Ho Chiu King, Pansy Catilina v. Ho, Angela and Another

HCCA 4042/2020

[2022] HKCFI 1111

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CAVEAT NO HCCA 4042 OF 2020

________________________

________________________

BETWEEN

________________________

Before:  Hon Wilson Chan J in Chambers

Date of Hearing:  30 November 2021

Date of Judgment:  19 April 2022

________________________

J U D G M E N T

________________________

A.  INTRODUCTION

1.The matter concerns the estate (“Estate”)  of Dr Stanley Ho (the “Deceased”).

2.Before the court are 2 cross-applications taken out respectively by Pansy Ho (“Pansy”)  (the person warning)  and Angela Ho (“Angela”)  (the caveator)  for the appointment of independent professional administrators over the Estate.  They are taken out pursuant to section 36 of the Probate and Administration Ordinance, Cap 10 (“PAO”).

(1)  On 30 September 2020, Pansy issued a Summons, seeking to appoint Mr Patrick Cowley and Ms Rosalie Lui of KPMG as independent administrators (“KPMG Administrators”).  It also asks for the caveat filed by Angela to be vacated.  Pansy’s application is supported by the majority of the other family members, save Angela and Ringo Siu.

(2)  On 31 December 2020, Angela and Ringo Siu issued a Summons (“Angela and Ringo Siu’s Summons”), seeking to appoint Mr Edward Middleton and Ms Tiffany Wong of Alvarez & Marsal (“A&M Administrators”)  together with the KPMG Administrators.

3.In other words, it is undisputed that independent professional administrators should be appointed.  It is also undisputed that the KPMG Administrators should be appointed.  The only difference between Pansy and Angela[1] is whether the KPMG Administrators alone, or whether the A&M Administrators in addition to the KPMG Administrators, should be appointed.

B.  BACKGROUND

B1.  Family background

4.The Deceased needs no introduction.  He passed away on 26 May 2020 at the age of 98, leaving no will.

5.There is no dispute that the Deceased has left behind substantial assets which are expected to be located in various jurisdictions, including Hong Kong, Macau, Portugal, and no doubt other parts of the world:

(1)  According to Pansy, based on preliminary information available from the Deceased’s personal office, his estate is estimated to be worth at least HK$1.72 billion, with the full extent to be ascertained by the administrators.

(2)  According to Angela, she says there is evidence to show that the Estate would be worth more than HK$11 billion.  This, however, is based on a “bundle of documents” allegedly found in the Deceased’s bedroom drawers which - importantly and materially - Angela acknowledges is out of date.

6.There are 4 branches in the Ho family:

(1)  First Family: this branch consists of the children born by the late Madam Clementina Angela Leitão with the Deceased (only 2 of which are living), and also 3 grandchildren of the 2 deceased children.  Angela is one of their daughters.  Ringo Siu is one of their granddaughters.

(2)  Second Family: this branch consists of Madam Lucina Laam and the 5 children born by her with the Deceased.  Pansy is their eldest daughter.

(3)  Third Family: this branch consists of the 3 children born by Madam Ina Chan with the Deceased.

(4)  Fourth Family: this branch consists of the 5 children born by Madam Angela Leong with the Deceased.

7.Under the rules of intestacy, there are in total 18 or 19[2] beneficiaries to the Estate from these 4 branches.

B2.  The Family Deed

8.Shortly after the death of the Deceased, the family members of the Deceased had come together to try to agree on a mechanism for appointing professional administrators to administer the Estate, so as to ensure the smooth and amicable administration of the Estate.

9.After discussions, a mechanism was eventually agreed and recorded in a Family Deed dated 24 July 2020.

10.The discussions relating to the Family Deed were led and co-ordinated by Pansy, and all four families were involved in the discussions, and drafts of the document were sent to their respective representatives.  Angela even provided a series of comments and queries to the draft.

11.However, in the end, only the Second, Third and Fourth Families signed up to the Family Deed, and each family appointed a “Family Representative” to participate in the decision-making process.

12.Madam Laam did not wish to be a party to the Family Deed, but has separately indicated her support for Pansy’s application to appoint administrators made pursuant to the Family Deed.

