Wong Lai Yin Harry, The Executor of the Estate of Tin Fung Ying, Deceased v. Wong Chi Yin

DCCJ 5071/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5071 OF 2016

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DECISION

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1.This action concerns a property known as Flat A, 11^th Floor, Ngai Hing Mansion, Nos 74-76 Hak Po Street, Nos 2-24 Pak Po Street, and No 5 Yim Po Fong Street, Mongkok, Kowloon, Hong Kong (“the Property”). The parties agree that the ratable value of the Property is below HK$240,000.

2.The plaintiff seeks a summary judgment under Order 14 of the Rules of the District Court against the defendant for recovery of possession of the Property and for mesne profits from 13 December 2014.

The plaintiff’s case

3.According to the plaintiff, the Property was owned by Tin Fung Ying (“the Deceased”), who passed away on 13 December 2014.  In her last will (“the Will”), the Deceased appointed the plaintiff as the sole executor of her estate (“the Estate”), and bequeathed to the plaintiff, the defendant and Wong Wai Yin (“WY”) as tenants in common in equal shares of all her interest in the Property.  The Deceased was the mother of the plaintiff, the defendant and WY.

4.On 10 December 2015, the probate of the Will was granted to the plaintiff.

5.The plaintiff together with his family, and the defendant together with his family, lived in the Property.  On 25 March 2016, the plaintiff and his family moved out from the Property.  Since that time onwards, only the defendant and his family are living in the Property.

6.The plaintiff proposed to WY and the defendant that the Property should be sold in the market and then the proceeds would be distributed among themselves, and meanwhile the Property should be rented out for the benefits of all of them.  WY agreed to the proposal but the defendant has never made any concrete reply.

7.The plaintiff also proposed to the defendant that the first right to purchase the Property would be given to him and he might purchase the Property at market value.  Should the defendant not exercise that right, the plaintiff could purchase the Property at market value as WY had indicated that he would not purchase the Property.  The defendant has also not given any concrete reply.

8.The defendant is occupying the Property without paying anything to the Estate.  The plaintiff is unable to sell the Property when the defendant and his family are staying inside and occupying the same.  The plaintiff seeks to recover possession of the Property and mesne profits from the defendant.

The defendant’s case

9.There is no dispute that:-

(a)  the Property was owned by the Deceased, who by the Will bequeathed the same to the plaintiff, the defendant and WY as tenants in common in equal shares;

(b)  the Deceased also appointed the plaintiff as the sole executor of the Estate; and

(c)  the probate of the Will was granted to the plaintiff on 10 December 2015.

10.Ms Miriam Siu, counsel for the defendant, says that there are some factual disputes:-

(a)  The defendant is not, was not, and has not been living in exclusive possession of the Property.  The plaintiff still occupies one bedroom and holds the keys to the Property and can access the Property freely up to date.^[1]

(b)  The defendant, at all material times, was and is willing to sell the Property, there had been ongoing correspondence and communication from February 2016 to June 2016 in relation to the selling of and the offers to purchase the Property.

(c)  The defendant has never admitted that he or his family refused to permit the potential purchasers to enter and inspect the Property.

11.Ms Siu submits that the triable issues in this case are as follows:-

(a)  Whether the absence of assent would render the defendant in wrongful occupation despite his entitlement as 1/3 beneficiary of the Property under the Will;

(b)  Whether the defendant is an equitable tenant-in-common and is entitled to his enjoyment of the Property; and

(c)  Whether the defendant should be liable to pay mesne profit as from 13 December 2014 (ie, the date on which the Deceased passed away).

12.The defendant in his affirmation also claims that some of his financial contributions paid to the Deceased during the Deceased’s lifetime might have been used to pay the purchase price of the Property and its related expenses (“the Financial Contributions point”).  Further, the defendant has paid rates, management fees and expenses for repairs of the Property, and the defendant has also invested money to improve the Property (“the Payments Point”).

The principles

13.An Order 14 application has to proceed on the case as pleaded in the statement of claim and verified on oath by or on behalf of the applicant.  See Li Chuen Kwai v Po Lam Construction Development Ltd. (HCA 2376/2013, 24 September 2014), [11]; Chu Wen Jing Jennifer v Sin Hon Wai (HCA 10/2016, HCA 6/2016 and HCA 121/2016, 14 November 2016), [25] – [26]; and Taylor John Charles v Francis Anthony Ragusa (DCCJ 2163/2014, 9 May 2017), [5] – [6].

14.The applicant has to raise a plausible and prima facie sustainable case in the first place.  Thereafter, the respondent would have the burden to show triable issues.  See Hong Kong Civil Procedure 2017 (Vol 1), §14/4/4 and 14/4/9.

Possession of the Property

15.It is trite that the properties of the deceased vest in the executor from the moment of the death of the deceased, and the executor derives title from the will.  See Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (20^th Edition), §5-02:

“Where an executor is appointed by a will, he derives title from the will, and the property of the deceased vests in him from the moment of the testator’s death, so that probate is said to have relation back to the time of the testator’s death.”

16.It is well-established a beneficiary has no interest in any part of the estate before assent.  In Pacific Harbor Advisors Pte Ltd v Winson Federal Ltd (HCMP 1285/2015, 21 August 2015), Yuen JA said at [28.2]:

“…… it is well-established that a beneficiary has no legal or beneficial interest in the assets of a deceased person's estate until administration and distribution. What a beneficiary has is only a chose in action to have the deceased person’s estate properly administered and applied for his benefit when the administration is complete: see Commissioner of Stamp Duties v Hugh Duncan Livingston [1965] 694 at 708 and 717.”

