Re Chan Choi Yim

HCCA002083/2001

HCCA 2083/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CAVEAT NO. 2083 OF 2001

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Coram: Deputy High Court Judge A Cheung in Chambers

Date of Hearing: 22 May 2002

Date of Judgment: 22 May 2002

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J U D G M E N T

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1.This is an appeal brought by the sole remaining Executor named in the last will of Chan Choi Yim, deceased, against the Order of Master C B Chan made on 11 April 2002. The learned Master ordered that the Caveator be appointed to join as an administratrix to apply for letters of administration with the will annexed of the estate of the deceased.

2.According to the heading of the Notice of Appeal, this appeal is brought under O. 58 r. 1 of the Rules of the High Court. Strictly speaking, this is incorrect. Any person aggrieved by a decision of the Registrar or a Master in a non-contentious probate matter may appeal by summons to a judge pursuant to rule 62(1) of the Non-Contentious Probate Rules (Cap. 10). This is how I am treating this appeal before me.

3.Turning to the substance of the appeal, under the will of the deceased, he left his entire estate to the Caveator - his widow, his three children including the sole remaining Executor, as well as a grand-daughter who is 15 years old. Under the will, the sole remaining Executor and another son of the deceased were appointed Executors. The other son has since renounced probate and that is why there is only one willing executor left. The deceased divided his estate into 5 equal shares and directed that each of the 5 persons mentioned by me above should receive one equal share.

4.The one matter which prompted the making of the Order by the learned Master below is this. As I said, one of the beneficiaries under the will is a minor. The Caveator therefore applied for, amongst other things, the appointment of herself as an additional administratrix pursuant to Section 25 of the Probate and Administration Ordinance (Cap. 10). At the hearing below, this application was opposed by the sole remaining Executor on the ground that Section 25 does not entitle the Caveator to make the application. Section 25(1) of the Ordinance reads as follows:

"Probate or administration shall not be granted to more than 4 persons in respect of the same property, and administration shall, if there is a minority or if a life interest arises under the will or intestacy, be granted either to a trust corporation, with or without an individual, or to no less than two individuals."

5.Mr Lui appearing for the sole remaining Executor argues before me that under subsection (1), a distinction is drawn between probate and administration, and it is only in the case of administration that no less than two administrators must be appointed unless a trust corporation is involved in the case of a minority or life interest. In the case of probate, there is no such mandatory requirement. Purely by looking at the wording of Section 25(1), I tend to agree with Mr Lui, although I note that the section is based on Section 160 of the Administration of Estates Act 1925 in UK and neither side has cited to me any authority on the proper construction of the section in question.

6.Mr Lui goes on to argue that under Section 25(2) of the Ordinance, there is indeed a discretion on the part of the Court to appoint an additional administrator in the case of a minority or life interest. Section 25(2) reads as follows:

"If there is only one personal representative not being a trust corporation then, during the minority of a beneficiary or the subsistence of a life interest and until the estate is fully administered, the court may, on the application of any person interested or of the guardian, committee or receiver of any such person, appoint one or more personal representatives in addition to the original personal representative in accordance with probate rules and orders."

7.Mr Lui however takes the point that only a person interested or the guardian, committee or receiver of such a person may make the application for the appointment of an additional administrator. And he further construes the words 'person interested' as being either the minor in which case the application will have to be made by the guardian of the minor, or the life tenant in which case he himself (or as the case may be, his guardian, committee or receiver) may make the application himself. Mr Au-Yeung, appearing for the Caveator, contends for a wider interpretation or construction of the words in question.

8.For my part, I am inclined to agree with Mr Au-Yeung. In my judgment, the words 'person interested' should not be restricted simply to the minor or the life tenant; other people having an interest in the estate may, depending on the facts, have good reasons to want to see to it that the estate is properly administered in respect of the interest of the minor or, as the case may be, the interest of the life tenant.

9.But I do not wish to and indeed need not come to any definite conclusion on this point. Amongst other reasons, I have not been referred to any authority whether English or local on the proper construction of Section 25(2). More pertinently, Mr Lui has, on behalf of his client, agreed that the Court may entertain the present application but should appoint, instead of the Caveator, the daughter of the deceased, i.e. Madam Chan Yuen Kwai, as the additional administratrix. With that concession, the dispute between the parties boils down to a competition between Madam Chan Yuen Kwai and the Caveator.

10.On the evidence presented before me, it is quite apparent that the widow does not enjoy a prefect relationship with the children in question. The widow was the second wife of the deceased and therefore is the stepmother of the children in question. Put at the lowest, there are suspicions relating to the transfer of a relatively large sum of money of over $600,000 shortly prior to the death of the deceased from the deceased's account in Hong Kong to the Mainland, where the deceased and the widow were staying at the time for medical treatment. There is no dispute that the money eventually ended up in the hands of the widow. The widow now says that the money was meant to be a gift by the deceased to her, whereas the contemporaneous correspondence does not seem to tally totally with that assertion.

11.Apart from that, since the death of the deceased, the children and the widow appear to have come to an agreement for the mutual abandonment of right to succession to two respective properties owned by the deceased in the Mainland. The agreement would not seem to have involved the grand-daughter.

