Yuen Si Hay, Alan and Another v. Tran Muoi (in Her Personal Capacity and Her Capacity As the Administratrix of the Estate of the Deceased)

HCMP 669/2024

[2024] HKCFI 2209

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 669 OF 2024

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DECISION

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Introduction

1.Yuen Si Hay Alan (“Alan”) and Yuen Si Kong Eric (“Eric”) commenced this action by way of an Originating Summons issued on 22 April 2024. Primarily, they ask for revocation of the Letters of Administration of the estate of Yuen Sun Hong, their late father (“the Deceased”) granted to Madam Tran on 14 September 2021 and a new Letter of Administration be granted to them.

2.Madam Tran is the wife of the Deceased and the stepmother of Alan and Eric.

3.By summons issued on the same date (“the Summons”), Alan and Eric applied for a proprietary injunction (§1 of the Summons), a Mareva injunction (§2 of the Summons) and a disclosure order (§3 of the Summons) against Madam Tran relating to her administration of the estate of Deceased (“the Estate”). Alan filed his 2^nd Affirmation to support the Summons and Eirc filed his Affirmation in reply to the evidence of Madam Tran.

4.The proprietary injunction sought in the Summons is to restrain Madam Tran from disposing of or deal with or diminish the value of the assets of the Estate in the total sum of at least HK$126,167,840.80 (“the Injuncted Amount”).

5.The Mareva injunction sought is in similar terms and the disclosure order sought covers a number of different documents and information.

6.The triggering event prompting Alan and Eric to make their urgent application for injunctions by way of the Summons is the sale by Madam Tran of a property known as Flat C, 16/F, Fine Mansion, Nos.32-40 Village Road, Hong Kong (“the Happy Valley Property”) at the price of HK$16,500,000. They allege that the sale price was below market price.

7.At the call-over hearing of the Summons on 17 May 2024, Madam Tran gave two undertakings. First, she undertook to transfer to her solicitors Messrs. Lo, Wong & Tsui (“LWT”) for stakeholding 50% of the sale proceeds of the Happy Valley Property within 7 days from the date of receipt from the purchaser on the completion date on 28 June 2024 until determination of the Summons.

8.Second, Madam Tran undertook to transfer to LWT for stakeholding 50% of any sale proceeds of any stocks, shares or securities she may sell or any dividends in 7 days after receipt thereof until determination of the Summons.

9.It goes without saying that the two undertakings were given on a non-admission of liability basis.

Background facts

10.The following narrative of the background facts is largely taken from Mr To’s written submissions and should not be controversial.

11.The Happy Valley Property was acquired by the Deceased and registered in his sole name in 1987.

12.The Deceased and Madam Tran got married in 1994. Before their marriage, each of them had a previous marriage. Madam Tran also had two adult children from her former marriage. The Deceased and Madam Tran did not have any children in their wedlock.

13.In 1996, the Deceased and Madam Tran opened a joint savings account numbered 611-200-8826-7 (“the Joint Savings Account”) and a joint securities account numbered 606-3-10915-8 (“the Joint Securities Account”) with the CMB Wing Lung Bank.

14.On 27 December 2020, the Deceased passed away.

15.On 8 February 2021, LWT carried out a will search with the Law Society of Hong Kong on the instruction of Madam Tran and no will of the Deceased was found.

16.On 10 May 2021, in the presence of the representatives of the Home Affairs Department, the safe deposit boxes of the Deceased were under inspection and no will was found.

17.On 11 May 2021, on the basis of intestacy, Madam Tran applied for the Letters of Administration of the Estate with a Schedule of Assets.

18.Madam Tran’s application was granted on 14 September 2021 and the Letters of Administration were issued to her.

19.In late 2022, Madam Tran engaged a real estate agent to put up the Happy Valley Property for sale at HK$21 million.

20.On 15 Janaury 2024, the Happy Valley Property was sold at HK$16.5 million and the completion was scheduled on 28 June 2024.

21.On 19 August 2024, Madam Tran provided an estate account to Alan and Eric and by a letter of the same date informed them that the administration of the Estate has been nearly completed. The only outstanding matter is the credit balance of HK$480,000 odd in the bank account of the Deceased with HSBC which cannot be withdrawn without the HKID card of the Deceased.