13.Thus, 12 or 13 out of the 18 or 19 beneficiaries have agreed to the Family Deed mechanism.  For reasons not relevant to the present applications, one of the children in the Fourth Family has not formally indicated his position.

14.Pursuant to the mechanism under the Family Deed, the Family Representatives of the Second to Fourth Families then had a meeting to discuss the potential candidates to be appointed as independent administrators for the Estate, and interviewed 2 accountant firms.  In the end they chose KPMG to be the independent administrators.  The choice of KPMG was therefore the result of the collective decision-making process following due-diligence work as to the most appropriate candidates for the administration of the Estate.

B3.  The First Family’s stance regarding the Family Deed

15.The Family Deed was intended to include the First Family, and the other family branches had made efforts to involve the First Family in the discussions.  Initially, the First Family participated in these discussions.  At one stage, they even signed up to the Family Deed (and the Powers of Attorney)  on 21 July 2020, appointing Faye Ho (Angela’s niece)  as the Family Representative.

16.However, the First Family soon changed their stance (with Faye Ho informing Pansy of this change one day later).  Faye Ho formally resigned as the Family Representative of the First Family on 19 August 2020.

17.It is not clear what the reason was for this change of stance, but it appears that this change was led or advocated by Angela (whom Ringo Siu supports).  On Angela’s evidence, she says that this was because she (and not anyone else)  wanted the decision making by the Family Representatives under the Family Deed to be by unanimous vote, but this has not been accepted.[3]

18.This was not an issue for other members of the First Family.  This can be seen from the fact that Faye Ho, Deborah Ho and Sarah Ho remain supportive of the Family Deed and Pansy’s application.  They have each signed a letter indicating that they have no objection to Pansy’s application: see their letters dated 28 September 2020.  In other words, a majority of the First Family in fact was content with Pansy’s application even though they did not participate in the selection process via the Family Deed mechanism.

B4.  The position of the beneficiaries

19.Pansy issued her Summons on 28 September 2020, proposing to appoint the KPMG Administrators.  Her application is supported by:

(1)  The beneficiaries of the Second Family - Pansy herself is the Family Representative for the Second Family, and Madam Laam has indicated her support (see paragraph 12 above).

(2)  The Third Family and the Fourth Family have both expressed support of Pansy’s application - their respective Family Representatives (Laurinda Ho and Angela Leong)  have signed letters of support.

(3)  Three members of the First Family, Deborah Ho, Faye Ho and Sarah Ho have also indicated that they do not object to Pansy’s application (see paragraph 18 above).

20.Angela issued her Summons on 31 December 2020, proposing to appoint the KPMG Administrators plus the A&M Administrators.  Ringo Siu supports her application.  Faye Ho and Sarah Ho have also indicated that they do not object to Angela’s application.

21.In other words, Pansy’s application has the support of 15 or 16 out of the 18 or 19 beneficiaries, whereas Angela’s application has the support of 4 of the beneficiaries (with Faye Ho and Sarah Ho appear to indicate that they are content with either application).

C.  PARTIES’ RESPECTIVE POSITIONS

22.In broad terms, Pansy’s position and submission is that there are plainly no reasons for Angela to insist on appointing the A&M Administrators additionally, and that in the best interests of the Estate and the beneficiaries the court should only appoint the KPMG Administrators:

(1)  Administrators owe their duties to all of the beneficiaries and do not act as the agent or representative of the party seeking their appointment.

(2)  There is no suggestion that the KPMG Administrators are not independent and competent professionals who can handle the administration of the Estate impartially and in the interests of the beneficiaries as a whole.  Angela herself accepts this explicitly.

(3)  Pansy’s application is supported by the overwhelming majority of the beneficiaries and the Ho family which is a pertinent and strong factor as a matter of law.  Only Angela and Ringo Siu are now insisting on the joint appointment of the A&M Administrators.

