Wang Din Shin v. Nina Kung

Case No.HCAP 8/1999

Court

High Court CFI

Date20 Aug 2004

Judge—

Case Document

100%Judiciary

HCAP000008C/1999

HCAP8/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE JURISDICTION ACTION NO. 8 OF 1999

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IN THE MATTER OF THE ESTATE OF WANG TEH HUEI

BETWEEN
	WANG DIN SHIN	Plaintiff

	AND

	NINA KUNG alias NINA T.H. WANG	Defendant

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Coram: Hon Chu J in Chambers

Date of Hearing: 22 & 23 April 2004

Date of Judgment: 20 August 2004

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DECISION

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1.This is the application of the Joint Administrators pendent lite ("the Administrators") by summons to adjourn the defendant's application to remove the Administrators until after the final determination of the probate proceedings and the appeals therefrom, and for directions on the capacity in which the defendant makes the removal application and also the scope of the defendant's application.

Background

2.The brief background relevant to the present application had been set out in paragraphs 3 to 10 of my decision in these proceedings handed down on 31 December 2003 in connection with the defendant's recusal application. I will not repeat it here.

3.Paragraphs (i) to (iii) of the defendant's summons issued on 25 September 2003 had been disposed of. The only paragraph in the summons that is outstanding is paragraph (iv). It reads:

"that, TAN MAN KOU and CHEUNG YAT MING, the Joint Administrators pendite lite of the estate of Wang Teh Huei ("the Estate") respectively appointed by the Orders herein dated 15 March 2000 and 26 June 2001 be removed with immediate effect in the interests of the Estate and by reason of their conduct in their administration thereof, and be replaced by such other person(s) as the Court may deem fit."

The Administrators' summons

4.On 7 November 2003, the Administrators issued the present summons. Paragraph 1 seeks an order that:

" the Defendant's application by paragraph (iv) of her summons dated 25 September 2003 to remove the Administrators ("the Discharge Application") be adjourned, and no further directions be given in relation to the hearing thereof, until the final determination of this Probate action and all appeals there form (such that the entitlement to the Estate has been finally established)".

5.Paragraphs 2 to 5 of the Administrators' summons seek the following directions:

"2. the Defendant may only bring the Discharge Application in her capacity as a potential beneficiary of the estate;

3. the Defendant is not entitled to bring the Discharge Application in any other capacity, for instance as a shareholder in companies with which the estate is connected or with which it has (or has had) dealings;

4. in bringing the Discharge Application the Defendant may only advance arguments and adduce evidence as to the effect of the administration of estate in her capacity as a potential beneficiary;

5. the Defendant is not entitled to advance arguments or adduce evidence as to the effect of the administration of estate on her in any other capacity, for instance as a shareholder in companies with which the estate is connected or with which it has (or has had) dealings (or as to the effect of the administration on any other person)".

6.At the time of the hearing of the present summons, the decision on the defendant's appeal against the judgment of Yam J in the probate action was pending. Since then, the Court of Appeal had in a judgment handed down on 28 June 2004, dismissed the defendant's appeal. The defendant has since lodged an application for leave to appeal to the Court of Final Appeal.

7.Broadly speaking, the Administrators' summons has two parts. The first is an application for an adjournment of the defendant's application to remove the Administrators ("the Removal Application"). The second is an application for directions restricting the capacity in which the defendant brings the Removal Application and the scope of the Removal Application.

8.It is the Administrators' case that their summons is driven by their concerns over the effect of the Removal Application on the due and proper administration of the estate. The Administrators are of the view that the defendant's Removal Application is not brought in the interest of the estate. Three main reasons are advanced. Firstly, it is pointed out that in view of the very voluminous and extensive affirmation evidence filed by the defendant, it would take considerable time and costs to properly respond to it. This would mean holding up the Administrators and diverting the estate's resources from pursuing the administration to defending the Removal Application. Secondly, it is said that there is no practical purpose to bring the Removal Application at such a late stage in the administration. The appointment of the Administrators and their administration would cease with the conclusion of the appeal to the Court of Final Appeal. It is unlikely that the Removal Application and any appeals therefrom would be concluded before the final determination of the probate proceedings, and the defendant is unlikely to obtain the relief she seeks in the Removal Application. Thirdly, and in the Administrators' view most importantly, insofar as the defendant's main and underlying complaints are made in her capacity as shareholder in companies in some of which the estate has an interest, the Removal Application is to protect her personal interests, which is adverse to the interest of the estate.

9.The plaintiff supports the Administrators' summons.