The Summons

Proprietary injunction

22.Mr To, for Madam Tran, submits that though Alan and Eric are the beneficiaries, they have no legal or beneficial interest in the assests of the Estate until administration and distribution. Thus, they could not possibly be entitled to a proprietary injunction in respect of the Estate.

23.Mr To must be right. In Pacific Harbor Advisors Pte Ltd v Winson Federal Ltd (unreported, HCMP 1285/2015, 21.8.2015), Yuen JA at §28.2 had this to say,

“However 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. There is no evidence before the court that that has occurred and that a trust has already arisen in favour of VC.”

24.Mr To further draws my attention to Xie Wen Yuan v Zeng Mei Yu [2021] 3 HKLRD 894 in which Anthony Chan J dealt with an injunction application of a beneificary of an estate. The judge at §24 said this,

“However, it is reasonably well-established that a beneficiary has no proprietary interest in any specific asset of an estate during the course of its administration (see Commissioner of Stamp Duties v Livingston [1965] AC 694 at 707F to 708C and Ip Cheung-kwok v Sin Hua Bank Trustee Ltd [1990] HKLR 497 at 509E-G, per Clough JA). I agree with Mr Chan that none of the cases cited by Mr Tsui contradicted this position. In the premises, the proprietary claim is not a viable one.”

25.Ms Lau, for Alan and Eric, does not argue against these authorities and the applicability of the legal propositions.

26.It should then follow that neither Alan nor Eric could claim any proprietary interest in any assets in the Estate. Their proprietary injunction application must fail.

Mareva injunction

27.The legal principles relating to a grant of a Mareva injunction are well-established. The plaintiff must show:

1.  that he has a good arguable case on the substantive claim over which the court has jurisdiction;

2.  that there are assets within the jurisdiction;

3.  that the balance of convenience is in favor of grant;

4.  that there is a real risk of dissipation of assets, or removal of assets from the jurisdiction, which would render the plaintiff’s judgment of no effect. (see Hong Kong Civil Procedure 2024 Vol.1 §29/1/65 and Welly Grace Ltd v Keung Yee Man [2023] HKCFI 3082 per Recorder Eugene Fung SC at §14)

28.I have perused the affirmations of Alan and Eric and considered their evidence in light of Ms Lau’s submissions. Alan and Eric simply make a scattergun approach and a number of allegations including personal and humiliating attacks have been made against Madam Tran. Mr To says there are 20 of such allegations. I have lost counts. The quality of their evidence is embarrassingly poor and can hardly justify the grant of the draconian remedy.

29.Their substantive claim against Madam Tran is for the revocation for the grant of the Letters of Administration to Madam Tran (“the Grant”) and to replace her as the administrator of the Estate by themselves. Their allegations against Madam Tran include her wrongful dissipation of the Estate, her failure to account, her refusal of distribution and her false declarations in the application for the Grant.

30.Alan alleges that two months before the Deceased passed away, the Deceased during his hospitalisation told him that he had made a will. For reason best known to him, he did not ask the Deceased about the details of the will and its whereabout. There is no evidence whatsoever showing that he himself has made any effort to locate the will after the death of the Deceased.

31.Eric also in his reply affirmation asserts that the Deceased had prepared a will for himself. Eric says that the Deceased was a very organised and structured person and that was the reason why the Deceased had prepared a will for his late grandmother, i.e. the Deceased’s mother and one for himself. He gives no particulars about the Deceased’s creation of his own will at all.

32.If they have any conviction in their allegation, they should have stopped Madam Tran’s application for the Grant on the basis of intestacy. They should have carried out a carpet search for the will of the Deceased. They should not have allowed Madam Tran to administer the Estate for almost 30 months. They should not have complained that Madam Tran has failed to discharge her duty as the adminitratrix. She should not have been appointed at all.

33.Their credibility is seriously called into question by this baseless allegation.

34.I have to consider whether they have a good arguable case on their substantive case against Madam Tran in that the Grant would be revoked on the grounds advanced by them. I shall deal with these allegations in turn.

35.First, they accuse Madam Tran of wrongful dissipation of the Estate. The core complaint under this head is about the sale of the Happy Valley Property allegedly at an undervalue.

36.Alan alleges that he was told by Eric in December 2023 that he had walked past an estate agency in Happy Valley and noticed that the Happy Valley Property was put up for sale at HK$19,000,000. Upon enquiries with the staff of the estate agency, Eric found out that Madam Tran offered to sell the Happy Valley Property on the strength of the Grant.