(4)  In fact, at an earlier stage, family members had tried to work together on an agreed mechanism to appoint independent administrators.  The First Family was all along fully involved and indeed initially all four Families had agreed to an agreed mechanism for selecting and appointing administrators.  It was only because of Angela’s actions in causing the First Family to withdraw from the agreed mechanism at the last minute, and later insisting on her own nominee, that necessitated the present hearing.

(5)  Angela’s insistence stems from her misconceived idea, as set out in her 1^st Affirmation (made in support of her own Summons and in opposition to Pansy’s Summons)  filed on 30 December 2020, that the First Family (or more accurately she herself)  need their “own representation” amongst the administrators (Angela 1^st Aff, §13).  This is wrong in principle as administrators do not act as the “representation” of any particular camp of beneficiaries, but have a fiduciary duty to act in the interests of all the beneficiaries.

(6)  This fundamental misconception was immediately pointed out in Pansy’s 2^nd Affirmation (dated 3 March 2021)  at §43.

(7)  It was only then that Angela backtracked in her 2^nd Affirmation (dated 24 May 2021) and raised a completely new point (which she had never raised before in support of her own Summons)  that the A&M Administrators would offer something which she claims KPMG to lack.  Pansy submits that this new point is not only an afterthought, but a thoroughly bad point - KPMG as one of the “big four” accounting firms clearly is well capable of handling the administration alone.

(8)  In support of this new point, Angela suggested that the A&M Administrators would offer “checks and balances” to the KPMG Administrators (Angela 2^nd Aff, §7(c)), which appears to suggest that A&M would conduct such checks and balances on behalf of her interest, which actually is the same misconceived point that they would act as her representatives.

(9)  In any event, the appointment of additional A&M Administrators will only cause duplication of work and costs, and lead to inefficiencies in the administration.  It will not be for the benefit of the effective administration of the Estate.

(10)  In terms of justifying the two firm proposal, the size of the Estate is neither here nor there.  The simple point is that any administrator appointed will have the duty to investigate and ascertain the extent of the Estate, and can be trusted to take into account any suggestion or evidence put forward by the beneficiaries on the size of the Estate.  This would be so even if KPMG alone is appointed.

(11)  Angela appears to be making the point that Pansy (and other Families)  is trying to hide the extent of the assets left behind by the Deceased, relying on the admittedly out-of-date “Bundle of Documents”.  In particular, there is an allegation that Pansy had allegedly said at a meeting that the Estate had “zero assets”.

(12)  This is denied by Pansy.  In fact, Pansy has made clear that she (and other family members)  have no idea as to the precise scope of the Estate, and she was only providing a preliminary estimate (qualified by the words “at least” and so she was not in any way trying to limit the size of the Estate)  of the size of the Estate based on information from the Deceased’s personal office.[4] In any case, this is not a dispute that needs to be resolved by the court for the purpose of this application.

(13)  Angela refers to the family dynamics and adduced evidence as to a family dispute in early 2011.  What Angela selectively fails to mention is that this dispute was satisfactorily resolved by the family members in a Settlement Deed.[5]  Indeed, all the vast majority of the family members (save Angela and Ringo Siu)  are able to come together to support a joint approach under the Family Deed.  It is in any event difficult to follow why this would justify the appointment of an additional firm of Angela’s own choosing.

23.The respondents’ submission, on the other hand, is that there should be a compromise between Pansy’s proposal and Angela’s proposal because:

(1)  The authorities suggest that when there are different camps of beneficiaries, there should be a compromise and a representative from each camp should be appointed.

(2)  The respondents’ agreement to be passed over was based on there being professionals that they were satisfied and content with.

(3)  There should be a compromise to take into account the respondents’ views to minimise friction and mistrust.

(4)  KPMG’s team was “not good enough” to meet the demand of this estate, and A&M’s involvement would reduce costs.

D.  RELEVANT LEGAL PRINCIPLES

24.Under the Non-Contentious Probate Rules, Cap 10A (“NCPR”)  rule 21(1), certain beneficiaries in an intestacy have priority to take the grant of representation.  Those first in priority are the surviving spouse or the partner to a union of concubinage, and those second in priority are children or issue of the deceased.

