Ng Im Fong Loretta the Executrix of the Estate of Lui Kwan Cheung, Deceased v. Charm Investments Ltd and Another

HCA 635/2019, HCA 1935/2019
& HCA 1115/2019

(Heard together)

[2021] HKCFI 1787

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 635 OF 2019

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1935 OF 2019

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1115 OF 2019

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(Heard together)

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D E C I S I O N

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Introduction

1.There are two sets of applications issued in three actions before this court, namely, HCA 635, 1115 and 1935, all of 2019.  All three actions concern the properties and estate of the late Mr Lui Kwan Cheung (雷均祥) (“Deceased” and “Estate”).  The plaintiff is the same person in each of the three actions, namely, Madam Ng Im Fong Loretta (伍艷芳) (“Madam Ng”), who is the widow of the Deceased (although the validity of the marriage is under attack, as explained below). 

2.One set of summonses were issued by the defendants, and the other by the plaintiff.  The defendants’ summonses in HCA 635 and 1935 of 2019 seek a stay of all further proceedings pending the determination of a probate action, namely, HCAP 28 of 2019.  The second set of summonses are Madam Ng’s application for an order appointing herself to be the administratrix pendente lite of the Estate for the purposes of carrying on each of the three actions.

Background

3.According to Madam Ng:

(1)  Madam Ng and the Deceased were distant relatives through his mother Ng Kam Fung (伍金鳳).  Madam Ng’s mother, Lun Mo Ching (倫慕貞), knew the Lui family and had jointly developed a building in Tai Po Road in the 1960s with the Deceased’s elder brother Lui Sum Hon (雷森瀚), and three other persons. 

(2)  Madam Ng had a previous marriage with one Mr Wong, and had two daughters with him, but they divorced in August 1972.

(3)  Since about 1972 the Deceased and Madam Ng had been in “customary marriage” and lived together as husband and wife in their home in Mei Foo Sun Chuen (“Mei Foo Property”), acquired by the Deceased in October 1972.  They had no children. 

(4)  On 1 August 2010, they were formally married by a civil celebrant (a solicitor, Mr Lee Kar Yum) in accordance with the provisions of the Marriage Ordinance (Cap 181) (“the 2010 Marriage”).

(5)  On 21 August 2010, the Deceased made a will, attested by the same solicitor Mr Lee Kar Yum and a medical doctor (Dr Freddie Lau), appointing Madam Ng as sole executrix and trustee and leaving his entire Estate to her as the sole beneficiary (“the 2010 Will”).

(6)  The Deceased died on 31 July 2014, leaving no issue. 

(7)  The Deceased had a very close relationship with his elder brother, Lui Sum Hon, who had 5 children with his wife Madam Tong Chun (湯珍), namely, Lui Siu Fong (雷小芳), Lui King Fong (雷琼芳), Lui Yuk Ping (雷玉屏), Lui Ming Lok (雷明樂) (“the Nephew”), and Lui Siu Ling (雷小玲). 

(8)  After the Deceased’s death, Madam Ng found out that the Nephew had exploited the mental incapacity of the Deceased and caused his assets to be transferred away.  In particular, a property known as No 358 Portland Street, Kowloon (“Portland Street Property”), acquired by the Deceased in 1968, was transferred to a newly established Hong Kong company called Charm Investments Ltd (“Charm”) in February 2008; a share held by the Deceased in Charm (out of a total of 4 issued shares) was transferred to the Nephew in March 2011.  Madam Ng has since taken various legal steps for the purpose of recovering the Estate’s properties, as described below.

4.The Nephew’s version of the background, apart from some basic facts, is very different.  According to him:

(1)  Madam Ng was just a girlfriend or female friend of the Deceased, not his wife.  The Lui family members had never heard of any “customary marriage” between them, and the Deceased had never referred to her as his “wife”.

(2)  In 1994, before undergoing a surgery, the Deceased wrote and signed a will dated 25 June 1994 and handed it to Lui Sum Hon (“the 1994 Will”), which read as follows:

「 立遺[囑]人雷均祥，本人倘有不測，則將本人名下之財產分配如下：

一、 座落九龍砵蘭街三伍捌號全幢物業，給[與]雷森瀚，湯珍，雷明樂，雷琼芳，雷小芳等五人，共同承受。

二、 座落九龍美孚新邨吉利徑 5D 號 17/F 樓之壹層樓宇，給[與]伍艷芳女士承受，另在本人之存款項下給[與]港幣弍佰萬元正。

三、 座落九龍海景街八號地下壹層物業及座落九龍基隆街170號九樓之一層物業則由雷玉屏收租終生享用。但業權最後由雷明樂承受。

四、 本人[開]設於廣安銀行及恒生銀行之戶口（包括往來、儲蓄、定期存款、電話理財等）統由吾兄雷森瀚全權[處] 理。又租用旺角大新銀行之保管箱，亦交由吾兄雷森瀚接收。

壹九九肆年陸月廿伍日」

In English translation:

“ I am Lui Kwan Cheung, the [testator]. In case I meet with any misfortune, the properties in my name will be apportioned as follows:

1. The whole building situated at No 358 Portland Street, Kowloon be given to Lui Sum Hon, Tong Chun, Lui Ming Lok, Lui King Fong and Lui Siu Fong and be inherited by the five of them together.

