Chan Pang Fee v. Chan Pak Man and Another

HCMP000155/1980

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

NO. 155 OF 1980.

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Coram: LIU, J. in Court

Date of Judgment: 29th August, 1980.

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JUDGMENT

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1. The Probate and Administration Ordinance was "to consolidate and amend the law relation to probate and letters of administration and to the administration of the estates of deceased persons". Our attempt at providing a comprehensive code has given rise to much interpretation difficulty. These proceedings necessitate the consideration of its section 54, section 62 (1) (a) and section 65.

2. The court is invited to determine the legal effect of an Agreement for Sale and Purchase signed, before letters of administration, by the widower of an intestate whose estate involved minority interests.

3. The plaintiff's wife died intestate on the 14th June 1977 leaving surviving her, the plaintiff and five children. At the time of her death, her two youngest children were 18 and 19 respectively. The intestate's estate comprised, inter alia, a property known as Flat 40 with Car Parking Space 31 in Block B of Bellevue Court at 41 Stubbs Road (hereinafter referred to as "the said flat"). This flat was then under mortgage to the Hang Seng Bank for securing the repayment of over $213,000. At the date of the death of the intestate, there was outstanding by way of mortgage principal and interest an amount of slightly over $217,000. $5,000 funeral expenses were incurred. Estate duty was payable, and a sum in the region of $152,000 was paid to the Estate Duty Commissioner in May 1978.

4. The plaintiff was under the erroneous impression that he was entitled to apply for a grant to himself alone. Much motivated by what he deemed to be an ominous purchase which saw the death of his mother and his wife, as the proposed administrator and in due course of administration the plaintiff entered into an Agreement for Sale and Purchase dated the 8th March 1978 for the sale of the said flat.

5. The said Agreement for Sale and Purchase recited, inter alia, that the plaintiff as surviving husband of the intestate had taken steps to apply for letters of administration. Clause 18 of the said agreement declared that the plaintiff was selling as the intending administrator for the purpose of administrating the estate of the deceased. It was provided by Clause 17 that the sale was to be completed within 14 days after notice was given of the grant and that if the vendor should have failed to obtain letters of administration by the end of 1978, the purchaser would be entitled either to extend the time for completion or to rescind. Clause 4 of the said agreement reads as follows:

"If the purchaser shall make or insist on any objection or requistion either as to title conveyance or any matter appearing on the title deeds or particulars or conditions or otherwise which the vendor shall be unable or on the ground of difficulty delay or expense or on any other reasonable ground unwilling to remove or comply with or if the title of the vendor shall be defective the vendor shall notwithstanding any previous negotiation or litigation be at liberty to annul the same in which case the purchaser shall be entitled to the return of the deposit but without interest cost or compensation."

6. Shortly after the signing of the said Agreement for Sale and Purchase, on the 12th April 1978 the plaintiff made an affirmation for the Estate Duty Commissioner. In a statement marked "X" and attached to his said affirmation, the plaintiff reported "the persons entitled in distribution under the intestacy" of his deceased wife as himself and his said five children. Over 21 months later and after a change of legal representation, in a letter to each of his said five children dated the 29th January 1980 his then solicitors asserted that the plaintiff was "acting in honest but mistaken belief that he was solely entitled to the deceased's estate" at the time of the signing of the said Agreement for Sale and Purchase. There has not been a scintilla of evidence to support the truth or falsity of such an assertion which must, therefore, be wholly ignored.

7. As required by section 25 (1) of the Probate and Administration Ordinance, letters of administration of the estate of the said intestate were granted to two administrators in the person of the plaintiff and his eldest son, the 1st defendant, on the 4th January, 1980.

8. In his said affirmation for the Estate Duty Commissioner in April 1978, the plaintiff gave a sworn value of the said flat as $400,000. In November 1978, the value of the said flat as at the date of death was accepted by the Commissioner for estate duty purposes as $725,000. The said flat was agreed to be sold by the said Agreement for Sale and Purchase for $960,000 i.e. almost one-third more. By the time letters of administration were granted in January 1980, the market value of the said flat had reached $2,250,000. Today, the general consensus is that it has soared above $2,500,000.