25.Section 36 of PAO provides that:

“Where a person dies wholly intestate as to his estate…, or where it appears to the court to be necessary or convenient to appoint some person to be the administrator of the estate of the deceased person or of any part of such estate, other than the person who, if this Ordinance had not been passed, would by law have been entitled to a grant of administration of such estate, the court may, subject to section 25, appoint such person as the court thinks fit to be such administrator, on his giving such security, if any, as may be required under this Part or as the court may direct, and every such administration may be limited in such manner as the court thinks fit.”

26.In other words, under this section, the court has power to “pass over” persons who may have a better entitlement under the law and appoint some other person as administrator.

27.The words “necessary or convenient” in section 36 give the court a broad discretion, to be exercised in the best interests of the estate: Lefkowitz v The Bank of New York [1996] 3 HKC 591, 594D (Litton VP as he then was).

28.This power is often exercised to appoint independent professionals as the administrators.  This is often the case where there may be serious disputes or animosity amongst the competing groups of beneficiaries. See: for example, Re Estate of Chen Pang Ping Eugene[2016] 2 HKLRD 813, §38 (Kwan JA as she then was).

29.The court can also make a grant to a nominee under this power, in effect passing over all those entitled under the NCPR, where the relevant parties consent: see Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, 21^st ed (“WMS”), §21-08.

30.As noted above, in the present case, all family members agree that it would be in the interest of family harmony to appoint independent professional administrators.  The only dispute is as to who should be appointed - and more specifically, whether the candidates put forward by Angela should be appointed together with the candidates put forward by Pansy and supported by the rest of the family.

31.In terms of deciding on the identity of the administrator, the court would usually give preference to the candidate(s)  with the support of the majority of the beneficiaries: see WMS, §21-27.  This consideration usually arises in the context of a dispute between persons entitled to administration in the same degree under the NCPR: see WMS§21-24. Here, all the beneficiaries (save Madam Laam)  are the Deceased’s children and are entitled to the same degree.  Although they are not putting themselves forward to be the administrator but are putting forward their chosen professionals, the consideration to prefer the views of the majority must apply by analogy.

32.In such an application, the court generally should not delve into any disputed facts between the parties.  This is because the court is not called upon to determine the rights and liabilities of the parties, and it is not necessary for the court to resolve any disputed issues of fact: Re Estate of Chan Hung Mou HCCA 2740/2007 (unrep, 12.02.2009), §15 (Lam J, as he then was).

E.  DISCUSSION

E1.  Authorities dealing with different camps of beneficiaries

33.Pansy’s application has the support of the majority of the beneficiaries of the Estate.

34.As noted at paragraphs 19 to 21 above, Pansy’s application has the support of 15 or 16 out of the 18 or 19 beneficiaries, whereas Angela’s application only has the support of 4 (2 of them has indicated support or no objection to both applications).

35.It is of note that, even within the First Family, the majority of them supports or has no objection to Pansy’s application.  In effect, only Angela and Ringo Siu do not support Pansy’s application.

36.This is an important factor, since the court would in law generally prefer the application supported by the majority of the beneficiaries: see paragraph 31 above.

37.The starting point must be the general practice that the choice of the majority would be preferred by the court.  It matters not that this is a matter of practice, and not strict immutable law.  The idea that the court should reach a “compromise” whenever one minority set of beneficiaries take a different view is clearly not correct.  This is especially so when the appointment of independent professionals already addresses the issue of there being different camps of interests.

38.The authorities cited by the respondents in purported support of the idea that Angela and Ringo Siu (as noted above, their stance do not represent the First Family’s)  should have their own “representation” do not assist them.  This is quite apart from the point (see paragraph 18 above)  that they do not represent the First Family.

39.The authorities referred to do not concern the situation where professional administrators are to be appointed.  As explained in Re Estate of Chen Pang Ping Eugene(supra), per Kwan JA at §38, where there are disputes and hostility amongst the beneficiaries, it would often be appropriate to appoint professionals.  Plainly, the appointment of independent professionals would of itself address the need for each to have their representation.

40.It is notable that the respondents are not able to cite any reasoned decision where there are competing proposals as to the professionals to be appointed and where the court had decided to appoint 2 sets of professionals.