See also the authorities mentioned by Mr Joshua Choy, counsel for the plaintiff, ie Chan Chun Wah v Chan Chun Wai Patrick & Anor [1987] 2 HKC 397, Chung Wing On v Chung Wing Piu [2006] 3 HKC 546, Commissioner of Stamp Duties (Queensland) v Livingston [1965] AC 694 (PC), and The Trustee of the Property of Law Ip Po (a bankrupt) v Yuen Yip Kan & Anor [1994] 2 HKLR 61.

17.A beneficiary also has no entitlement to possess any property without the consent of the executor before assent.  See Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (20th Edition), §81-03:

“Until assent or conveyance, a person interested under the will or intestacy has an inchoate right transmissible to his own representatives. It is a chose in action capable of itself being settled or transmitted. A person so interested cannot, however, without the authority of the representatives, take possession of the property, even though the testator expressly directs that he shall do so; otherwise a testator might appoint all his effects to be taken in fraud of creditors. Should he take possession the representatives may sue him for possession, trespass or conversion, according to the circumstances. Thus, although he is actually in possession of property specifically bequeathed, and the assets are fully adequate to the payment of debts, he has no right to retain property in opposition to the representatives, by whom, in such a case, an action will lie to recover it.”

18.With respect to Ms Siu, the questions posed by her as set out in §11(a) and (b) above are obviously not triable issues.  The point made by Ms Siu as set out in §11(c) above does not concern the possession claim made by the plaintiff.

19.As to the factual disputes submitted by Ms Siu as set out in §10 above, even if all these issues are resolved in the defendant’s favour, there is still no defence to the possession claim.  The defendant is not entitled to remain in occupation of the Property and refuse to return possession of the same to the Estate by reason of any of these issues.

20.In respect of the Financial Contributions Point and the Payments Point raised by the defendant in his affirmation, it is pertinent to note that the defendant has never claimed that he has any beneficial interest in the Property by reason of these points.  No estoppel has ever been pleaded in the defence or mentioned in the defendant’s affirmation.  In the circumstances, the Financial Contributions Point and the Payments Point obviously do not constitute any defence to the possession claim.

21.Since the ratable value of the Property is below HK$240,000, by virtue of s 35 of the District Court Ordinance, the possession claim made by the plaintiff is within the jurisdiction of this court.

22.In my judgment, in respect of the possession claim, the plaintiff has raised a plausible and prima facie sustainable case.  No triable issue has been shown by the defendant.  As a result, the plaintiff is entitled to have the order of possession sought. Since the defendant would need time to find a new residence for his family, I would order the defendant to deliver possession of the Property to the plaintiff within 12 weeks. 

Mesne Profits

23.Mesne profits are damages for wrongful occupancy.  See Clerk and Lindsell on Torts (21^st Edition), [19-74].  In order to claim mesne profits from 13 December 2014, the plaintiff has to show that the defendant’s occupancy of the Property as from 13 December 2014 onwards is wrongful.  In my view, the plaintiff has problems on this point:-

(a)  According to the plaintiff’s case, both the plaintiff and the defendant were in occupation of the Property from 13 December 2014 to 25 March 2016.  There is no assertion from the plaintiff that the defendant’s occupancy of the Property during this period is without the plaintiff’s consent.  In other words, there is no claim that the defendant’s occupancy of the Property during this period is wrongful.

(b)  In the correspondence passing between the parties, the plaintiff has asked the defendant to elect to pay 1/3 of the market rental of the Property or to move out from the Property. However, there is no clear and unequivocal notice to the defendant that he must leave the Property by a certain time.

(c)  The first clear and unequivocal notice to the defendant that he must immediately leave the Property is in the statement of claim dated 20 October 2016, in which the plaintiff claims against the defendant for, inter alia, possession of the Property.  The plaintiff may claim mesne profits from that date onwards, but this is not the claim in the statement of claim.  As said before, the plaintiff’s pleaded case is that there should be mesne profits from 13 December 2014.

(d)  Bearing in mind that summary judgment may only be given on the case as pleaded in the statement of claim, for the reasons above, I am of the view that the plaintiff cannot succeed in obtaining summary judgment on his claim for mesne profits.

24.Further, having considered the evidence filed by the parties, I am of the view that whether a bedroom in the Property is still occupied by or in the possession of the plaintiff is a triable issue.  If this issue is resolved in the defendant’s favour, that would mean that the defendant only occupies part of and not the whole Property.  This would affect the basis in assessing the mesne profits.

25.For all these reasons, I would give unconditional leave to the defendant to defend the plaintiff’s claim for mesne profits.

Disposition

26.I order that:-

(a)  there be summary judgment to the plaintiff on the possession claim and the defendant shall deliver vacant possession of the Property to the plaintiff within 12 weeks; and

(b)  there be unconditional leave to the defendant to defend the plaintiff’s claim for mesne profits.

27.I have heard submissions on costs.  Since the plaintiff has succeeded in the possession claim, the plaintiff should get costs of this claim.  As to the costs of the claim for mesne profits, the costs of this claim should be in the cause.  I am of the view that the time spent on the possession claim and the time spent on the claim for mesne profits are 2/3 and 1/3 respectively.  I make the following costs order:-

(a)  2/3 of costs of this action up to the date of this decision (including costs of the Order 14 application and all costs reserved, if any) be to the plaintiff forthwith, with a certificate for counsel, the total of which be summarily assessed at HK$40,000; and

(b)  the remaining costs be in the cause of the plaintiff’s claim for mesne profits, with a certificate for counsel.

28.Lastly, it remains for me to thank Mr Choy and Ms Siu for the helpful assistance provided.

Mr Joshua Choy, instructed by S H Chan & Co, for the plaintiff

Ms Siu Miriam Tip Ching, instructed by Lee & Yik Lawyers, for the defendant