Chan Shee Kee v. Chan Gary Kee and Another

HCMP 1181/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1181 OF 2017

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BETWEEN

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D E C I S I O N

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INTRODUCTION

1.By an originating summons dated 22 May 2017, the plaintiff seeks:-

(1) a declaration that (i) the Deed of Assent dated 25 March 2013 (“the Assent”) and registered in the Land Registry by Memorial No 13042200560035, and (ii) the Deed of Rectification and Confirmatory Assent dated 14 September 2015 (“the Confirmatory Assent”) and registered in the Land Registry by Memorial No 15091800720029, are void for all purposes; and

(2) an order for the vacation of the registration of the Assent and the Confirmatory Assent from the Land Registry.

BRIEF BACKGROUND

2.By his last will dated 16 November 1993 (“the Will”), Chan Fone (or Fung) Moin (or Moon) (陳逢滿) alias Tong Fung Moon (湯逢滿) alias Hong Fone Moin (湯逢滿), deceased (“the Deceased”) :-

(1) appointed his wife, Chu Yuem Ong (趙豔鶯) alias Chan Yuem Ong (陳豔鶯) (“the Wife”), as the sole executrix and trustee of the Will;

(2) gave the whole of his estate to the Wife upon trust to sell call in and convert the same into money; and

(3) directed the Wife to hold the net proceeds of such sale calling in and conversion and his ready money upon trust (i) to pay all his debts and funeral and testamentary expenses, and (ii) to divide the residue into four equal shares and pay one share thereof to each of the following for his/her own use and enjoyment absolutely:-

(a) the Wife;

(b) the plaintiff;

(c) Chan Leo S (陳兆其) alias Chan Siu Ki (陳兆其) alias Tong Siu Ki (湯兆其) (“Leo Chan”); and

(d) the 1^st defendant,

provided that if any one of the above persons should predecease the Deceased, his or her shares shall accrue to the others living at his death if more than one in equal shares.

3.The Wife passed away on 29 April 2005, the Deceased passed away on 1 June 2011, and Leo Chan passed away on 4 June 2011 in New York.  The 2^nd defendant is the personal representative of Leo Chan appointed by the Surrogate’s Court of the State of New York, Nassau County.

4.Letters of Administration with the Will annexed was granted by the court to the plaintiff on 7 August 2012.

5.As can be seen from the schedule of assets and liabilities attached to the Letters of Administration, the estate of the Deceased comprises, inter alia, two immovable properties, namely:-

(1) all that piece or parcel of ground registered in the Land Registry as The Remaining Portion of New Kowloon Inland Lot No 594 (No 186 Tai Nan Street, Kowloon); and

(2) all those 10 equal undivided 1,597^th parts or shares of and in New Kowloon Inland Lot No 4750 (Flat A on 10^th Floor, Block 1, Chermain Heights, No 9 Eastbourne Road, Kowloon, Hong Kong) (collectively “the Properties”).

6.In view of the fact that the Wife predeceased the Deceased, the three remaining beneficiaries, namely, the plaintiff, the 1^st defendant and Leo Chan became entitled to the entire residuary estate of the Deceased in equal shares.  Consequent upon the death of Leo Chan, his share in the estate of the Deceased has become vested in his personal representative, ie the 2^nd defendant.

7.By the Assent dated 25 March 2013, the plaintiff in his capacity as the “Administrator” of the estate of the Deceased purportedly assented to the vesting of the Properties in himself and the 1^st defendant absolutely as the “Beneficiaries”.  In the Deed of Assent, it was recited that by the Will, the Testator (ie the Deceased) devised and bequeathed the estate to the Beneficiaries as tenants in common in equal shares and the Beneficiaries had requested the Administrator to assent to the vesting of the Properties in them.

8.In his submission on behalf of the plaintiff, Mr Tim Yu said that the disposition of the Properties under the Assent was “wrongful”, in that under the Will and in the events which had happened, there were in fact three persons who were entitled to the estate of the Deceased, namely, the plaintiff, the 1^st defendant and the personal representative of Leo Chan.

9.To rectify this “mistake”, the Confirmatory Assent was executed on 14 September 2015.  The parties to the Confirmation Assent were (i) the plaintiff in his capacity as the “Administrator” of the estate of the Deceased, (ii) the plaintiff and the 1^st defendant as the “Beneficiaries”, and (iii) the estate of Leo Chan as the “Deceased Beneficiary”.  The following provisions in the Confirmatory Assent are relevant for the present purpose:-

(1) “This Deed is made supplemental to the Assent and save and except as are hereby modified and rectified the Assent shall remain in full force and effect” (Clause 1).

(2) “Notwithstanding anything contained to the contrary in the Assent, the Assent shall operate to vest the Properties in the Beneficiaries and the Deceased Beneficiary as tenants in common in equal shares and shall take effect as if this Deed were executed on the date of the Assent to the … intent that the Properties shall with effect from the date of the Assent be vested in the Beneficiaries and the Deceased Beneficiary as tenants in common in equal shares.”

10.Although the estate of Leo Chan was stated to be a party to the Confirmatory Assent, it was executed only by the plaintiff (in his capacity as the Administrator) and by the Plaintiff and the 1^st defendant (in their capacity as the Beneficiaries), but not by anyone on behalf of the estate of Leo Chan.  In fact, the execution page of the Confirmatory Assent did not provide for execution by the estate of Leo Chan.  Mr Yu informed the court that this was because, at the time of execution of the Confirmatory Assent, the plaintiff’s lawyers could not identify or locate the personal representative of Leo Chan.