2. One property situated at 17/F, No 5D Glee Path, Mei Foo Sun Chuen, Kowloon be given to and inherited by Madam Ng Im Fong Loretta, together with two million Hong Kong dollars out of my savings.

3. The rent of one property situated at the ground floor of No 8, Seaview Street, Kowloon and one property situated on 9/F, No 170 Ki Lung Street, Kowloon be received by and used by Lui Yuk Ping in her lifetime. However, the property titles are ultimately to be inherited by Lui Ming Lok.

4. The accounts that I [maintain] with Kwong On Bank and Hang Seng Bank (including current accounts, savings accounts, time deposits and telebanking, etc) are all to be [handled] by my elder brother Lui Sum Hon with full authority. In addition, the safe deposit box rented from Dah Sing Bank in Mongkok is also to be taken over by my elder brother Lui Sum Hon.

The twenty-fifth day in June of the year one thousand nine hundred and ninety‑four”

(3)  The Deceased was close to Lui Sum Hon and his family.  They had regular gatherings without the presence of Madam Ng.  In particular, the Deceased had much affection for the Nephew and Lui Siu Fong.

(4)  The Deceased had assured the Nephew many times that he would give and transfer his interests in properties to him, including Flat A on 9^th Floor and Roof, Nos 168‑170 Ki Lung Street (“Ki Lung Street Property”).  From 2008, the Nephew had been managing that property, including collecting rentals and liaising with estate agents and tenants.

(5)  In October 2007, Charm was set up with 4 issued shares, held by the Deceased, Lui Hon Sum, the Nephew and Lui Siu Fong respectively.  The Deceased decided that the Portland Street Property would be assigned to and held by Charm.  Accordingly, on 29 February 2008, the Deceased executed an Assignment, transferring that property to Charm.  The Assignment stated it was made in consideration of $28 million paid by Charm to the Deceased, who acknowledged receipt in the Assignment.

(6)  After the allotment of shares in Charm in October 2007, the Deceased and Lui Sum Hon had said in family gatherings that they did not wish to hold or own the shares in Charm due to their advancing age.  In around February 2010, the Deceased said he wished to transfer his share in Charm to the Nephew.  It was accordingly resolved at a board meeting held in a family gathering in mid‑February 2010 that the Deceased would cease to be a director and his share would be transferred to the Nephew.  The Deceased signed undated documents for this purpose including a bought and sold note and an instrument of transfer in respect of his one share.  Because of the death of Lui Sum Hon on 2 May 2010 (and the death of the Nephew’s brother‑in‑law in March 2010), however, the registration of the changes was delayed. 

(7)  Eventually the bought and sold note and the instrument of transfer were dated on about 1 March 2011 and stamped. Apparently the share held by Lui Sum Hon was also transferred to the Nephew, who transferred one share to Lui Siu Fong.  As things stand, therefore, the Nephew and Lui Siu Fong each hold two shares in Charm, and Charm holds the Portland Street Property.

(8)  Since about late 2010, Madam Ng had prevented the Lui family members from seeing the Deceased so that they did not even know the Deceased had passed away in 2014 or that Madam Ng had obtained probate. Nor did they know of the 2010 Marriage or the making of the 2010 Will.  The Nephew only learnt from the legal steps taken by Madam Ng to recover the Ki Lung Street Property in September 2018 that the Deceased had died.

5.The legal steps and actions taken by the parties may be described as follows. 

Probate

6.On 1 December 2015, Madam Ng obtained probate of the 2010 Will in common form from the High Court.

Action to recover Ki Lung Street Property

7.In November 2016, Madam Ng made an assent as executrix to vest in herself the Ki Lung Street Property.  In September 2018 she began to take steps to recover possession.  She instituted an action (HCA 2347/2018) against unknown persons in occupation for recovery of possession of that property and obtained final judgment on 29 November 2018.

Action for inspection of Charm’s register of members

8.On 18 January 2019, Madam Ng made an application to the High Court (in HCMP 86/2019) for an order for inspection of the register of members of Charm.  This was resisted by Charm but on 11 March 2019 Madam Ng succeeded in obtaining an order for inspection.