41.Further, both Re Lam Kam Wai [2009] HKCFI 58 and the extract from Tristram & Coote’s Probate Practice§§7.36-7.37 are concerned with the practice in the special situation where there are minority (ie under age)  interests, a situation where the court is required to appoint at least 2 administrators (under PAO section 25 and Re Lam Kam Wai §10).  This is clear from Tristram & Coote’s §§7.36-7.37:

“7.36 Where several branches of a family are all under age and equally entitled to a grant, it is desirable, when practicable, that the applicants for a grant should represent the several branches of the family.

7.37  If a member of one branch is of age and entitled in his own right to a grant, it is desirable that the other grantee should represent one of the other branches.”

42.That is not the case here.  In Re Lam Kam Wai there was one (lay)  administrator from one side, and since there was no one capable of acting from the other side, the court followed this practice and appointed a solicitor: see §13(b).

43.Finally, I agree that the respondents’ reliance on Re Estate of Loo Che Chin[2013] 2 HKLRD 739 is also misplaced:

(1)  As recorded at §27 of that case, Janet has no particular preference as to who should be appointed but has nominated KPMG.  Clive had concerns over KPMG and that was why the court chose to alleviate Clive’s concerns and appointed EY nominated by Clive.

(2)  In a case where there are opposing views on both sides, alleviating concerns always go both ways, because each side would have concerns as to the proposal by the other side. This was not the case in Loo Che Chin because Janet had no particular preference.  Thus the decision turned on the particular facts of that case.

(3)  The present case is clearly not the same.  In fact, Angela does not question the ability and professionalism of KPMG, but the Second to Fourth Families oppose the addition of A&M.

(4)  The respondents’ citation and reliance on the individual facts and results of cases is symptomatic of the approach of over-citation and drawing of analogy from cases in a different factual context, which has been adversely commented on in Loo Che Chin at §31 (a decision under section 36 PAO)

E2.  Basis of agreement to be passed over

44.In the present case, the respondents agreed to independent professionals as a matter of principle to maintain family harmony. The agreement was not stipulated or formulated as being conditional on having their choice of professionals.

45.There seems to be a suggestion that the respondents’ agreement to be passed over was on the basis that there be a professional acceptable to them.  That was plainly not the case.  It is plain that Angela agreed with this as a matter of principle.  Her evidence is that (Angela 1^st Aff §21):

“I agree with the view of [Pansy] that the most suitable way to administer the Estate is to appoint independent professionals to handle the matter given the long-standing fluid family dynamics among the Four Branches and the high profile of my Father’s family. Most importantly, it is to avoid future unnecessary disagreement or non-alignment of interests among the beneficiaries from the Four Branches which has occurred in the past.”

46.This is the position as explained in the authorities - if there are disputes and hostility, it would often be appropriate to appoint independent professionals: paragraph 39 above.  The authorities do not say that professionals nominated by each branch should be appointed - that would not remove the partisan nature of the appointees and would defeat the purpose of appointing independent professionals.  That is also against the practice of giving preference to the wishes of the majority.

E3.  Respondents’ insistence on A&M should not be accommodated

47.The respondents have no relevant concern over KPMG other than Angela’s insistence that they should have her own “representation”, which is a plainly misconceived notion.

48.As noted, it is only the respondents (not every beneficiary from the First Family)  who insisted on the A&M Administrators. The other 3 members of the First Family were content with appointing KPMG alone (even if they did not participate in their selection): see paragraph 18 above.

49.The starting point must be that the court would prefer the proposal of the majority.  If the court is to reach a “compromise” and accommodate their wishes every time one or two dissentient beneficiaries insist on their own choice, then this will happen in every case and this would lead to chaos.  Moreover, this would also be unfair to members of the majority who have agreed upon one candidate among themselves.

50.The First Family were given every opportunity to participate in the Family Deed and the selection process, and cannot now complain that they had not been given a chance to participate.

51.Further, given that Angela (and by implication Ringo Siu)  does not question the competence and professionalism of KPMG, it is difficult to see what the issue is even if Angela did not participate in their selection.