37.Both Alan and Eric subsequently did some research and HK$16,500,000 appeared to them to be below market value. Alan said that they had no idea why Madam Tran contracted to sell the Happy Valley Property at such a low price.

38.Alan found out from the website of Centaline that the Happy Valley Property was sold on 15 Janaury 2024. He complained that Madam Tran had sold the Happy Valley Property without consulting or even informing them.

39.Thus, the overall picture painted by Alan and Eric is that Madam Tran secretly sold the Happy Valley Property at an undervalue. It was a wrongful dissipation of the Estate. Alan in his affirmation demands the sale proceeds to be paid into court because it is unclear whether Madam Tran has misappropriated any other money or assets from the Estate.

40.This cannot be the truth. To say the least, the account given is incomplete and misleading.

41.Madam Tran exhibited the WeChat messages exchanged between Eric and her on 13 October 2022. It can be seen that Eric told Madam Tran that Alan and he asked Madam Tran to sell the Happy Valley Property to put a quick end to this matter as they found the flat to be too old and they did not want it.

42.Eric also asked her whether she knew the balance of the HSBC account of the Deceased. Madam Tran promptly sent Eric a picture of the bankbook of the HSBC account showing him the balance.

43.In his affirmation, instead of dealing with the WeChat messages directly, Eric made additional irrelevant allegations. He said that the Deceased never wanted to add Madam Tran’s name to the Happy Valley Property and he placed the title deeds out of the reach of Madam Tran.

44.Eric further pointed out that Madam Tran did not take any step to ascertain the market value of the Happy Valley Property before the sale and she merely marked the price down from HK$21 million to HK$16.5 million arbitrarily. Eric suspects that she did so because she just wanted to complete the sale in a hurry and had no intention to distribute their shares to them.

45.I find the allegations to be illogical and groundless. It was Eric himself who gave Madam Tran direct instruction to sell the Happy Valley Property. He should have given her some kind of assistance to handle the sale including the determination of the sale price. He did nothing at all. He was simply not interested in the Happy Valley Property and just wanted to wrap up the matter.

46.Their allegation of undervalue is not supported by any evidence. I have no idea what research they have done, let alone the reliability of such research. They do not bother to adduce valuation evidence to support their grave allegation. Absent such evidence, I cannot accept that the Happy Value Property was sold at an undervalue, particularly given the well-known fact that the Hong Kong property market has gone downhill for the past few years.

47.I, too, fail to understand how it can be inferred that Madam Tran would deny their shares of the sale proceeds from the alleged undervalue sale.

48.Next, Alan complains that there are 5 properties missing from the Schedule of Assets. They are (1) the dividends earned from the shares in the Joint Securities Account, (2) a 5 carat diamond ring (“the Ring”), (3) the title deeds of a burial land of his grandmother situate at the Chinese Permanent Cemeteries, Chai Wan, (4) the title deeds of a burial place of his grandfather situate at the Chinese Permanent Cemeteries, Pok Fu Lam and (5) the shares deposited or stored in the HSBC bank in an account registered under the sole name of the Deceased.

49.By reasons of these missing items, Alan alleges that Madam Tran must have taken away quite a lot of money from the Estate. He then, out of the blue, complains that Madam Tran did not mention the will which the Deceased had mentioned to him. It is difficult to follow his train of thought in his affirmation.

50.Nonetheless, I shall deal with the missing items in turn to see whether there was any misappropriation of the properties in the Estate by Madam Tran.

51.The Joint Securities Account undoubtedly is the prime concern of Alan and Eric. As of 26 October 2020, the value of the shares in the Joint Securities Account stood at HK$123,798,560. It forms the bulk of the Injuncted Amount.

52.The position of Alan on the Joint Securities Account is, however, ambiguous.

53.First, he alleges that in a causal conversation with the Decesaed in October 2020 in the hospital, the Deceased told him that though the Joint Securities Account was registered in their joint names, he did not intend to give Madam Tran any shares. He even did not tell Madam Tran that her name was added to the Joint Securities Account too. Her name was added just because the Deceased might ask her to help him to sign some documents for the trade of such shares and he might be unable to do so by himself due to his illness or hospitalization. The Deceased did not want to add Alan or Eric to the Joint Securities Account because they were very busy though all such shares in the Joint Securiies Account would be given to them in equal shares eventually.