9. The plaintiff is an honourable man and has no desire of taking advantage of the rising market. He is anxious to complete the sale and considers the bargain struck at the time of the Agreement for Sale and Purchase as being fair and reasonable. He regrets that the 1st defendant as his co-administrator has declined to concur in the completion of the sale. He has been advised that the said Agreement for Sale and Purchase does not bind the estate of the intestate and that he cannot compel the concurrence of the 1st defendant. He has endeavoured to solicit but in vain the cooperation of his other children. He has instituted these proceedings with the primary object of securing an order of the court for implementing the sale under the said Agreement for Sale and Purchase by a conveyance. Through leading counsel, the plaintiff eloquently urged the court to approve and confirm the sale under the said Agreement for Sale and Purchase which he entered into in good faith. He has done all that can reasonably be expected of him to perfect his title or remove any hindrance in matters of conveyance. As a last resort, the plaintiff would seek an annulment of the sale pursuant to Clause 4 of the said Agreement for Sale and Purchase.

10. The 2nd defendant has caused to be obtained a Valuation Report from a firm of surveyers and valuers dated the 17th July 1980, which assessed the market price of the said flat as $960,000 as at March 1978 and $2,250,000 as at January 1980.

11. Section 25 (1) of the Probate and Administration Ordinance requires not less than two personal representatives to be appointed for an estate involving minority interests. What immediately leaps to mind is the extent to which the powers of several administrators may be effectively exercised by one or some of them. In England, before the 1925 legislation all the personal representatives must join in the sale or transfer of real estate in the absence of judicial intervention. ⁽¹⁾ However, section 12 of the Conveyancing Act, 1911 dispensed with the concurrence of non-proving executors in such sale, transfer or disposition. After 1925, section 2 (2) of the Administration of Estates Act 1925 consolidated the position. Suffice it for me to say that our section 54 (1) and (2) of the Probate and Administration Ordinance stem from section 2 (2) of the Administration of Estates Act, 1925. In substance, section 54 (1) requires a conveyance of land belonging to the estate of a deceased to be executed by all the personal representatives unless a court order is otherwise obtained. Section 54 (2) introduces an exception in the case of non-proving executors who need not be joined. ⁽²⁾

12. The powers of personal representatives are wide-ranging. ⁽³⁾ Except for executing a conveyance of land, section 54 (3) permits the powers of the several personal representatives to be exercised by any one of them, provided he acts within the four corners of the testamentary document or the letters of administration. Section 54 (3) of our Ordinance is set out below:

"Save where subsection (1) or (2) applies, where there are several personal representatives the power of all may, in the absence of any direction to the contrary in the will or grant of administration, be exercised by any one of them."

13. Section 54 (4) seems to be concerned with the case of a single personal representative, and section 54 (5) renders any disposition of properties by a personal representative in contravention of section 54 voidable at the instance of any person interested. It would seem that section 54 may be breached by, inter alia, a disposition contrary to any restriction imposed by the will or an attempted implementation of sale by a conveyance made without the concurrence of all the personal representatives.

14. By section 62 (1) (a), any immovable property belonging to the estate of an intestate is to be held, subject to section 54, upon a trust for sale.

15. Lastly, section 65 (1) of the Probate and Administration Ordinance reads as follows:

"Subject to the provisions of section 54 every contract entered into by a personal representation in the due administration of an estate shall be binding on and be enforceable against and by any other personal representation for the time being of the deceased, and may be carried into effect or be varied or rescinded by any other such personal representative as if it had been entered into by himself."

16. It appears reasonably clear that section 65 (1) envisages the situation of an incumbent personal representative appointed to an estate saddled with a contract formerly entered into by a preceding personal representative. It specifies the general effect of that contract and the manner in which that commitment may be dealt with in administration by the successor. It provides a machinery for administering committed assets and is not concerned with the exercise of contracting power by a personal representative.