Action to recover one share in Charm from the Nephew — HCA 635/2019

9.Having inspected the register of members of Charm, on 11 April 2019, Madam Ng in her capacity as executrix of the Estate brought an action (HCA 635/2019) to recover the one share in Charm transferred from the Deceased to the Nephew (“the Share Action”).  Charm and the Nephew are the 1^st and 2^nd defendants respectively.  The main bases of the claim have been summarised by counsel for Madam Ng as follows: (a) the mental incapacity of the Deceased; (b) the Deceased did not execute the relevant transaction documents with consent, knowledge, understanding or approval (ie non est factum); (c) no agreement was made for the share transfer and no consideration was paid to the Deceased; and (d) the share transfer contravenes section 66 of the predecessor Companies Ordinance (Cap 32).

10.A joint Defence of both defendants was filed on 24 June 2019 denying that the share transfer should be impugned, with further and better particulars filed on 2 September 2019.  In summary, the defendants contend that it was approved in about February 2010 or 1 March 2011 during a family gathering that the Deceased would resign as a director and transfer his share to the Nephew.  The Deceased signed the relevant documents including the bought and sold note and instrument of transfer, which was subsequently dated and registered.  The Deceased showed no signs of being mentally incapacitated between 2007 and mid‑February 2010.

11.A Reply was filed on behalf of Madam Ng on 18 October 2019 in which she contends, inter alia, that the Deceased’s signatures appearing on the share transfer documents were forged.

Action against solicitors — HCA 1115/2019

12.On 21 June 2019, Madam Ng in her capacity as executrix of the Estate brought an action (HCA 1115/2019) against the solicitors firm of Raymond Chan, Kenneth Yuen & Co who had acted as conveyancing solicitors for the Deceased in the transfer of the Portland Street Property to Charm in 2008 (“the Solicitors Action”).  Madam Ng’s case is that the Deceased was suffering from mental incapacity at the time of the transfer and the solicitors breached their duties owed to him in parting with the Assignment without obtaining any purchase monies, failing to give or account for the purchase monies to the Deceased, and failing to deliver to the Deceased or his personal representative all the papers and property upon the termination of the retainer.  She sues the solicitors for delivery of the conveyancing documents, an account of what is due to the Estate in respect of the purchase monies, and damages.

13.Raymond Chan, Kenneth Yuen & Co state in their defence dated 14 October 2019 that on 29 February 2007, the Deceased and “representatives”[1] of Charm attended the office of Charm’s solicitors, Messrs Alfred Lam, Keung & Ko to execute the conveyancing documents.  No money was received by Raymond Chan, Kenneth Yuen & Co on behalf of the Deceased.  Instead, the Deceased signed a confirmation letter prepared by Charm’s solicitors which stated that the purchase monies had been dealt with between the Deceased and Charm themselves, without the involvement of either firm of solicitors, before the execution of the Assignment.

14.On 8 November 2019, Madam Ng filed a Reply.

Action to recover Portland Street Property from Charm — HCA 1935/2019

15.On 22 October 2019, shortly after receiving the defence in the Solicitors Action, Madam Ng in her capacity as executrix of the Estate brought an action (HCA 1935/2019) against Charm (“the Property Action”), alleging that the Deceased did not have the requisite mental capacity at the time of the transfer of the Portland Street Property to Charm, that he did not receive any of the purchase monies of $28 million, that no agreement was made for the sale and purchase of that property, and that the property is held on a resulting trust for the Estate.  She seeks a declaration that the Portland Street Property is held on trust for the Estate, an order for its transfer to herself, accounts and inquiries, and damages.

16.On 29 January 2020, Charm filed a defence that relied on the defence filed in the Share Action.  Madam Ng filed a Reply on 25 February 2020.

Probate action — HCAP 28/2019

17.On 2 July 2019, the Nephew commenced a probate action against Madam Ng (HCAP 28/2019) (“the Probate Action”).  The gist of the Nephew’s case in that action has been summarised by Coleman J in his decision dated 11 August 2020 on a strike‑out application as follows:[2]

“ (1) The 2010 Marriage is invalid and/or null and void on the ground that the Deceased was mentally incapacitated at the material time. Hence (a) the 2010 Marriage is void and (b) the 1994 Will is valid.

(2) The Deceased lacked the mental capacity to execute the 2010 Will at the material time. Hence, the 2010 Will is null and void and of no effect.

(3) Further to the plea of lack of testamentary capacity, the Deceased was under the undue influence of the defendant in executing the 2010 Will. Hence, the 2010 Will is for that reason null and void and of no effect.

(4) The defendant acted wrongfully in reliance of the 2010 Marriage and the 2010 Will when applying for and obtaining the grant of probate.  Hence, that grant should be revoked.”