10.The defendant has criticised the Administrators for issuing the summons. It is firstly said that the Administrators should have adopted a neutral passive and limited role in the Removal Application. It is also said that to the extent that the Administrators are defending themselves s against the adverse allegations made against them and their own professional reputation and integrity but at the expense of the estate, their personal interest is in conflict with that of the estate. I do not agree that, in issuing the summons, the Administrators a rein a position of conflict. For reasons that I will explain in the latter part of this Decision, I do not consider that the Administrators' personal interest is engaged in the present summons because it is in the interest of the estate to bring the application to adjourn the Removal Application and to limit the capacity in which the application is brought and the scope of the application.

11.The defendant also says that by the adjournment application, the Administrators are seeking to avoid the scrutiny of the court, and to ensure the continuation of a lucrative income for themselves and their firms. No evidence has however been adduced to support these serious allegations. In any event, given that the Administrators are officers appointed by the court, their conduct in the administration of the estate is constantly subject to the scrutiny of the court. At the end of the administration, their conduct will also be subject to the scrutiny of the person who is ultimately entitled to the estate.

12.A third criticism made by the defendant is that the summons was issued without the sanction or approval of the court. To the extent that the Administrators' present application does not engage them in any conflict of interest, there is no necessity for the Administrators to obtain leave before issuing the summons. The Administrators are not instituting a piece of litigation, but are defending or taking a step in proceedings initiated by the defendant against them. There is also no practical purpose in having the Administrators applying ex parte or inter partes in the administration proceedings for leave to issue the summons.

The defendant's capacity and interests in
bringing the Removal Application

13.A pivotal point in the Administrators' applications relates to the capacity and interests of the defendant in bringing the Removal Application. It is therefore convenient to deal with this before turning to the specific applications.

14.In understanding the capacity in which the defendant brings the Removal Application and the interest that she is pursuing by the application, it is necessary to look at the main grounds in support of the Removal Application, which had been set out in the 13th affirmation of the defendant. I had summarised them in paragraph 17 of my decision of 31 December 2003 as follows:

(1) Interference issue

It is said that the Administrators have mis-used their position as shareholders in a number of companies in which the estate is interested to interfere with the management of these companies.

(2) Abuse issue

The manner of the Administrators' intervention is said to be abusive and offensive, and has also wasted valuable time of the senior management of the companies involved.

(3) Conflict of duty issue

It is said that Administrators' duties to the estate are in conflict with their duties as directors of the companies in which the estate is beneficially interested.

(4) Competence issue

The Administrators are criticised as being not experienced to manage a substantial real property development business.

(5) Wilful blindness issue

In seeking appointment to the board of directors of Chime Corporation and its subsidiaries, the Administrators are said to have acted in wilful disregard of the judgments of Deputy Judge Gill and the Court of Appeal made on 14 December 2001 and 31 July 2002 respectively.

(6) Justification issue

The defendant considers that no justification exists for the Administrators' invention in the management of the companies.

(7) Break up issue

The five major pieces of litigation brought by the Administrators are unnecessary pending the final resolution of the probate action, and have unravelled the interconnections between the companies within the Chinachem Group. The defendant complains that the Administrators have acted unreasonably and not even-handedly and are causing harm to her and the estate.

(8) Control issue

In maintaining the litigations, the Administrators are not under any costs sanction. At the same time, their activities had generated substantial costs. The defendant considers that the costs and expenses of the Administrators are of such magnitude that gives cause for serious concerns.

15.It is not in dispute that the defendant brings the Removal Application both in her capacity as a potential beneficiary of the estate and as a substantial shareholder in the many companies in which the estate has an interest, some of which are said to be in an adversarial relationship with the Administrators.

16.Apart from the issue of conflict of interest and the complaint on the costs of the administration, which may be relevant to her capacity as a potential beneficiary of the estate, all the other grounds in support of the Removal Application are made in the defendant's other capacity.

17.It is also evident that the defendant's major complaints against the Administrators are the litigations that had been instituted on behalf of the estate against the companies in which the defendant is personally interested in, and the effect the litigations have or may have on what she calls the "Chinachem Group" of companies and what has been described as the "Treasury System" for these companies. This is set out under the "break up issue" in her 13th affirmation (paragraph 75) where she states that the object of these litigations is "to unravel and separate the interconnections between the companies within the Chinachem Group", and that this is likely to "cause enormous damage to the Group as a whole and hence to my interest in it". Further on in the affirmation (paragraph 78), the defendant complains that the Administrators in performing their functions have adopted a policy and practice that "pays no regard to my separate interest".