17. Mr. Ching, leading counsel for the purchaser, submitted that the said Agreement for Sale and Purchase entered into by the plaintiff as the intending administrator binds the estate and thus the plaintiff's co-administrator, the 2nd defendant. Mr. Ching relied heavily on section 54 (3) and/or section 65 (1).

18. A great many old authorities were paraded before the court with a view hopefully to isolating some principle for guidance. I was taken through case after case of determined judicial endeavours to endeavours to remedy injury done to an estate prior to the grant of letters of administration. Whilst the title of an executor relates to the date of death and that of an administrator relates to the grant upon obtaining letters of administration, an administrator's power to sue for wrongs suffered by an estate prior to his grant, as in the case of trespass, trover and conversion, has long been recognised. See Long v. Hebb ⁽⁴⁾. This approach is better known as the doctrine of "relation back".

19. The principle of relation back has also been applied to validate acts done before grant, for the benefit of the estate or in due course of administration. Whitehall v. Squire ⁽⁵⁾ is an example of the latter, where an intending administrator disposed of a horse in part satisfaction of the funeral charges incurred, and it was held by a majority judgment that the horse could not be reclaimed. Morgan v. Thomas ⁽⁶⁾ is an illustration of the doctrine operating in favour of a pre-grant act beneficial to the estate. It was an action for the recovery of household furniture, and at page 307, Parke, B. had this to say:

"It is only in those cases where the act is for the benefit of the estate that the relation back exists, by virtue of which relation the administrator is enabled to recover against such persons as have interfered with the estate, and thereby to prevent it from being prejudiced or despoiled".

20. The rationale was earlier adumbrated in Foster v. Bates ⁽⁷⁾. At page 233, Parke, B. observed:

"It is clear that the title of an administrator, though it does not exist until the grant of administration, relates back to the time of the death of the intestate; and that he may recover against a wrong doer who has seized or converted the goods of the intestate after his death, in an action of trespass or trover. All the authorities on this subject were considered by the Court of Common Pleas, in the case of Tharpe v. Stallwood, where an action of trespass was held to be maintainable. The reason for this relation given by Rolle, C.J., in Long v. Hebb, is that otherwise there would be no remedy for the wrong done."

21. The doctrine of relation back has also been applied to land as in In the Goods of Elizabeth Pryse, Deceased. ⁽⁸⁾ At page 305, Stirling L.J. said of the doctrine in the following terms:

"That law is stated with reference to an action of trespass or trover with regards to goods; but in the case of Rex v. Inhabitants of Horsley Lord Ellenborough treats the same law as being applicable to the case of leasehold property."

22. But what is the limit of this doctrine of relation back? In a footnote to the report of Middleton's Case, ⁽⁹⁾ the same misgiving was aired on the decision of Whitehall v. Squire ⁽⁵⁾:

"There is some difficulty in ascertaining whether in any, and if in any, in what cases administration shall have relation back to the death of the intestate."

23. At page 453 Williams on Executors, 15th Ed. , the following passage appears:

"The proposition, however, respecting the vesting of an administrator's interest, must be taken with some qualification; for it seems clear that, for particular purposes, the letters of administration relate back to the time of the death of the intestate." (The underlining is mind)

24. That the doctrine of relation back as applicable to leasehold interest has its limitation was acknowledged by Lord Ellenborough, C.J. in R. v. Inhabitants of Horsley ⁽¹⁰⁾. One of the issues in Horsley case was whether a period of residence in a parish prior to a pauper obtaining letters of administration could be included, by reason of the principle of "relation back" upon obtaining a grant, in the computation of the requisite 40 days' residence for gaining a settlement in the p rish. The doctrine of relation back was held to be inoperative for a collateral purpose.

"The grant of letters of administration, though it may have the effect of vesting the leasehold property in administratrix by relation, so as to enable her to bring actions in respect of that property for all matters affecting the same subsequent to the death of the intestate; and though it may also render her liable to account for rents and profits of it from the death of the intestate; yet it cannot operate by relation for a purpose perfectly collateral to the purposes abovementioned, and which is indeed, legally, an impossiblecone; viz. for the purposes of rendering her not removeable at a time past, when as far as the letters of administration are concerned, she was removeable for want of them; ..."