18.The significance of the plea that the 2010 Marriage is null and void, as opposed to merely voidable, is that if it is voidable, it would only be annulled as from the time of a decree of nullity and would have had the effect of revoking the 1994 Will (s 14 of the Wills Ordinance (Cap 30)), whereas if it is null and void, the 1994 Will would not have been revoked by it.[3]

19.Madam Ng applied by summons dated 16 July 2019 for orders to strike out various paragraphs and prayers of the statement of claim in the Probate Action.  She failed before a Master on 11 December 2019.  She lodged an appeal, but also filed a Defence on 20 January 2020. On 11 August 2020, Coleman J handed down a decision allowing the appeal in part and striking out the plea in the statement of claim that the 2010 Marriage was void, but refused to strike out other parts of the pleading.[4] 

20.The Nephew filed a notice of appeal on 1 September 2020 (CACV 418/2020), which was amended on 3 February 2021. Madam Ng filed a respondent’s notice to affirm the decision on additional grounds on 17 February 2021.  The appeal has not yet been set down.

The Applications

21.By summonses issued in October 2020, Charm and the Nephew apply for a stay of further proceedings in the Share Action and Charm applies for a stay of further proceedings in the Property Action (“the Stay Applications”), pending the determination of the Probate Action.  The grounds relied upon are the same.  These summonses are opposed by Madam Ng.

22.Raymond Chan, Kenneth Yuen & Co also took out a summons on 7 December 2020 for an order that all further proceedings in the Solicitors Action be stayed pending the final determination of the Probate Action, or alternatively pending the final determination of the Property Action.  This summons has been adjourned sine die pending the outcome of the Stay Applications and the APL Applications (as defined in the next paragraph).

23.On 29 October 2020, Madam Ng issued summonses in all three actions (the Share Action, the Property Action and the Solicitors Action) for an order that she be appointed the administratrix pendente lite for the Estate (“the APL Applications”).  The applications were made under section 40 of the Probate and Administration Ordinance (Cap 10) or alternatively RHC Order 15 rule 15.  The APL Applications in the Share Action and the Property Action are opposed by Charm and the Nephew, but not opposed by Raymond Chan, Kenneth Yuen & Co in the Solicitors Action, who were consequently excused from attendance at the hearing.

24.Madam Ng had also on 8 September 2020 taken out summonses for consolidation of the Share Action, the Property Action, the Solicitors Action, and the Probate Action (“the Consolidation Applications”).  The Consolidation Applications have been adjourned sine die pending the outcome of the applications dealt with in this decision.

The Stay Applications

25.I shall deal with the Stay Applications first.

Lodgement

26.The first submission made by Mr Anson Wong SC on behalf of Charm and the Nephew in support of the Stay Applications is that once a grant of representation has been lodged into court pursuant to RHC Order 76 rule 4, the personal representative cannot act further in such capacity and an action brought by him or her must as a matter of law be stayed.

27.RHC Order 76 rule 4 provides as follows:

“ 4. Lodgment of grant in action for revocation (O. 76, r. 4)

(1) Where, at the commencement of an action for the revocation of a grant of probate of the will or letters of administration of the estate of a deceased person, the probate or letters of administration, as the case may be, have not been lodged in court, then—

(a) if the action is commenced by a person to whom the grant was made, he shall lodge the probate or letters of administration in the Registry within 7 days after the issue of the writ;

(b) if any defendant to the action has the probate or letters of administration in his possession or under his control, he shall lodge it or them in the Registry within 14 days after the service of the writ upon him.

(2) Any person who fails to comply with paragraph (1) may, on the application of any party to the action, be ordered by the Court to lodge the probate or letters of administration in the Registry within a specified time; and any person against whom such an order is made shall not be entitled to take any step in the action without the leave of the Court until he has complied with the order.”

28.Mr Wong relies on Jen Kit Josephine, the Administratrix of the Estate of Jen Frank Chia Hsiang, deceased v Chan Sau Wai Shirley [2019] HKCFI 879, where Recorder Patrick Fung SC stated at §47:

“ I should also mention that there is authority to the effect that once an original grant of representation is lodged in the Probate Registry, the personal representative should not and cannot act further in such capacity. See the case of Ho Wai Yin v Cheng Suet Yee HCAP 18/2003 (13 February 2004) where Lam J (as he then was) said at para 22 as follows:

‘22. I do not accept this submission. Order 76 Rule 4(1) requires the lodgment of the grant in court after the commencement of an action for revocation. This is to ensure that nothing could be done on the strength of the grant in the meantime. It does not however mean that in every case where there is a claim for revocation of the grant, the assets of a defendant have to be frozen. If the administration of the estate has not been completed, the personal representative would not be able to continue to administer the same pending the determination of the action. …’

Thus, the injunction under paragraph 24(iii) above would just be one step forward from the natural consequence of the lodgment of a grant in the Probate Registry.”

