to seek summary assessment of costs should prepare a statement of costs which should, as far as possible, be in the format in Appendix A. This statement should be signed by the party acting in person or his solicitor.

  8. Subject to other Practice Directions, the statement of costs should be lodged and served on any party against whom summary assessment is sought together with the skeleton argument for the substantive application.” [underlying added]

29. In view of the plaintiff’s failure to comply with the aforesaid provisions in Practice Directions 14.3, I was not prepared to deal with summary assessment on paper, and ordered that the plaintiff’s costs were to be taxed if not agreed.

30. The defendant’s own costs are to be taxed in accordance with legal aid regulations.

31. Lastly, I should add that, even on Mr Chow’s submissions, the defendant ought to have applied to withdraw the Summons shortly after the carrying out of the funeral and burial services of the Deceased or, at the latest, after receipt of Messrs Kwok, Ng & Chan’s aforesaid letter dated 18 December 2015.  Had this been done, the costs of preparing for, as well as the costs of, the hearing today would or might have been saved.  I shall leave this matter to be further considered by the Director of Legal Aid and the taxing matter in the legal aid taxation, and direct that a copy of this decision be sent to the Director of Legal Aid.