25. A further example of the restricted scope of the principle of relation back can be found in Fred Long & Son Ltd. v. Burgess ⁽¹¹⁾, where after the death of an intestate, the contractual tenancy of a protected dwelling house was terminated by a notice duly served on the President of the Probate, Divorce & Admiralty Division of the High Court. A son of the intestate subsequently applied for and obtained letters of administration. It was held that the doctrine of relation back could not be invoked to revive a duly terminated contractual tenancy. At page 123, Asquith L.J. rekindled the awareness of the ambit of its operation:

"It seems to me that there is much force in the contentions advanced for the landlords that the doctrine of 'relation back' must not be applied save to protect the estate from wrongful injury occurring in the interval."

26. A pre-condition highlighted by these authorities is that no disposition of an intestate's property before grant may be validated unless it can first be shown as having been for the benefit of the estate or made in due course of administration. The passages given at paragraph 736,17 Halsbury's Laws of England 4th Ed. and pages 446 and 447 of Emmet on Title, 17th Ed. are similarly expressed.

27. How then can a pre-grant disposition by an intending administrator be validated? Mr. Ching for the purchaser contended that the mere act of obtaining letters of administration is sufficient ratification of a pre-grant disposition made either for the benefit of the estate or in due course of administration. But it would seem that independent of the grant, some deliberate act of ratification is necessary.

28. Before "ratification" in the doctrine of relation back is examined more closely, I should deal with Doe d. Hornby v. Glenn ⁽¹²⁾ which seems to suggest that an intending administrator "had no power to make" any pre-grant contract as "he was no body at the time". In Doe d. Hornby v. Glenn ⁽¹²⁾, premises were leased to Preston Hornby for forteen years with a proviso for forfeiture on non-payment of rent. Some four-and-a-half years later Preston Hornby died intestate. Within twenty days, his brother Benjamin Hornby took out administration, but six days before the grant, Benjamin Hornby had orally agreed with the lessor to cancel the lease in return for a waiver of the arrears. It must be noted that no Common Law demand for rent was made; nor did the lessor take any step to re-enter. Upon taking out administration, as administrator Benjamin Hornby acted in derogation of his pre-grant surrender by tendering rent and demanding possession. The question was obviously not whether the administrator could validate his pre-grant act as Benjamin Hornby refused to honour, letting alone ratify it, but whether he was in fact bound or estopped thereby. The trial judge Taunton, J. held that the lessor was not entitled to possession under the proviso without any formal demand. It was further held that the purported oral surrender of Benjamin Hornby was not enforceable without any sufficient memorandum in writing under the Statute of Frauds. Finally, it was said that Benjamin Hornby "had no right to make it before he had taken out administration". The most salient feature is the total lack of any suggestion that the bargain was beneficial to the estate of the intestate; it was probably not as in striking contrast to a ratification, the administrator sought to challenge the surrender. The judgments on appeal are short, but the decision was on those peculiar facts of the case. Lord Denman, C.J. said:

"It would be very strong to hold that the lessor of the plaintiff was bound after he became rightful administrator, by an act of this kind done by him while he was an executor de son tort. There is no ground for a rule." (The underlining is mine)

29. Doe d. Hornby v. Glenn ⁽¹²⁾ was referred to but only on the point of estoppel in John Metters v. Brown ⁽¹³⁾, in which the plaintiff was administrator of the intestate estate of his late mother. The plaintiff had in his mother's life time mortgaged the premises, and it was held that the plaintiff was not estopped by his mortgage. At page 693, Channell, B. held:

"The second point is whether ...... the plaintiff, as administrator of his mother, is estopped by his mortgage of the premises in her lifetime ..... We think he is not. In Doe d. Hornby v. Glenn, which was cited on the argument, it was held that an agreement entered into by an executor de son tort did not bind him after he had become rightful administrator. In our opinion the plaintiff who sues as administrator of his mother, must be considered in the position of a stranger, and therefore the rule as to estoppel does not apply; for whenever a person sues, not in his own right, but in right of another, he must for the purpose of estoppel be deemed a stranger".