29.There seem to me to be two answers to this argument.  First, neither Jen Kit nor Ho Wai Yin, cited by the Recorder, is a case concerning whether a personal representative has legal standing to continue an action brought in that capacity after the grant has been lodged.  In Ho Wai Yin, the administration had been completed, with no outstanding steps for recovery of the estate’s assets.  In fact, in Jen Kit, while the Recorder ordered the daughter of the deceased to lodge in the Registry the letters of administration, and made an order restraining her from acting as the administratrix of the estate until further order, he did not make any order staying the action she had brought against the second wife of the deceased for, inter alia, recovery of assets allegedly misappropriated, nor did he assume that the action would be automatically stayed upon lodgement of the grant.  What the Recorder said about a personal representative not acting further in such capacity after lodgement was said in connection with the injunction restraining the daughter from acting as the administratrix generally, not with reference to the High Court action she had brought.

30.After the grant has been lodged, naturally the personal representative will be unable to do any act that requires its production. However, lodgement of the grant does not amount to its revocation, even on a temporary basis, as stated by Lawrence Collins J in Daniel v Abiola [2003] EWHC 1562 (Ch):

“ … A common form grant has been obtained by the Claimants. If they fail in the probate action, then the court will revoke it as from judgment, but it remains valid pending the conclusion of those proceedings. The commencement of the probate action did not of itself revoke the grant, and if the Claimants fail in the probate action, the grant will not be void ab initio: cf Hewson v Shelley [1914] 2 Ch 13 (C.A.). The grant is still valid, although pursuant to CPR 57.6(2)[5] it has been lodged with the court. Lodgement does not affect its validity, and it is suggested in Tristram & Coote, p. 607, that a copy of the grant may issue with leave even before the probate action is concluded.”

31.It seems to me to follow from this that the lodgement of a grant does not have the automatic effect of terminating or suspending the status of the personal representative.  Where there are proceedings on foot seeking to revoke the grant, it may in particular cases be appropriate to halt the administration of the estate temporarily pending the challenge.  In Jen Kit itself, an express order was made to restrain the personal representative from acting as such pending the probate action.  No such order has been applied for in the present case, although the Stay Applications effectively seek to restrain Madam Ng from acting as the personal representative as far as the two actions are concerned.

32.Section 53 of the Probate and Administration Ordinance provides:

“ Subject to the provisions of any other Ordinance, a personal representative has the same power to sue in respect of all causes of action vested in and surviving the deceased.”

A personal representative remains a personal representative after lodgement of the grant.  This is accepted by Mr Wong, since he submits that RHC Order 15 rule 15[6] has no application in the present case because there is already a “personal representative”, namely, an executrix.  The personal representative is not automatically incapacitated by lodgement of the grant from carrying on an action begun in that capacity. Whether the court should in its discretion stay further proceedings in such an action when there are proceedings on foot seeking to revoke the grant, resulting in the lodgement of the grant in the Registry, is however a different question, which I deal with below.

33.Secondly, a special rule applies to Madam Ng as an executrix as opposed to an administratrix.  An executrix is at common law entitled, even before grant of probate, to commence an action and maintain it until such time when she needs to prove title, such as when obtaining judgment: Nativivat v Nativivat [2013] 4 HKLRD 340 (CA), §§17‑30; Yeung Yuk Yin v Chiu Tat Si & another [2006] 2 HKC 142, §§11‑19; Re Honeycool Refrigeration & Engineering Co Ltd [2009] 1 HKLRD 447, §§10‑17.  Mr Wong does not dispute this principle.  If Madam Ng, as executrix, is not required to have a grant of probate in order to commence and maintain the Share Action and the Property Action until such time when she needs to prove her title, I see no reason why the lodgement of the grant, even if it suspends its validity as Mr Wong contends, should deprive her of legal standing to prosecute the action at least until such time.

Challenge of status of executrix

34.The second point taken by Mr Wong is that as a matter of principle, an action brought by an executor in that capacity should be stayed where his status as executor is contested.  Reliance is placed on Chao Yue Wah v Mo & Company (Hong Kong) Ltd & others (HCA 2326/2001, 5 August 2003), where DHCJ Ambrose Ho SC said:

“ 19. … In the absence of any evidence to the contrary, I must proceed on the basis that those proceedings have not been resolved and the Plaintiff has not obtained probate either in New York or in Hong Kong. In these circumstances, however, the correct approach is not to strike out the action for want of locus on the part of the plaintiff, but stay the proceedings until probate has been taken out and a reasonable time has elapsed after it has been submitted to the defendant for inspection: see William, Mortimer and Sunnucks, (ibid.) para. 8-07 at p. 92; Webb v. Adkins (1854) 14 C.B. 401; Tarn v. Commercial Bank of Sydney (1884) 12 Q.B.D. 294.