18.The point that the defendant's dominant interest in bringing the Removal Application is her separate interest as a shareholder is highlighted and confirmed by her legal representatives. In a letter dated 11 October 2003, her solicitors refuted the suggestion that the Removal Application was brought late by saying that the main ground of the defendant's complaint is that the Administrators "have caused unnecessary, unjustified and irreparable harm to her independent interests which require separate consideration from her interests as a potential beneficiary", and that the defendant is entitled to have her complaint concerning her separate interests heard by the court regardless of the timing or disposition of the appeal in the probate action.

19.At the direction hearing for the defendant's summons on 15 October 2003, Mr Carr QC further confirms that the Removal Application relies largely on the defendant's "separate interest in respect of her shareholding in the business in which she holds shares", and the "major interest which she complains is being damaged is her separate interest as ... a substantial shareholder in many dozens, hundreds of companies in which the estate is interested". He explains that the defendant's separate interest is engaged because if the Administrators continue to pursue the present course, the defendant will suffer enormous financial loss through the sale of real property assets in which she is, through her shareholdings, substantially interested, and "that has nothing to do with her potential interest as a beneficiary".

20.The issue that arises is whether the defendant is entitled to or should be permitted to pursue or protect her separate interest in these administration proceedings and by way of the removal of the Administrators. In my view, the answer is plainly in the negative for three reasons.

21.Firstly, as indicated by the marginal note of the defendant's summons, the Removal Application is made under section 33 of the Probate and Administration Ordinance, cap.10 ("POA"). Section 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."

22.Under section 33(3), the court's discretionary power to remove administrator is only to be exercised for the due and proper administration of the estate and having regard to the interests of the persons beneficially entitled to the estate. The reference to "persons beneficially entitled thereto" in the context must mean beneficiaries and potential beneficiaries of the estate.

23.Mr Carr QC has in his submissions doubted whether section 33(3) of POA applies to the removal of an administrator pendent lite. Section 2 of the POA defines an "administrator" as "a person to whom administration is granted". Both section 33 and section 40 that deals with the appointment of administrator pendent lite, come under Part III on granting and revocation of probates. There is no justification for construing section 33(3) as not applying to an administrator pendent lite merely because section 33 comes before section 40. In my view, there is no doubt that the statutory power to remove an administrator extends to an administrator pendent lite. It follows that in the removal of an administrator pendent lite, the interests that the court can properly have regard to is that of the beneficiaries and potential beneficiaries of the estate.

24.The plaintiff argues that in the light of the judgment of Yam J (which the Court of Appeal had upheld), the defendant has no right to bring the Removal Application. In my view, the proposition that the defendant is a mere contingent beneficiary and therefore lacks the necessary locus to seek a removal of the Administrators is an interesting one that may require closer and more in-depth analysis of the law. It is not necessary for the present purpose to resolve it and I do not intend to do so.

25.Secondly, it is argued on behalf of the defendant that section 33(3) does not stipulate who may apply for a removal and the court's power under its inherent jurisdiction to remove the Administrators, who are officers appointed by the court, ought to be more flexible. It is submitted that the defendant is entitled to assert her separate and distinct interest as a co-shareholder or partner of the deceased and to seek the removal of the Administrators on account of their conduct in the administration. The defendant argues that the common law recognises that administrators owe a duty not only to the estate, but also to others with whom they are in a relationship of proximity. It is said that in the proper administration of the estate, the Administrators owe the defendant a duty of care not to injure her separate personal interest in the companies that the estate also has an interest.

26.In Deloitte & Touche AG v. Johnson [1999] 1 WLR 1605, the Judicial Committee of the Privy Council moved to dismiss the appeal of a debtor of a company in liquidation whose application to remove the liquidators on the ground of conflict of interest had been struck out. It was held that only the creditors, to whom the liquidators owed a duty, had a legitimate interest in complaining of a conflict of interest, and that even of the debtor had an interest in making the application and might be affected by the result, he had no legitimate interest in the identity of the company's liquidators or in the relief sought. Lord Millett, giving the judgment of the Judicial Committee, said (at 1611D-E):

"Where the court is asked to exercise a statutory power, therefore, the applicant must show that he is a person qualified to make the application. But this does not conclude the question. He must also show that he is a proper person to make the application. This does not mean, as the plaintiff submits, that he "has an interest in making the application or may be affected by its outcome." It means that he has a legitimate interest in the relief sought. Thus even though the statute does not limit the category of person who may make the application, the court will not remove a liquidator of an insolvent company on the application of a contributory who is not also a creditor: see In re Corbenstoke Ltd (No. 2) [1990] BCLC 60."