30. Metters v. Brown ⁽¹³⁾ is a case on estoppel and should not be taken as having exacted any general principle from what may give an appearance of a sweeping pronouncement on the power of an intending administrator in a decision made on its own peculiar facts in Doe d. Hornby v. Glenn ⁽¹²⁾.

31. It can readily be seen that the oft-quoted cases, like Long v. Hebb ⁽⁴⁾ and Whitehall v. Squire ⁽⁵⁾ were not even cited in argument in Doe d. Hornby v. Glenn⁽¹²⁾; nor was Doe d. Hornby v. Glenn⁽¹²⁾ referred to in any of the judgments in subsequent cases on the doctrine of relation back, such as Foster v. Bates ⁽⁷⁾ (although Hornby v. Glenn ⁽¹²⁾ was referred to in the argument), Tharpe v. Stallwood ⁽¹⁴⁾ (although again Doe d. Hornby v. Glenn ⁽¹²⁾ was cited in arguments at pages 768 and 769), Morgan v. Thomas ⁽⁶⁾, Hill v. Curtis ⁽¹⁵⁾, In the Goods of Elizabeth Pryse, Deceased ⁽⁸⁾, Ellis v. Ellis ⁽¹⁶⁾ and Fred Long & Son Ltd. v. Burgess⁽¹¹⁾.

32. Lastly, in volume 17 Halsbury's Laws of England 4th Ed., Doe d. Hornby v. Glenn⁽¹²⁾ appears once and only in a citation in footnote 8 to paragraph 736 merely for the proposition that an administrator is not estopped by his own act before grant.

33. Having attempted to distinguish the decision of Doe d. Hornby v. Glenn⁽¹²⁾, I turn back to the question as to how a pre-grant disposition either for the benefit of the estate or in due course of administration may be ratified. In Doe d. Hornby v. Glenn⁽¹²⁾, a repudiated agreement of an intending administrator was not upheld, and, by implication, it made ratification one of the prerequisites for validating a pre-grant disposition. of "ratification", Sir W. Page Wood, V.C. in Hill v. Curtis⁽¹⁵⁾ spoke in terms of "purging" at page 100:

34. In Re Watson Ex. Parte Phillips ⁽¹⁷⁾ is an illustration that ratification must be an act independent of the grant. The headnotes read as follows:

"In order to make the estate of a deceased person liable for services rendered whilst there is no personal representative, it must be shown, not only that the services were for the benefit of the estate, but that they were rendered under a contract with someone who subsequently by obtaining letters of administration became authorized to bind the estate, and ratified the contract."

At page 119, Wills, J. had this to say:

"The essential conditions are that there should be a contract with some person professing to act for the estate, that the contract should be for the benefit of the estate, and that the person in question should afterwards become administrator and should after being so appointed have ratified the contract."

35. Before I come to the legal effect of blending the doctrine of relation back with other known principles, I will briefly digress from the doctrine and consider the nature of the act of one of two or more personal representatives. At the turn of the last century, in Ex Parte Rigoy ⁽¹⁸⁾, Lord Chancellor Eldon unhesitantly echoed counsel's submission that "clearly one Executor might sign": "One Executor can do any act". A somewhat different aspect of the act of an executor was litigated in Sneesby v. Thorne ⁽¹⁹⁾, where an agreement for the sale of a leasehold house was signed in the names of two executors by one of them in the erroneous belief that he was acting with the authority of the other. It was held that no specific performance could be decreed by reason that the signing executor "would not have signed it if he had believed that (the other executor) would not sanction his act". The position of a sale by one of the two executors with the authority of the other of them was left open. At page 403, Lord Justice Turner comented:

"I give no opinion on the general question, whether specific performance of a contract for sale by one executor apart from his co-executor could be decreed; it will be time enough to decide that point when it arises."