…

23. … given that the rationale of the principle in Ip Cheung‑kwok’s case is to avoid the possibility of multiplicity of proceedings or embarrassment to the personal representative as and when he is duly constituted (as to which see p. 511G‑H of Clough JA’s judgment), such possibility is not removed or minimized unless the court is satisfied that the person who purports to act as the personal representative is indeed properly constituted and hence in a position to bind the estate. …”

The same approach was adopted by DHCJ Lok in Nativivat v Nativivat [2012] 3 HKLRD 747 at §§22‑24.[7] Mr Wong has also cited the current (21^st) edition of Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, where the same passage may be found at p 61, §5‑10.

35.It seems to me that while the practice mentioned in Chao Yue Wah may well be appropriate in many cases, it does not translate into an inflexible rule that an action brought by an executrix who has obtained a grant of probate should forthwith be stayed pending a probate action that seeks to revoke the grant.  In Yeung Yuk Yin, DHCJ L Chan declined to stay the action immediately given that it was at an early stage. In Re Honeycool Refrigeration & Engineering Co Ltd, Kwan J referred to a stay of proceedings brought by an executor until probate has been granted as “a discretion” rather than a principle, and stated that had a stay of the petitions before her been sought, she would not have granted it at that early stage of the proceedings.  I recognise that in both of these cases probate was not contested, and it was probably simply a matter of time before the executor obtained a grant, but they nevertheless show that the practice has not hardened into a rigid rule.

36.As for the two cases cited in the passage in Williams, Mortimer and Sunnucks, Webb v Adkins (1854) 14 CB 401 concerned an action on a promissory note given by the defendant to the testatrix.  The plaintiff had not obtained probate and the action was stayed until probate was taken out and reasonable notice thereof given to the defendant.  In Tarn v Commercial Bank of Sydney (1884) 12 QBD 294, there were no disputes on the merits of the claim or further steps to be taken in the action, and the defendant bank simply wished to ensure that the plaintiff had obtained probate so as to be able to give a valid discharge. These cases do not in my view assist the defendants’ position in the Stay Applications.

37.In Lee Chaio Shing v The Luk Hoi Tong Co Ltd & another (CACV 376/2003, 15 April 2004), a case where the grant of administration was contested, the court refused a stay.  There, the plaintiff, a nephew of the deceased who claimed also to be his adopted son, obtained letters of administration of the deceased’s estate and, as administrator, brought an action to set aside a transfer of shares in a company from the deceased to the defendant, who was the wife of another nephew of the deceased.  That defendant’s son brought a probate action against the plaintiff for revocation of the grant of letters of administration, and the defendant then applied for a stay of the action against her pending the probate action.  Yam J refused a stay.  On appeal, the Court of Appeal considered that the decision was one of case management, involving an exercise of discretion.[8] On the facts, the Court of Appeal, like the judge below, placed weight on the advanced ages of the plaintiff and defendant, and unhesitatingly dismissed the appeal.

38.A significant distinction between the present case and Chao Yue Wah and Nativivat is that there is no dispute that the outcome in the actions brought by Madam Ng as executrix — if prosecuted to judgment — are binding on the estate.  Madam Ng has already obtained a grant.  Unless and until the grant is revoked, she enjoys all the powers of a personal representative and has every authority to commence and maintain the Share Action and Property Action.  Even if the grant were to be revoked in the future, it would not have the effect of rendering those actions a nullity: Lee Chaio Shing, §14; see also Tristram and Coote’s Probate Practice (32^nd ed), §§1.25 & 1.27.  The question of multiplicity of proceedings or embarrassment to the personal representative who would not be bound by an order made in proceedings to which he was not a party, referred to in Ip Cheung‑kwok v Sin Hua Bank Trustee Ltd [1990] 1 HKLR 497 at 511G‑ H and Chao Yue Wah at §23, simply does not arise.

39.Ultimately, it seems to me that the question of temporary stay of proceedings in a case such as this is, as stated in Lee Chaio Shing, a matter of discretion and case management, to be approached on the basis of the balance of convenience and fairness as between the parties and with a view to ensuring the court’s procedures are used in a logical, fair and cost‑efficient manner: Re Chime Corporation Ltd (HCMP 4146/2001 etc, 11 March 2005), §14; Lok Man Sin v Lam Chi Wing [2019] HKCFI 56 at §20; Re Hsin Chong Construction Co Ltd [2021] HKCFI 1295 at §§11‑12.