12.In considering how I should exercise my discretion in the matter, in my judgment, the foremost consideration I must bear in mind is the interest of the grand-daughter whose minority is the reason for considering the appointment of an additional administratrix in the first place. In my judgment, there is a potential conflict or incompatibility between the interests of the grand-daughter and the widow relating to the transfer of money and the two real properties in the Mainland. I would like to emphasize the word 'potential' as the suspicions pointed out by me above may or may not materialise into anything. But if an additional administratrix is required to be appointed at all, her main function will be to protect the interest of the grand-daughter in relation to the proper administration of the estate and the division of the property.

13.That would include clarification of the real intention of the deceased in relation to the transfer of money and clarification of the position relating to the real properties in question and in particular, their availability for distribution in favour of the named beneficiaries under the will.

14.Given the factual background in question, I am of the clear view that the Caveator would not be in a good position to be such a person to protect the interest of the grand-daughter. I say this without implying any impropriety on the part of the widow. I say this simply because of a potential conflict in her intended dual role as the administratrix of the estate and a co-beneficiary under the will to whom allegedly the deceased made a substantial gift of money shortly prior to his death and in favour of whom the children have renounced right to succession to one of the two properties in the Mainland.

15.All this might conflict with the interest of the grand-daughter in the matter. In Tristram and Coote's Probate Practice (29th ed) para. 14.20, it says:

"Where a question was likely to arise between the administrators of the estate and a son of one of the applicants respecting the validity of a gift, the court refused to made a grant to the applicant in question on the ground that the claims of the estate might not be sufficiently strongly asserted by the father against his son."

In my judgment the same sort of consideration applies in the present case. This is particularly so when I do have a choice of potential additional administratrixes of the same degree, i.e. the daughter of the deceased, Madam Chan Yuen Kwai, who, according to the material before me, has no potential conflict or potential incompatibility of interest with the grand-daughter in question.

16.One additional matter that I take into account is this. As I said, apparently the relationship between the children and the widow is less than harmonious. The appointment of the widow as an additional administratrix may impede the efficiency of the administration of the estate in question.

17.The widow said in one of her earlier affirmations that she wanted to be appointed as an administratrix because otherwise she might have no knowledge of the progress of the administration. She was concerned that she might not be able to get back her fair share in the deceased's estate, she believed that her joining as an administratrix would not harm the interest of any person and it would only enhance the efficiency of administering the estate. Moreover, she could secure her interest by monitoring the progress.

18.First, I do not think all this is relevant to the protection of the interest of the grand-daughter. Second, I do not agree that the appointment of her as an additional administratrix would enhance the efficiency of administering the estate.

19.In my judgment, quite the reverse would likely happen if she were appointed. If the children and the widow are on a colliding course, there is really nothing that one can do to stop it; but what one can at least do is to prevent that from happening at the level of personal representatives. And so far as protecting the widow's own interest in the estate is concerned, no doubt the Executor and the additional administratrix to be appointed will be under legal duty to properly administer the estate and if they should fail to do so, the widow may always resort to enforcement by law of their obligations under an administration action.

20.As for the concern that the widow is residing in the Mainland, I do not place much weight on this factor because I accept Mr Au-Yeung's point that the widow, being a local resident, can come to Hong Kong if necessary at any time. And as regards the costs in question, given the widow's undertaking not to charge the costs of a separate firm of solicitors to the estate as the costs of administration, again I do not take that into account. But for all the reasons I gave above, I am of the view that, first, in exercise of my discretion, an additional administratrix should be appointed to protect the interest of the grand-daughter; and second, Madam Chan Yuen Kwai, who has given her consent to the intended appointment, should be appointed as an additional administratrix.

21.So in other words, I am allowing this appeal. I make an order setting aside the order of the learned Master; I further make an order that Madam Chan Yuen Kwai be appointed to join as an administratrix to apply for letters of administration with the last will of the deceased dated 15 July 2000 annexed of the estate of the deceased.

22.Since I am allowing the appeal, I should make it clear that many of the matters referred to by me above which influenced the exercise of my discretion and my decision in allowing this appeal were contained in evidence filed by the parties subsequent to the Order made by the learned Master. As I said, the hearing before the learned Master mainly focused on whether as a matter of law this application should be entertained; so far as the merits of the application was concerned, there was little material before the learned Master to suggest that the widow was less suitable a person than anyone else to be appointed as an additional administratrix.

23.As regards the question of costs, having heard the parties' submissions, I am of the view that the fairest order is as follows. As regards the costs of this appeal, they should be paid by the Caveator to the sole remaining Executor, to be taxed if not agreed. As regards the costs below, they should be paid by the sole remaining Executor to the Caveator to be taxed if not agreed. I think this is a matter fit for the instruction of counsel, so I order that there be a certificate for counsel for Mr Au-Yeung's appearance before the learned Master at the hearing below.

Representation:

Mr Herbert Au-Yeung, instructed by Messrs C L Chow & Macksion, for the Caveator

Mr Hermes Lui, of Messrs Hermes W K Lui & Co., for the Executor