54.This account is demonstrably unbelieveable. As pointed out by Mr To, as confirmed by the CMB Wing Lung Bank, the Joint Securities Account was opened in April 1996 in the joint names of the Deceased and Madam Tran from the inception, 2 years after they got married. There is no evidence that the Deceased was in poor health at that time.

55.Even if the Deceased had told this untruthful account to Alan and Alan did believe him, there is no reason why Alan only mentioned this important matter for the first time in the present action. He should have confronted Madam Tran and taken appropriate action to safeguard the interest of both Eric and himself concerning the Joint Securities Account soon after the demise of the Deceased.

56.On the other hand, in his affirmation, Alan complains about the non-inclusion of the dividends from the shares in the Joint Securities Account in the Schedule of Assets. Alan relies on a statement of the Joint Securities Account issued on 26 October 2020.

57.This is a non-point. As submitted by Mr To, Madam Tran was required to set out the assets and liabilities of the Deceased in the Schedule of Assets only. Madam Tran duly set out all the shares and their quantities in the Joint Securities Account and I do not find it necessary to include the dividends deriving therefrom. In any event, I do not accept that the omission to include the dividends can be indicative of Madam Tran’s intention to misappropriate such dividends.

58.More importantly, Mr To submits that the shares and any dividends deriving therefrom in the Joint Securities Account should belong to Madam Tran by way of survivorship.

59.Mr To refers to the following passages in Lewis on Trusts (20^th Ed) Vol.1 §§10-095 to 10-096,

“The simplest case is where all the money paid into a bank account held by two or more persons is provided by one of them. Normally there will be a rebuttable presumption that all the money standing to the credit of the account is held in trust for the person who provided the money, which was formerly the general rule with purchases of property. However, if the bank account is in the names of husband and wife or parent and child, and the husband or parent provides the money, there is a rebuttable presumption of advancement to the spouse or child, upon survivorship, of the amount, if any, standing to the credit of the account as at the death of the providing spouse or parent. This differs from a presumption of beneficial joint tenancy in that the other spouse provider’s or child has no beneficial interest in the money standing to the credit of the account during the lifetime, and is not entitled to any interest accruing to the account before the provider’s death. …

Where a presumption of advancement of the kind mentioned above arises, it is often sought to be rebutted on the ground that the joint account was opened and maintained simply for the convenience of the person who provided the money, as where that person is in failing health and it is convenient for the other joint account holder to be able to draw cheques on the account. Where a presumption of advancement is rebutted on this ground, the money standing to the credit of the account will be held in trust for the provider of the money during his lifetime and for his estate after his death.”

60.Accordingly, even if Madam Tran had little contribution to the Joint Savings Account and the Joint Securities Account, there is a rebuttable presumption of advancement in favour of her. Alan does seek to rely on the ususal rebuttal ground stated above but I do not think that it is supported by any credible evidence.

61.It should be noted that in a letter issued by the CMB Wing Lung Bank dated 28 Janaury 2021, it was stated that the Deceased’s share of the balance in the Joint Savings Account vested in Madam Tran.

62.I accept the submission of Ms Lau that a survivorship clause in a joint bank account is not conclusive as to the common intention of the joint registered owners of the account.

63.On the evidence before this court, I am satisfied that Madam Tran has a bona fide case that she has become the sole beneficial owner of the Joint Savings Account and the Joint Sercurities Account by way of survivorship. I am unable to accept that Alan and Eric have a good and arguable case of Madam Tran’s misappropriation of the Joint Savings Account and the Joint Securities Account incuding the dividends deriving therefrom.

64.Next, Alan alleges that the Deceased once told him that his aunt had given him the Ring before her death and it was intended to be a gift for both Eric and him. The Deceased told Alan that he had put the Ring in one of his safe deposit boxes.

65.Regarding the Ring, Alan relies solely on the words of the Deceased. He himself has not confirmed the gift of the Ring with her aunt. The gift was rather unusual in that two adult men were to share a very expensive diamond ring. I suppose having been given such a big gift, Alan and Eric would thank their aunt and there may be documentary proof evidencing the relevant exchanges between their aunt and them such as text messages or emails. There is no such evidence at all.

66.On the other hand, Madam Tran stated in her affirmation that she has never seen the Ring and no one has ever mentioned its existence to her before the present action. If the allegation of the Ring has any truth in it, no doubt Alan and Eric would have made enquiries with Madam Tran.