36. Fountain Forestry Ltd. v. Edwards and Another ⁽²⁰⁾ is a similar case, where a contract for sale of land forming part of the estate of an intestate was expressed to be made by both administrators but signed in fact by one. The non-signing administrator so named was unwilling to complete, and specific performance was claimed. After having assented to the proposition indorsed by both counsel that section 2 (2) of the Administration of Estates Act, 1925 did not include a "contract", Brightman, J. held that "having purported to sign the contract on behalf of himself and his co-administrator, (the signatory) had warranted that he had authority to bind (his co-administrator), but that since that authority was in fact lacking there was no contract of which specific performance could be granted." Two features in Fountain Forestry are germane to the issues under consideration: First, the distinction sought to be drawn between a "contract" and a "conveyance" was readily accepted without anymore ado. The other is an assumption made by Brightman, J. that an administrator had power to bind the intestate's estate by his own act without the concurrence of his co-administrator.

37. The difference between a "contract" and a "conveyance" in the context of section 54 (1) of our Probate & Administration Ordinance may be more conveniently dealt with at this juncture. There is no definition of "conveyance" in our Probate and Administration Ordinance, and its section 54 (1) is founded on section 2(2) of the Administration of Estates Act, 1925. Section 55 (1) (iii) of the 1925 Act defines "conveyance". There is every temptation for inferring that the Hong Kong Legislature has not chosen to depart from the definition of the same word in a statute from which our section 54 (1) was transplanted.

38. Section 55 (1) (iii) of the 1925 Act reads as follows:

"'Conveyance' includes a mortgage, charge by way of legal mortgage, lease, assent, vesting declaration, vesting instrument, disclaimer, release and every other assurance of property or of an interest therein by any instrument, except a will, .............."

39. Section 54 (1) of our Probate and Administration Ordinance speaks of "conveyance". I am content to rest on the view shared by all in Fountain Forestry. In my judgment, section 54 (1) of our Ordinance does not include a "contract".

40. It is not impertinent to set out the respective arguments addressed to the Court in Fountain Forestry.

41. At page 3E/F, counsel for the plaintiffs submitted:

42. At page 5A, Brightman, J. interjected:-

"The Statute of 1357 does not speak of administrators having the same rights as executors, merely that they 'have an action to demand and recover as executors' and that they are accountable in the same way, which may suggest that the Administration of Estates Act 1925 deals with the overall definition of their powers rather than with machinery."

43. Pausing here, I cannot resist the opportunity to refer to an attempt under our Probate and Administration Ordinance, to abolish the last vestiges of the fine distinction between executors and administrators. The division of executors and administrators has been steadily eroded and has become in many ways more historical than real. Our Ordinance has finally laid to rest what has, for us, been simply a dichotomy. In section 2, a "personal representative" is defined as meaning "the executor, original or by representation, or administrator for the time being of a deceased person."

44. Returning to the contention advanced by counsel for the defendants appearing at page 6B:

"include a contract, and there is no mention of a contract in section 2(2), but it would be odd if one personal representative could enter into a contract binding upon another, but an order of court were required to execute a conveyance. No principle of law can be found, apart from the pre-1926 law as to chattels real (which is not settled in regard to co-administrators), to show that one of two co-owners can bind the other by a contract to sell land. This is certainly not so in the case of trustees, or joint tenants. Why then should personal representatives be an exception? The plaintiffs have not provided any answer to the question."

45. At page 8A/B, counsel for the plaintiffs in reply cited Smith v. Everett and continued:

"Smith v. Everett, 29 L.J. Ch. 236 (although there are discrepancies in the various reports) seems to have established that the principle that one executor can bind other executors was a principle that extended also to administrators."