52.This stance of the respondents stems from Angela’s misconceived idea that A&M would be her “representation”, which itself suggests that she has her own agenda.  There is no need for her to have her own “representation”, when she does not challenge the professionalism or independence of KPMG.

53.On a proper analysis, it appears that what the respondents are really saying is that, although A&M are (on a proper analysis)  not their “representatives” and would act independently, the mere fact of appointing someone nominated by the respondents would:

(1)  serve to “alleviate their concern”;

(2)  ensure that they are “reasonably content”, and

(3)  address their feelings of “mistrust”,

so that this will minimise the risks of future disputes, which the respondents would otherwise be more likely to cause because they feel that they are not being represented (even if this is a misconceived view).  As submitted by Pansy’s counsel, this position just needs to be stated to be rejected.  There is no reason for the court to address the respondents’ “concerns” arising from an ill-conceived notion that A&M would be their representatives (which Angela has actually accepted on affirmation that they are not).

E4.  Allegedly favourable attributes of A&M

54.The respondents’ submission that A&M would somehow “complement” KPMG, or that the costs would be reduced if both KPMG and A&M are appointed is plainly unrealistic.

55.It is completely not to the point that A&M may be equally qualified as KPMG - the question is why they would be needed at all.

56.Specifically, the point originally made in Angela’s evidence was that there are certain skills or industry specific specialties that KPMG does not possess:

(1)  Angela emphasises that the assets involved in the Estate is diverse in their geographical location, industry sector and types of assets, including shares in private companies.  She argues that these assets would likely require “an active, interventionist approach”, including taking an active part of the business by becoming directors.  She then suggests that these skills are “at the core of” what A&M does, referring to certain senior members of the firm and their past experience.  She then specifically suggests that KPMG’s proposals did not identify these skills.

(2)  She also suggests that part of the Estate would involve interest in the hotels/hospitality and real estate sectors, and that A&M can offer veterans in these sectors.

(3)  With respect, these are points which cannot be accepted.  It is difficult to see how it can be suggested that KPMG, one of the big four accounting firms with global offices in 146 jurisdictions,[6] would not have the experience and skills to carry out these functions in the industries identified.  It is plain that KPMG partners would routinely take part in the active management of insolvent companies in cross-border liquidations.  Indeed, the KPMG Administrators have confirmed that KPMG does have such experience and skills, including in the real estate/hotel/hospitality sectors.  What Angela has done was simply to identify some points on the part of A&M which had been “pitched” for themselves but which KPMG had not explicitly identified, and then extrapolate some form of advantage by A&M over KPMG.

(4)  The respondents now attempt - forensically - to tone down the point and say that A&M would have these skills which would “benefit” the administration.  But this begs the question why is A&M needed if KPMG alone also have these skills and can manage the Estate alone.

57.As to the point that somehow A&M is more efficient in “committing resources seamlessly across borders”:

(1)  Angela’s point appears to be that because A&M is organised in a holding company and wholly-owned subsidiary structure, this means that A&M is a single business unit, and that it would be easier for the firm to commit resources from different firms operating in different geographical location.  It is touted that A&M partners have signed a letter committing the resources of their team to the project if required.

(2)  Angela then suggests that KPMG is not a global firm, but a network of independent firms, and thus each firm has no “authority” to commit the resources of another member firm. Thus, each time another member firm needs to be engaged, this would involve “multiple, separate negotiations with each and every local member firm”, which would lead to uncertainty, additional administrative costs, and substantial delay.

(3)  With respect, this is not a good point.  The fact that KPMG is not organised in a parent/subsidiary structure is neither here nor there.  It is not as if they are completely unrelated firms - as the KPMG Administrators have explained, the individual member firms have all signed membership agreements, and there is an established mechanism for member firms to obtain assistance from another member firm, without needing fresh negotiation each time.

(4)  KPMG has a proven track record of acting in cross-border matters, and their partners are accustomed to engaging and invoking the assistance of other member firms.  It is pure speculation on Angela’s part that because KPMG is organised in a network of member firms, this would mean that there would be lengthy negotiations each time leading to costs and delay.