Discretion and case management

40.This brings me to Mr Wong’s third main submission on behalf of Charm and the Nephew, namely, that the Share Action and the Property Action should in any event be stayed as a matter of discretion in the exercise of the court’s case management power. 

41.One common situation where an action to recover assets on behalf of a deceased person’s estate may be stayed pending a probate action is where the recovery action may become academic, for example, because the person from whom assets are sought to be recovered may well be found to be the sole beneficiary of the estate: see eg Chan Shui Hing v Chan Kin Keung (HCA 2658/2015, 10 November 2017); Re Chime Corporation Ltd, §34; see also Lok Man Sin v Lam Chi Wing, §22.  In such cases, the resolution of the probate action in favour of that person would be wholly dispositive of the dispute between the parties.

42.The same can hardly be said of the present case.  In this context, it is relevant to note that there are theoretically at least four different possible outcomes in the Probate Action based on the contentions advanced:[9]

(1)  The 2010 Will is upheld.  On this basis it does not matter whether or not the 2010 Marriage was void and whether or not the 1994 Will was a genuine and valid will.  Madam Ng is the sole beneficiary of the Estate by virtue of the 2010 Will.

(2)  The 2010 Will is invalid, but the 2010 Marriage was valid.  On this basis it does not matter whether or not the 1994 Will was a genuine and valid will, because it had in any event been revoked by the 2010 Marriage.  There will be an intestacy and the Estate will be equally divided between Madam Ng on the one hand and the Deceased’s nephew and nieces on the other pursuant to the Intestates’ Estates Ordinance (Cap 73).[10]

(3)  The 2010 Will is invalid, the 2010 Marriage was void ab initio, and the 1994 Will is not accepted to probate.  On this basis there is an intestacy and the Estate will devolve to those entitled under the Intestates’ Estates Ordinance, with Madam Ng claiming to be a widow under a “customary marriage”.[11]

(4)  The 2010 Will is invalid, the 2010 Marriage was void ab initio, but the 1994 Will is upheld.  Mr Wong says that in this scenario, the Property Action will be unnecessary because under the 1994 Will, the Portland Street Property is given to the five beneficiaries under clause 1, who can decide among themselves how the property should be dealt with.  I am in no position to assess the likelihood of these different scenarios.  It is however pertinent to refer to Coleman J’s observation that “proving the 1994 Will may not itself be straightforward, by reason of the matters raised by [Madam Ng]’s pleaded defence, including various versions of the 1994 Will appear to have been produced”.[12]  There are, however, complications even under this scenario:

(a)    Mr Pang SC submits on behalf of Madam Ng that the assignment of the Portland Street Property to Charm in 2008 means that the gift under the 1994 Will was adeemed, ie lost or withdrawn (see eg Ku Kwok Ying v Ku Kwok Ming & others [2020] HKCFI 3023) and that the potential right to recover that property from Charm became part of the residuary estate not disposed of under the express terms of the 1994 Will in respect of which there would be an intestacy.  Madam Ng would claim to be interested in the residuary estate as a widow under a customary marriage.

(b)  Alternatively, Mr Pang submits that the right to recover the one share in Charm pursuant to the Share Action would form part of the residuary estate.

(c)    Even if the Portland Street Property devolves according to the 1994 Will, there is a question of who actually have entitlement under clause 1 of that Will because, of the five persons there named, Lui Sum Hon had predeceased the Deceased and Madam Tong Chun had also died in 2016. 

43.There is no evidence who the beneficiaries of the respective estates of Lui Sum Hon and Madam Tong Chun are.  Likewise, there is no evidence at all as to the stance of the Nephew’s siblings, namely, Lui Siu Fong, Lui King Fong, Lui Yuk Ping and Lui Siu Ling, with regard to any of the matters relevant to the present applications.  The burden of justifying a stay of proceedings lies on the Nephew and Charm, but their assertion that the beneficiaries of the gift of the Portland Street Property under the 1994 Will can decide amongst themselves how it should be dealt with is a bald assertion. One can immediately see that, for example, whilst Lui King Fong is one of the devisees of that property under the 1994 Will, she does not apparently have any interest in Charm.  It follows that it would prima facie potentially be to her benefit (and indeed the benefit of the estate of Tong Chun) to have the transfer of the Portland Street Property to Charm set aside via the Property Action.