46. At page 12A/B, Brightman, J. was pursuaded to assume "that one of two executors is now able to enter into a contract binding on a deceased's estate to sell freehold as well as leasehold land and pure personality belonging to the deceased at his death, although he cannot implement that contract in relation to freeholds without the concurrence of his co-executor or co-executors or a court order." Thereupon, the learned judge proceeded to consider the "difficult question" as to whether administrators were in the same shoes. At page 14A, Brightman, J. readily lent colour to a settled principle:

"It appears to me that there is no decisive authority which answers the question whether one administrator, acting without his co-administrator, has the same power of disposition as an executor acting without the concurrence of his co-executor. But having regard to the statement of Sir John Romilly M.R. that the question was settled by 1859 in favour of the administrator who acts alone, I am content to assume for present purposes that the view which he expressed was a correct interpretation of the law with the result that an administrator has power, at the present day, to bind the intestate's estate by his own act without the concurrence of his co-administrator."

47. Reference has been made to the assimilation of executors and administrators under our definition of "personal representative". The separate reviews on executors and administrators by Brightman, J. has, therefore, no special significance.

48. In my view, in section 54(3) of the Probate & Administration Ordinance lies our very effort to codify the position of an executor or administrator acting alone, which is said, even for the latter, to have been settled by 1859.

49. I have compared section 25 to section 31 of the Administration of Estates Act 1925 under the heading "Duties, Rights and Obligations" with part V of our Probate and Administration Ordinance under the heading of "Powers, Rights, Duties and Obligations of Personal Representatives". The additional subject-matter, "powers", dealt with in Part V is brought in under section 54. I have also compared Part III of the Administration of Estates Act 1925 under the heading of "Administration of Assets" with Part VI of our Probate and Administration Ordinance which bears the same heading. It may be of interest to note that section 37 of Administration of Estates Act 1925, which has not been incorporated in our Ordinance, deals with a conveyance which has previously been made. Turning to section 65 of our Probate and Administration Ordinance, it can readily be seen that section 65(1) is concerned with a subsisting contract. Our section 65(1) regulates the conduct of a personal representative coming into an estate saddled with a contract rather than the exercise of a power. For personal representatives, s.54 in Part V of our Ordinance deals, in the words of Brightman, J., "with their power rather than with machinery". The machinery for administration of assets is provided for by Part VI.

50. I have commented on section 54(4). That subsection and section 65(1) of our Probate and Administration Ordinance are provisions which bristle with difficulties. Their proper construction should best be postponed to a more appropriate proceeding. But in my judgment, section 54(3) has successfully codified the position of a personal representative acting alone, be he an executor or an administrator, and empowers an administrator to enter into a contract binding on the estate thus his co-administrator.

51. It has been demonstrated with, I hope, reasonable clarity that the contract of an administrator can bind the estate under section 54(3) of the Probate and Administration Ordinance. If an estate can be so bound by a contract entered into by a single administrator, there is no conceivable reason why the estate should not be bound by his ratified contract. It is axiomatic that one man's ratified act would require no other ratification than that of his very own. If an administrator can contract independently, circumstances permitting, he can certainly ratify independently. It is true that under section 25(1), at least two administrators are required in the case of an minority interest, but it has never been doubted that the administrators of an estate involving minority interests have but the same capacity and attributes as those of any other administrators. In conclusion, there can be no reason why a ratified contract of one of the two administrators of an intestate's estate involving minority interests should not bind the estate, hence his co-administrator. I am of the opinion that it does. The final link is that the binding agreement has to be implemented by a conveyance to be executed by all the personal representatives as required by s. 54 (1) of the Ordinance.

52. Adverting to the facts in these proceedings, the estate was heavily indebted with the added liability of estate duty. The said Agreement for Sale and Purchase was expressed to be signed in due course of administration. There has been no evidence to the contrary. The sale was bona fide and for a consideration commensurate with the then current market price. The plaintiff was obviously aware of minority interests. If he had ever laboured under the erroneous impression (there is no evidence for it) that he was signing the contract as the sole beneficiary, it would have been no better than a unilateral mistake which equity would not come in aid. See Fry on Specific Performance (1921), 6th Ed. paragraph 410 at pages 195/196 and Snell's Principles of Equity, 27th Ed. pages 597/598.

53. Clause 17 of the said Agreement for Sale and Purchase providing for an extension in the event of delay in obtaining a grant is not unusual, and it is a far cry from an option to purchase at a fixed price, exercisable within a protracted period of 7 years as that in the case of Oceanic Steam Navigation Company v. Sutherberry⁽²¹⁾. In my view, Clause 17 cannot in any way be objectionable.