67.There is no rebuttal evidence in the reply affirmation alarmingly.

68.In the premises, I cannot see how Madam Tran can be faulted for not including the Ring in the Schedule of Assets. Alan and Eric have not begun to show that there is a prima facie case of misappropriation of the Ring by Madam Tran, let alone a good and arguable case.

69.Now I turn to the non-inclusion of the title deeds of the burial places of the Deceased’s father and the Deceased’s mother. I do not understand how this omission can cast doubt on the integrity of Madam Tran. There is not a shred of evidence that Madam Tran tries to misappropriate these burial places in any manner.

70.Lastly, Alan alleges that the Deceased had told him that he had a securities account with HSBC in his sole name but Madam Tran has not include this HSBC security account in the Schedule of Assets.

71.Madam Tran produced a letter issued by HSBC dated 8 March 2021 in which it was confirmed that no such securities account has ever been in existence.

72.Insofar as the accusations of failure to account and refusal of distribution are concerned, I accept Madam Tran’s explanations in her affirmation. I also do not understand the basis on which Alan and Eric say that Madam Tran is required to complete distribution within 12 months from the Grant.

73.Now I come to their very serious allegation that Madam Tran committed an offence of false declaration in her application for the Grant. Alan even exhibited a judgment relating to a criminal case tried in the District Court to show the gravity of making a false declaration. The defendant there was sentenced to 12 months’ imprisonment for making a false declaration in the course of her application for administration of an estate to the Australian court.

74.Alan first alleges that Madam Tran is an illiterate. She does not know how to write their names and knows nothing about their personal details such as their dates of birth and HKID card numbers. He says that Madam Tran never asked them about such information. He then verily believes that Madam Tran failed to mention them in her application for the Grant. He has reported this matter to the police.

75.Madam Tran has produced her affirmation filed in support of her application for the Grant filed on 11 May 2021 and both Alan and Eric were duly included as beneficiaries.

76.This allegation is simply absurd. I find it unacceptable that Alan saw fit to make such a serious allegation so lightly on oath. In all fairness to Ms Lau, no oral submission has been made about this.

77.I do not intend to deal with each and every allegations of Alan and Eric, especially those which appear to be made half-heartedly and on speculation only. I refuse to deal with those allegations raised for the first time in the reply affirmation of Eric. Madam Tran had no chance to deal with them at all. In any event, Mr To has provided a complete answer to such allegations in his written submissions and it should be sufficient for me to indicate my agreement to his analysis.

78.To conclude, I am not convinced that any of the allegations has any substance. Alan and Eric have failed to show a good and arguable case of revocation of the Grant. I do not need to consider their application for a Mareva injunction further.

79.It should be borne in mind that Madam Tran, in case of intestacy, is entitled to at least half of the Estate.

80.Even if Alan and Eric eventually succeed in their substantive claim against Madam Tran, I fail to see how they would obtain a significant monetary claim which calls for interlocutory relief to be given now.

81.I also find no evidence of Madam Tran’s dissipation of her own assets which may render Alan and Eric’s monetary claim to be of no value.

82.I then come to the conclusion that Alan and Eric cannot be entitled to any Mareva relief.

Disclosure order

83.Alan and Eric have an application for disclosure of a plethora of items, strongly suggestive of a fishing expedition. It should be noted that it is not a standalone discovery application under Order 24, Rules of the High Court. Any disclosure order made should be ancillary to the Mareva injunction if it is granted.

84.It follows that in light of my refusal of a grant of Mareva injunction, Alan and Eric cannot be entitled to the disclosure order sought or any disclosure order at all.

Conclusion and order

85.For the reasons given, I conclude that the application of Alan and Eric is misconceived and is not supported by credible evidence. The Summons falls to be dismissed.

86.There is no reason why costs should not follow the event. I have seriously considered indemnity costs but finally I decided against it. I make an order nisi that Madam Tran’s costs of and occasioned by the Summons including all costs reserved be paid by Alan and Eric, to be taxed if not agreed.

87.It remains for me to thank both Ms Lau and Mr To for their assistance in this matter.

Ms Lorinda Lau, instructed by AC Lawyers LLP, for the 1^st and 2^nd plaintiffs

Mr Ken To, instructed by Lo, Wong & Tsui, for the defendant