Kung Ling Yen v. Kung Siang De, The Administrator of the Estate of Yen Yu Ling and Another

HCMP 1255/2024

[2025] HKCFI 555

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1255 OF 2024

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BETWEEN

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J U D G M E N T

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1.This is the substantive hearing of the Amended Originating Summons (“Amended OS”) issued by the Plaintiff (“P”) concerning the estate (“the Estate”) of his late mother Madam Yen Yu Ling (“the Mother”). The 1^st Defendant is P’s father (“the Father”), who is the current administrator of the Estate. The 2^nd Defendant (“D2”) is P’s elder brother (“the Brother”). In these proceedings, P is seeking an order to remove the Father as the administrator of the Estate, and to appoint P himself as the new administrator. P is also seeking an order requiring the Father to provide an inventory and account of the properties of the Estate by an affidavit or affirmation. The Brother has returned an Acknowledgement of Service to the Registry of this Court, in which he stated that he would not contest these proceedings.

2.Having perused the evidence concerning service adduced by P, I am satisfied that P has duly served the Originating Summons (“the OS”) and the supporting affirmation (ie P’s Affirmation dated 18 July 2024), and subsequently the Amended OS on the Father. The Father has not returned any Acknowledgement of Service to the Registry of this Court and has not appeared at any stage of these proceedings.

The facts

3.I accept that the facts as set out in P’s Affirmation, and in the affirmations concerning service adduced by P, are true. The material facts as found by this Court are set out in the paragraphs below.

4.The Father is now 91 years old and suffers from some chronic ailments such as high blood pressure and cardiovascular disease. Out of the marriage between the Father and the Mother, only two children were born, ie the Brother and P.

5.The Mother died intestate on 19 March 2015 at the age of 74. The Father, the Brother and P are the only beneficiaries of the Estate.

6.On 28 January 2016, the Father obtained a grant (“the Grant”) of the Letters of Administration of the Estate. As shown in the Schedule of Assets and Liabilities annexed to the Grant, the Estate consists of substantial assets:

(1) Cash of over HK$6.7 million;

(2) a residential flat in the Tin Hau area (“the Tin Hau Property”);

(3) a 50% shareholding respectively in 2 family-owned companies, Hoxon Metani Company Limited and Southyork Industrial Limited, which in turn hold 4 landed properties:

(a) a residential flat in Repulse Bay (“the Repulse Bay Property”);

(b) an office unit in Tsuen Wan (“the Tsuen Wan Property”); and

(c) 2 office units in Fortress Hill (“the Fortress Hill Properties”); and

(4) various stocks and shares in Hong Kong listed companies.

7.Despite the lapse of many years, after obtaining the Grant, the Father has not taken any step to administer the Estate. No information concerning the progress of the administration, and no account has ever been provided to the Brother and P. No distribution has ever been made. Further, the Tin Hau Property has been occupied by the Father at all times. The Repulse Bay Property has been left vacant without any rental income therefrom since September 2020. One of the Fortress Hill Properties has also been left vacant without any rental income therefrom since 2022. The Tsuen Wan Property was sold on 4 February 2021. No account of the sale proceeds has been given by the Father.

8.Since 2020, P has made repeated requests to the Father concerning the administration and the distribution of the Estate, but all those requests were ignored by the Father. Apart from oral reminders, P has also made the following written requests:

(1) On 15 April 2020, P through his solicitors wrote to the Father to remind him of his duties as administrator and requested for an account of the Estate and for distribution. The letter was returned by Father by post on 27 April 2020 with the handwritten words “不接受退回原寄者！孔”.

(2) On 12 May 2020, P’s solicitors wrote to the Father again and reiterated P’s demands. The Father did not give any reply.

9.On 13 October 2022, P (acting in person) issued an originating summons against the Father in HCMP 1558/2022, claiming for “fair shares of [the Estate]”. Subsequently, P discontinued the proceedings in HCMP 1558/2022.

10.In late 2023, P and the Brother discovered that Father has been making unexplained and frequent money transfers to a Madam To over a matter of years. The relevant monetary transfers known to P so far add up to over HK$3 million.

11.On 18 July 2024, P issued the OS in the present proceedings. On 21 October 2024, the OS was amended.

12.The OS and P’s Affirmation were personally served on Father by a clerk of P’s solicitors at the Tin Hau Property on 18 July 2024. On that occasion, the clerk told the Father that the documents were court documents. The handling solicitor also spoke to the Father over the phone and told him that the documents concerned an application to the Court regarding the administration of his late wife’s estate at the suit of his son. The Father responded and said that there was no problem with the administration.

13.The Amended OS was also personally served on Father by the same clerk at the Tin Hau Property on 23 October 2024. On that occasion, the Father acknowledged receipt by signing on the covering letter.

Discussion

14.Probate and Administration Ordinance (“PAO”), s.33(3) provides:

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

15.The principles concerning the exercise of the powers under s.33(3) of the PAO are as follows[1]:

(1) The discretion to remove an executor or an administrator under section 33 of the PAO involves an assessment and a value judgement in all the relevant circumstances of whether removal is required for the due and proper administration of the estate and the interests of the beneficiaries.

(2) Not every mistake or neglect of duty, or inaccuracy of conduct of trustees would induce the court to remove the executor or the administrator.