54. Letters of administration were granted to the plaintiff and the 1st defendant on the 4th January 1980. By a letter dated the 16th January 1980, through his then solicitors, the plaintiff informed the purchaser's solicitors that he was desirous of completing the sale of the property in question. By letters all dated the 29th January 1980, through his same solicitors, the plaintiff communicated with his co-administrator and the other beneficiaries under the intestacy of his deceased wife and endeavoured to rally support for the intended completion of the said Agreement for Sale and Purchase. In these proceedings, the plaintiff seeks to have the said Agreement for Sale and Purchase confirmed and approved. There have been ample acts of ratification after grant on the part of the plaintiff.

55. In conclusion, I am of the opinion that the said Agreement for Sale and Purchase binds the estate and the co-administrator, the 1st defendant, who can be compelled to join in for completion.

56. The price differential cannot be an overriding consideration. The plaintiff as head of the household has had no desire to expose his conduct to criticism. The transaction was entered into at arm's length, on proper advice and for an adequate consideration. The sale was then for the benefit of the estate and in due course of administration. The plaintiff would not wish to be thought of as being, in any way, dishonourable. The Court must, in these circumstances, balance matters and should be loath to incur the reproach of being the destroyer of bargains. Therefore, if I am wrong on the construction of section 54(3) and the understanding of the general law relating to acts by an intending administrator in an estate involving minority interests, I would be prepared in the circumstances to order execution of a conveyance in terms of the said Agreement for Sale and Purchase under section 54(1).

57. It is quite unnecessary for me to consider prayer (2): I am grateful to both counsel for the assistance that they have generously given me, and it is no discourtesy to Mr. Miller's organized argument that I do not propose to deal with the second prayer at any great length. I have been referred to Bain v. Fothergill⁽²²⁾ and Malhotra v. Choudhury⁽²³⁾. Clause 4 of the said Agreement for Sale and Purchase contains provisions for inter alia an objection to title or conveyance as well as a defective title. If I came to the conclusion that the sale could not, for any reason, be completed, I would feel disposed to hold that the plaintiff has used his best endeavours to fulfil his contractual obligation and that his failure falls within the wide provisionsof clause 4 of the said Agreement for Sale and Purchase; in which event I would feel justified to make the declaration sought in prayer (2) of the originating summons.

58. I will now entertain submissions on the necessary and consequential directions to be given for the completion of the sale under the said Agreement for Sale and Purchase and on the question of costs.

Representation:

Mr. Michael Miller, Q.C. with Mrs. Le Pichon instructed by David Y.Y. Fung for Plaintiff.

Mr. K. Bohkary instructed by C.P. Lin for 1st Defendant.

Mr. Charles Ching, Q.C. with Mr. Kenneth Kwok instructed by P.K.H. Wong for 2nd Defendant.

(1) See Land Transfer Act, 1897, s.2(2).

(2) See generally p. 640, Williams on Executors, 15th Ed.

(3) See generally p. 613, Williams on Executors, 15th Ed.

(4) (1652) Sty. 341

(5) [1703] 1 Salk. 295

(6) [1853] 8 Exch. 302

(7) (1873) 12 M. & W. 226

(8) [1904] P. 301

(9) (1603) 5 Co. Rep. 28b

(10) 8 East. 405

(11) [1950] 1 K.B 115

(12) [1834] 1 Ad. & E1. 49

(13) [1863] 1 H. & C. 686

(14) (1845) 5 M. & Gr. 760

(15) [1865] D.R. 1 Eq. 90

(16) [1905] 1 Ch. 613

(17) (1886) 18 Q.B.D. 116

(18) (1815) 19 Ves. 463

(19) (1855) 7 De M. & G. 399

(20) [1975] 1 Ch. 1

(21) [1880] 16 Ch. D. 236

(22) [1874] L.R. 7 H.L. 158

(23) [1980] 1 Ch. 52