(5)  The KPMG Administrators have also confirmed that in their experience, every time assistance was sought it was provided, and they are confident that if assistance is required for this assignment, it would be provided without delay or additional administrative costs.

58.As to the idea that KPMG would more likely encounter conflict of interest issues in respect of the known part of the Estate and the unknown part of the Estate:

(1)  Angela has seized on KPMG’s initial proposal which stated that it could not rule out that there might be conflict issue as suggesting that KPMG cannot even clear conflict for the “known estate”, and touted A&M’s ability to confirm that there is no conflict on its part for the assets disclosed in the “Bundle of Documents” (which is admittedly outdated).  This is quite misleading and unfair - the “Bundle of Documents” was not yet disclosed and relied on by the respondents at the time of KPMG’s initial proposal (and hence, at risk of stating the obvious, KPMG could not have considered them in the initial proposal).  In any event, KPMG has now confirmed that it has no conflict in respect of the assets disclosed in the “Bundle of Documents”.

(2)  Angela further suggests that because of KPMG’s significant auditing business in different jurisdictions and businesses, it is more likely that conflict of interest may arise for the “unknown estate” given the potential scope of the Deceased’s Estate.  She then refers to the fact that A&M has no auditing business and would be more likely to be able to act without conflict, and thus without disruption to the administration process.  Thus, the two firm proposal could provide an automatic basis for division of labour where a conflict arises.

(3)  In this respect, the KPMG Administrators have pointed out that an auditing relationship would only give rise to a conflict issue if the Estate holds a significant or controlling shareholding, which would require the KPMG Administrators to exercise some control in that company, or to sit on the board.  An independence issue may also arise where the shareholding of an auditing client represents a material part of the Estate (and there is nothing to suggest this is the position here).  But in any event, where such an issue arises, there are established mechanism in the profession to deal with it, such as appointing a special third party “conflict administrator”.

(4)  This is really a point of no substance.  It is entirely speculative to suggest that this would be a significant issue (if at all), and in any event such issues are routinely dealt with in the profession and in KPMG’s practice.  In any event, this alone cannot justify the appointment of an additional firm as administrators.

59.As to the suggestion that the two firm proposal would not involve deadlock or duplication, I agree that even if the two firms have no difficulty working together, the very involvement of two firms would necessarily involve duplication and increase administrative costs and inefficiency.

60.There is also a suggestion that A&M’s involvement would drive down costs because this would avoid future disputes:

(1)  However, Angela has not questioned the professionalism or independence of KPMG, and has not indicated any mistrust or concern towards KPMG.

(2)  If the point is that Angela has mistrust towards other beneficiaries, that has nothing to do with whether KPMG alone is appointed.

(3)  If it is suggested that because of her distrust towards the other Families it is likely for her to make allegations to the administrators for them to investigate, that again has nothing to do with whether KPMG alone, or KPMG plus A&M, are appointed - unless it is suggested that if A&M are appointed in addition, Angela would be more likely to accept a decision by the administrators and not raise any disputes (because the respondents would feel that they have had their say in the process through A&M), on which I repeat the comment made at paragraph 53 above.

F.  CONCLUSION

61.For the reasons set out above, I allow Pansy’s application and make an order in terms of paragraphs 1 and 2 of her Summons.  I dismiss Angela and Ringo Siu’s Summons.

62.As to costs, I make an order for Pansy’s costs of her application to be borne by the Estate, and her costs in respect of Angela and Ringo Siu’s Summons to be paid for by Angela and Ringo Siu (with a certificate for 2 counsel).

63.The above order as to costs is nisi and shall become absolute in the absence of any application within 14 days to vary the same.

64.Lastly, I express my gratitude to counsel on both sides for their helpful assistance in this matter.

Mr Paul Shieh, SC, leading Mr Keith Lam, instructed by Messrs Baker & McKenzie, for the Person Warning/Applicant

Mr Douglas Lam, SC, leading Ms Jacqueline Law, instructed by Messrs Haldanes, for the 1^st and 2^nd Respondents