(3) The acts or omissions must be such as to endanger the trust property or to show a want of honesty, or want of proper capacity to execute the duties, or a want of reasonable fidelity.

(4) Hostility between the executor/administrator and the beneficiary is not a ground for removal, unless the breakdown of the relations between them is such as to lead to the administration coming to a standstill, or makes it difficult or impossible for the administration to be completed by an existing personal representative.

(5) In exercising its discretion, the Court should have regard to the size of the estate, the nature of the assets that need to be administered, the background and education, training and experience of the remaining and substituted personal representatives and the interests of the beneficiaries. The view of the majority beneficiaries is a relevant factor.

(6) The discretion to remove an executor or an administrator is to be exercised with great caution and sparingly. In general, removal is not to be preferred unless the administration is still far from completion. The Court is reluctant to exercise the discretion where the incumbent executor or administrator wishes to carry on, without allowing that incumbent an opportunity to repair or remedy any defects and progress promptly with due administration. The fact that administration of the estate could have been done better is not of itself sufficient ground.

16.The Court may order a personal representative of a deceased person to render a full and proper account pursuant to s.56 of the PAO, which provides:

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

17.A personal representative, after a grant has been made to him, owes a duty to collect and get in the real and personal estate of the deceased, and to administer it according to the law. It is also the duty of the representative to keep and to render a proper account of the administration of the estate.[2]

18.I agree that in the circumstances of this case, the Father should be removed as the administrator of the Estate. The assets in the Estate are substantial. P and the Brother together are entitled to a significant portion of the assets in the Estate, ie around 50%. By now, more than 9 years have lapsed since the date of the Grant. There is no evidence showing that the Father has taken any step to properly administer the Estate in the past 9 years. The Tin Hau Property has been treated by the Father as if the same is his own property. The Repulse Bay Property and one of the Fortress Hill Properties (the Estate is having interests in these properties) have been left vacant without any rental incomes therefrom for years. The Tsuen Wan Property (the Estate is also having interest therein) has been sold, with no account of sale proceeds given to P and the Brother. P’s requests for account and for distribution have all been ignored by the Father. There is no evidence showing that the Father is willing to carry out the administration of the Estate properly and to distribute the Estate to the beneficiaries within a reasonable time. Taking all these into account, in my view, it would not be appropriate for the Father to remain as the administrator of the Estate.

19.Regarding the transfers from the Father to Madam To, I am aware that there is no evidence showing that the money transferred is not from the Father’s own assets but is from the Estate. To be fair to the Father, I would not take this as a matter in support of the removal sought by P. In my judgment, the matters set out in [18] above would be sufficient in support of P’s application for an order removing the Father as the administrator of the Estate.

20.As to the replacement administrator, I agree that P is a suitable candidate. He is well-educated with vast experience in the financial service industry. P has a master degree from the Hong Kong University of Science and Technology. He is a financial analyst and have experience of over 25 years in the financial service industry. Prior to the Mother’s death, he was involved in the management of two family-owned companies and the landed properties owned by the two companies. As the Mother’s son, he also has a good understanding of her assets. P was a licensed person under the Securities and Futures Commission of Hong Kong. He is now located in London. However, P confirms that if he is appointed as the administrator of the Estate, he is prepared to relocate back to Hong Kong to take over the administration of the Estate and to complete the administration works as soon as possible. The Brother has confirmed that he himself is not willing to act as the administrator of the Estate. In other words, apart from the Father, P is the only beneficiary of the Estate who is willing to act as the administrator.

21.Given the Father’s uncooperative attitude, I agree that a revocation of the Grant is necessary as a mere removal is likely to be an ineffective remedy and will only cause further unwarranted delay in the administration. As said by Poon J (as he then was) in Re Estate of Kwan Chung[3] (where the administrator liable to be removed was also blatantly uncooperative):

“34. …… Removing [the defendant] is plainly justified. However, removal alone is not enough. For upon removal, the defendant has to lodge with the court the Grant so that the order for removing him and appointing the plaintiff as administrator can be endorsed on it. Given his uncooperative attitude so far and his failure to participate in these proceedings despite service, there is a real and substantial risk that the defendant will not lodge the Grant with the court even if so directed. It will surely cause further unwarranted delay to the due and proper administration of the estate. The Grant should in the circumstances be revoked.”

22.I would make an order to revoke the Grant. I would also make an order that a new grant be issued to P upon his compliance with all the usual formal and procedural requirements of the Probate Registry.

23.The Father has been the administrator of the Estate from the date of the Grant (ie 28 January 2016) until the date of this judgment. He has a duty to render a true and perfect inventory and account of the Estate for the aforesaid period to the Court and to the other beneficiaries, ie P and the Brother. I would order the Father to provide that inventory and account by an affidavit or an affirmation filed in the Court and served on P within 42 days from the date of service of the order made in this judgment.

24.There be liberty to apply.

Disposition

25.I make the orders as set out in the above. Costs should follow the event. I order that costs of these proceedings be paid by the Father personally to P forthwith, and those costs be summarily assessed at HK$210,000.

26.Lastly, it remains for me to thank counsel for the helpful assistance rendered to the Court.

Mr Jeremy Kwong, instructed by Lo, Chan & Leung, for the Plaintiff

1^st and 2^nd Defendants were not represented and did not appear