Soong Kam Lee v. Sung Choi Fat As Administrator of the Estate of Sung Chun Fat Stanley Deceased

HCMP 16/2020

[2021] HKCFI 619

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 16 OF 2020

____________

____________

BETWEEN

____________

Before: Deputy High Court Judge Paul Lam SC in Chambers

Date of Hearing: 8 March 2021

Date of Judgment: 19 March 2021

____________

D E C I S I O N

____________

1.This is the hearing of the Amended Originating Summons taken out by the Plaintiff (“P”) for an order for removal of the Defendant (“D”) as administrator of the estate of Sung Chun Fat Stanley (“the Deceased”) and other ancillary orders. D is living in Canada. Although the court documents have been served on him pursuant to leave granted by the Court to serve them out of jurisdiction, he has not acknowledged service or responded at all.

2.The Deceased, a bachelor without any children, died on 25 October 2018 at the age of 61.  According to the death certificate, he died of intracranial haemorrhage in cerebellum.  He had 3 siblings: P was his eldest sister, Anne Yeung Sung Pui Fong was his 2^nd elder sister whereas D was his elder brother.

3.Letters of Administration were granted to D on 28 October 2019. According to the Schedule of Assets and Liabilities of the Deceased, his assets consisted of cash in bank accounts; shares in securities account kept at a bank; some insurance policies; and a property at Unit B, 5^th Floor, Block 3, Tsui Chuk Garden, No 8 Chui Chuk Street, Kowloon (“the Property”).

4.Although D has been living in Canada, he stated his address as Flat C, 8^th Floor, Block 4, Site 11, Whampoa Garden, Hung Hom, Kowloon, in the Affirmation by Administrator dated 23 April 2019, which is in fact P’s address.  P claims that, had D stated that he lives in Canada, he would have to provide 2 sureties’ guarantees to the Court to ensure that he will properly discharge his duties as administrator.

5.The Deceased was a surveyor employed by AECOM, and assigned to work at the AECOM Engineer Site Office, Tai Wan To, Lamma Island. To the best of P’s knowledge, the Deceased died during his work but the exact circumstances were unknown.  P claims that D has apparently not investigated whether there were circumstances which may support a potential claim under the Employees Compensation Ordinance and/or the common law against the Deceased's employer.  The limitation period for these potential claims expired on 25 October 2020, and will expire on 25 October 2021 respectively.  P takes the view that D should have carried out investigations; and if necessary, sought legal advice and commenced legal proceedings.

6.The Deceased’s estate has been partially administered in respect of his bank accounts, insurance policies, shares, and MPF, leaving the Property.  P has received $1,292,939 on 5 December 2019 (which were deposited into the account of her daughter Chu Fung Yuk).

7.D claimed expenses in the sum of $84,561. P took the view that the amount was excessive as a reasonable sum should be around $35,000.  According to the breakdown produced by D, the amount he claimed included airfare, loss of 11 week’s income, and 75 days’ expenses in Hong Kong.

8.The Property is subject to the Hong Kong Housing Ordinance. According to a land search done by P’s solicitors on 6 January 2020, the Letters of Administration have not yet been registered. D had obtained a e-valuation of the Property from HSBC on 23 December 2019 suggesting that the then market value thereof was $5,150,000.

9.In late December 2019, D informed P’s daughter that a prospective buyer offered to buy the Property at $3,100,000.  However, according to the WhatsApp messages disclosed by P, D refused to provide the particulars of the estate agent, or a copy of the provisional agreement to be signed.  More importantly, D alleged that P had promised to give her share of the sale proceeds to D’s son.  P denied that she had ever made any such promise.  She was also concerned whether the proposed sale price of $3.1M was the market price as there is no hard and fast rule to apply a 40% discount on the market value to cater for the premium payable to the Housing Authority.

10.The relevant legal principles are well established (see eg Chow Chak Kiu v Chow Man Chit and others, HCMP797/2016 (17 January 2017 (unreported), §§52-56). Section 33(3) of the Probate and Administration Ordinance (Cap. 10) (“the PAO”) provides that:

“The court may, if satisfied that the due and proper administration of the estate and the interests of the persons beneficially entitled thereto so require, suspend or remove an executor or administrator (other than the Official Administrator) and provide for the succession of another person in place of such executor or administrator and for the vesting in that other person of any property belonging to the estate.”

When deciding whether to remove an administrator, the proper question to ask is whether the removal is necessary for the due and proper administration of the estate and whether it is in the interests of the beneficiaries for the administrator to be removed.  It is not necessary to establish specific wrongdoing, misconduct or fault on the part of an administrator before he can be removed, although obviously wrongdoing, misconduct or fault would be relevant considerations.  The Court should also have regard to the size of the estate, and the nature of the assets to be administered. Failure to fully administer the estate of the deceased would also be detrimental to the due and proper administration of the estate (Mak Mei Ki Angela v Chan Wai Fong [2017] 2 HKLRD 515 at 519, §11).

11.On the other hand, section 56 of the PAO provides that:

“The personal representative of a deceased person shall, when lawfully required to do, exhibit, by affidavit filed in the court, a true and perfect inventory and account of the movable and immovable property of the deceased, and the court shall have power as hereinabove to require personal representatives to bring in inventories.”

The duty to render a full and proper account when called upon to do so is a fundamental and important duty; the failure to do so may, in appropriate circumstances, be a good reason to justify the removal of an administrator.

12.Returning to the facts of this case, my main concern is the Property.  It seems that, since late 2019, for over 1 year, D has not taken any further step to sell the Property, or informed P what he had done or intended to do in this respect.  At the hearing, I was informed that P is in possession of the title deeds of the Property, and there has been a complete breakdown of communication between P and D since late 2019.  At present, the estate of the Deceased has not been fully administered.  I am, in particular, concerned with D’s complete absence of response to these legal proceedings.  It appears that he is no longer interested in administering the Deceased’s estate.

13.In the circumstances, I agree that it is necessary to remove D as the administrator for the due and proper administration of the Deceased’s estate, and this would be in the best interests of the beneficiaries. However, as in Mak Mei Ki Angela v Chan Wai Fong [2017] 2 HKLRD 515, removal is not enough; given D’s complete failure to participate in these proceedings, there is a real and substantial risk that he would continue to be uncooperative and refuse to lodge the grant of the letters of administration with the Court upon removal.  This is an appropriate case to revoke the grant and dispense with the lodging of the letters of administration with the Probate Registry.

14.At the hearing, I was also told that P’s younger sister, who is also a beneficiary of the Deceased’ estate, supports her present application.  I agree that P is a suitable person to be appointed as the new administrator.  She is in Hong Kong, and in possession of the title deeds of the Property.  She may deal with the Property conveniently.  Further, she has indicated an intention to investigate whether is any potential claim arising out of the Deceased’s death, which I accept is a reasonable step to safeguard the interests of the Deceased’s estate and his beneficiaries.

15.For the above reasons, I shall make an order that:

(a) The grant of letters of administration in respect of the estate of the Deceased to D be revoked;

(b) Lodging of the letters of administration by D with the Probate Registry be dispensed with;

(c) D be removed as administrator of the estate;

(d) Within 2 months from the date of this judgment, D do furnish, by way of affidavit/affirmation, just and true accounts of the estate;

(e) A fresh grant of letters of administration of the deceased be issued to P as administrator upon compliance with all the usual formal and procedural requirements of the Probate Registry; and

(f) D do pay costs of P summarily assessed at $150,000.

Ms Gary Tam, of Gary K W Tam & Co, for the Plaintiff

The Defendant was not represented and did not appear