44.Thus even under scenario (4) above, it has not been shown that the determination of the Probate Action in the Nephew’s favour will be wholly dispositive of the other actions.  Those other actions concern what assets are comprised within the Estate, which is an entirely separate question from how the Estate devolves: see Lee Chaio Shing at §15.  The factual issues raised are also different.  It is true that mental capacity of the Deceased seems to feature in all the actions, with each side contending that the Deceased had mental capacity for some transactions but not for some other transactions between 2008 and 2010.  But the question of mental capacity is raised with respect to different legal acts and different times.  Further, the Share Action and the Property Action also raise questions of whether consideration was paid for the Portland Street Property and for the one share in Charm, and whether the signatures on the share transfer documents were in fact the Deceased’s.  In addition, Charm is not a party to the Probate Action and will not therefore be bound by the findings as to mental capacity made therein.

45.In addition, as things stand, of the scenarios mentioned above, (3) and (4) are not possible outcomes, because the plea advanced by the Nephew in the Probate Action that the 2010 Marriage was null and void has been struck out.  Unless that decision is reversed and the Nephew further succeeds at trial to show that the 2010 Marriage was void ab initio, there is no hope for the 1994 Will to have effect even if the Nephew succeeds in the rest of the Probate Action.

46.Despite having served a notice of appeal against Coleman J’s strike‑out decision, the Nephew has inexplicably failed to set down the appeal, with the result that even now, 10 months after that decision, no date has been fixed for the appeal.  This, coupled with the launching of the Stay Applications in October 2020, in my view smack of delaying tactics.  Nor has the Nephew taken steps to progress the Probate Action itself after the Defence filed by Madam Ng.  All of this means that substantial time will pass before the Probate Action can be tried and determined.

47.Madam Ng is 88 years old.  She will be a significant witness for the Estate in the Share Action and the Property Action.  In this context, what Le Pichon JA said in Lee Chaio Shing at §17 is apposite and a weighty factor against a stay:

“ … it would be denial of justice if the resolution of the dispute between the parties is to be further delayed. It would be most unfortunate if the real issue is not resolved when both parties are still able to give evidence.”

48.The Share Action and the Property Action are at an early stage.  As in Yeung Yuk Yin, there are many steps to be done before trial.  There is no suggestion that the actions have no intrinsic merits or are particularly weak.  Although there is no evidence of the precise value of the Portland Street Property, it is likely to be very substantial.  Allowing steps to be taken and costs to be incurred in preparation for trial would not in my view be a disproportionate exercise.  They would prima facie be steps taken to advance the interests of the Estate and would not necessarily become wasted even if the Nephew prevailed in the Probate Action, as explained above.

49.In all the circumstances, the Nephew and Charm have not in my view made out grounds for a stay of all further proceedings in the Share Action and the Property Action.  Their summonses are therefore dismissed.

50.I express no view on whether all four actions should be consolidated or tried together either wholly or in part, as the Consolidation Applications are not before me.  It seems indisputable, however, that there should be coordinated case-management to ensure that these related proceedings are conducted in the best interests of justice.

The APL Applications

51.The APL Applications may be more shortly dealt with.  Prompted by the Stay Applications, they are summonses issued in each of the Share Action, the Property Action and the Solicitors Action for the appointment of Madam Ng as administratrix pendente lite solely for the purpose of carrying on those actions.  Mr Pang has clarified that the applications are, in the alternative, for representation orders under Order 15 rule 15.

52.In my view such orders would only be necessary if this court had concluded that Madam Ng had no standing to maintain the actions or that the Estate was not represented in the actions so as to be bound but considered that the actions should be continued by a person representing the Estate: see Re Estate of Luk Kim Ying [2008] 5 HKLRD 743; Re Yien Chi Ren [2009] 5 HKLRD 413.  Since Madam Ng is an executrix who has obtained a grant of probate, I do not think such orders are necessary even though the grant is under attack in the Probate Action.  Indeed, as Mr Wong has pointed out, there is an issue whether Order 15 rule 15 can have any application at all since it applies where “it appears to the Court that a deceased person was interested in the matter in question in the proceedings and that he has no personal representative”.

53.In the circumstances I think the APL Applications should be adjourned sine die with liberty to restore.

Conclusion

54.For the above reasons, the Stay Applications are dismissed and APL Applications are adjourned sine die with liberty to restore.

55.I make an order nisi that the costs of the Stay Applications be paid by the Nephew and Charm to Madam Ng with a certificate for two counsel to be taxed if not agreed, and that the costs of the APL Applications be reserved.

Mr Robert Pang SC and Mr Jeff T F Yau, instructed by Fung Wong Ng & Lam LLP Solicitors, for the Plaintiff in all three actions

Mr Anson Wong SC and Mr Billy N P Ma, instructed by Chiu, Szeto & Cheng, for the 1^st and 2^nd Defendants in HCA 635/2019 and the Defendant in HCA 1935/2019

Attendance of Deacons for the Defendant in HCA 1115/2019 was dispensed with