11.By this action, the plaintiff seeks a declaration that the Assent and the Confirmatory Assent are “void” and other consequential relief.  As confirmed by Ms Yau on their behalf, the defendants do not contest the plaintiff’s application.

DISCUSSION

12.In his skeleton argument, Mr Yu submits that:-

(1) According to the terms of the Will, the estate of the Deceased should have been divided between the plaintiff, the 1^st defendant and the estate of Leo Chan.  This was not done in the Assent and thus the vesting made by the plaintiff therein amounted to a wrongful disposition of the Properties.  It follows that the Assent should be declared void for all purposes (paragraph 14).

(2) Likewise, the Confirmation Assent failed to achieve its intended purpose.  It was stated to be made between three parties, yet only the plaintiff and the 1^st defendant signed and its validity has been in doubt without the signature of the third beneficiary (ie the estate of Leo Chan).  In the circumstances, the Confirmatory Assent should also be held void for all purposes (paragraph 15).

13.On the footing, as submitted by Mr Yu, that the Assent amounted to a wrongful disposition of the Properties by the plaintiff as the Administrator of the estate of the Deceased, it is by no means clear that the Assent is thereby rendered “void”, or has no legal effect whatsoever.  For the present purpose, it is not necessary for me to decide whether the Assent may be voidable or liable to be set aside.

14.In any event, the plaintiff is seeking a declaration from the court.  It is not the court’s normal practice to grant a declaration by consent or in default without a trial.  This is a rule of practice and not an inflexible rule.  The paramount duty of the court is to do the fullest justice to the plaintiff to which he is entitled.  Thus, the court may grant a declaration without a trial where the plaintiff has shown a genuine need for the declaratory relief and the court can properly grant such relief on the merits of the case (see Lai Wai Kuen v Wong Shau Kwong [2004] 4 HKC 528, at paragraph 6 per Lam J; Hong Kong Civil Procedure 2017, paragraph 15/16/2).

15.In the present case, it is, as I see it, well within the parties’ own powers to rectify or rescind the Assent without any court order.  In such circumstances, I do not consider that it would be right for the court to grant the declaration sought in so far as the Assent is concerned.  Mr Yu submits that there could be stamp duty implications consequent upon the grant of the declaration.  In particular, it is said that the plaintiff would be able to use the declaration to negotiate with the Collector of Stamp Revenue on the question of whether stamp duty is properly payable on the Assent.  I do not, however, consider that it would be a proper exercise of the court’s discretion to grant a declaration in order that the plaintiff may be assisted in his negotiation with the Collector of Stamp Revenue.

16.In so far as the Confirmatory Assent is concerned, it is questionable whether it can or should be regarded as being a void instrument merely because it was not executed by or on behalf of one of the beneficiaries, particularly when the omission was deliberate.  In any event, now that the personal representative of Leo Chan (ie the 2^nd defendant) has been located or identified, the parties can rectify whatever defect there may be in the execution of that instrument.  Again, I do not consider that the court should exercise its discretion to grant a declaration in such circumstances.

PLAINTIFF’S SUMMONS DATED 19 JUNE 2017

17.The plaintiff commenced the present action by way of an originating summons in the expedited form (Form 10), instead of the general form (Form 8).  The plaintiff accepts that, under Order 7, rule 2(1) of the Rules of the High Court, Cap 4A, the expedited form should only be used if “authorized or required”, and the expedited form is neither authorized nor required to be used for commencing the present action.  Accordingly, the plaintiff took out a summons dated 19 June 2017 seeking to correct this irregularity.  In view of the conclusion that I have reached that the declaration sought should not be granted, plainly the court should not grant any relief under the summons.

18.The court has, for many years, been drawing practitioners’ attention to the fact the expedited form of the originating summons should be used only where authorized or required, and that in many cases the expedited form has been wrongly used (see, for example, the decision of Godfrey J (as he then was) in Hong Kong Ping Jeng Lau Co Ltd v The Incorporated Owners of United Centre, HCMP 2971 of 1989, given on 4 December 1989, and more recently the decision of DHCJ Paul Lam SC in International Automotive Components Group v Xuke Trading Limited, HCMP 564/2017, given on 19 April 2017).  Despite the court’s reminders, the same mistake has kept being repeated.  It must be emphasised that rules of court are meant to be observed.  It should not be assumed that the court will readily overlook breaches of the rule regarding the correct form of the originating summons to be used for commencing an action even if it can be said that no prejudice is suffered by the opposite party as a result of the use of the incorrect form. This is because the use of the correct form of the originating summons carries implications beyond the mere form of the document, including the timetable for the filing of evidence and the fixing of the date of hearing of the originating summons.

DISPOSITION

19.For the foregoing reasons, the plaintiff’s originating summons dated 22 May 2017 and summons dated 19 June 2017 are dismissed.  The parties are agreed that there should be no order as to the costs of this action, and I so order.

Mr Tim Yu, instructed by Edward C T Wong & Co, for the plaintiff

Ms C Yau, of Cheung & Co, for the 1^st and 2^nd defendants