27.Although Deloitte is case on liquidation and removal of liquidators, the reasoning and the holdings apply with full force to the present case. Clearly, the jurisdiction under section 33(3) of POA is intended for a person who is beneficially entitled to the estate and whose interest is identified with that of the estate. As the reasoning in Deloitte shows, only a person who has a legitimate interest in the identity of the administrator and in the relief sought is entitled to seek the removal of an administrator of an estate. This is so irrespective of whether the removal is sought under the statute or the court's inherent jurisdiction.

28.Accordingly, even if the Administrators do, as the defendant contends, owe her a duty of care by reason of proximity of relationship (a contention that the Administrators do not accept and I need not decide in this application), it does not mean that she is entitled to bring the Removal Application in reliance on, or to protect, her separate personal interests. This is because in that separate capacity, the defendant is a stranger to the estate and she has no right or interest in the identity of the administrators of the estate. If indeed her separate interest as a shareholder or partner had been harmed, her remedy would be in damages or in an order of injunction. But she cannot in that capacity apply in the administration proceedings for a removal of the administrators. Indeed, the authorities cited to me do not support such a course. It is also to be noted that before bringing the Removal Application, the defendant had sought to stop the Administrators by seeking a stay in the proceedings brought by the Mighty group of companies, but failed.

29.Mr Carr QC has in the course of his submissions suggested that the Administrators owe a fiduciary duty to the defendant in her capacity as shareholder in the companies in which the estate has an interest and companies within the Chinachem Group. He has not developed the point and it is not clear what is the basis for it. But even if it could be said that the Administrators were in breach of their fiduciary duty to the defendant and had caused her loss, it does not follow that she has an interest in the identity of the administrators and has a legitimate interest in seeking a removal of the Administrators from the administration of the estate. Her remedy would still be in damages and/or injunctive relief.

30.Thirdly, I do not accept the submission that, insofar as the defendant holds shares in her own right in the companies within the Chinachem Group, her interest coincides with that of the estate. Not only does the defendant's separate personal interest as shareholder or partner not coincide with that of the estate, it is in fact adverse to the interest of the estate.

31.In the first place, the estate is litigating against the defendant and some of the companies within the Chinachem Group in which the defendant is a substantial shareholder. They are hostile litigations.

32.Further, on the defendant's own case, not all the companies within the Chinachem are companies in which the estate has an interest. For instance, the defendant has asserted that Chinachem Agencies Limited ("CAL"), the company that assumes a key position in the Treasury System, is wholly owned by her. On the Administrators' analysis, the seven largest creditors of CAL are all companies in which the estate is beneficially interested whereas the seven largest debtors of CAL are companies that the defendant says do not form part of the estate. It will also appear from the evidence that the estate companies are net creditors of CAL in the amount of approximately $4.25 billion while the non-estate companies are net debtors in an amount of $5.4 billion. Hence, whereas the maintenance of the Treasury System is regarded by the defendant to be beneficial to her separate personal interest, it is, from the estate's point of view, to the benefit of the estate to collect its assets and have the advances to CAL repaid, which the defendant claims will cause a dismantling of the Treasury System.

33.The defendant says that dismantling the Treasury System will also harm the estate because it will lead to a forced sale of substantial and valuable assets. It is submitted that if CAL had to repay substantial advances made to it by the estate companies, it would have to look to other companies to whom CAL had made advances, including subsidiaries of estate companies. These companies would have to realise assets at depressed prices. If this happened across the spectrum, the whole group would be broken up. At the same time, the parent estate companies would also suffer loss. In Mr Carr QC's submission, references to net credit or net loan position do not address this concern because it wrongly assumes that the debts and advances can be set-off, and ignores the position of the individual companies in which the estate is interested.

34.This submission is advanced in the context of the contemplation to wind up Parasia Limited, which is a substantial creditor of CAL. The suggestion of a fire sale scenario in the case of Parasia Limited or the Parasia group is not borne out by the evidence before the court. Among other things, the Administrators' evidence is that the company and the group are solvent.

35.In the general context, the fact that the estate is a net creditor cannot be said to be of no or little relevance. As Mr Moger QC submits, even if there were the doomsday scenario portrayed by the defendant, the estate will not be the loser because it is a net creditor in a very substantial amount. It is also important to bear in mind that there is very little evidence before the court about the substantial and valuable assets alluded to in Mr Carr QC's submissions, or what assets are there to meet the estate's demands for repayment.

36.In my view, the defendant's assertion that her interest as a shareholder of the companies within the Chinachem Group coincides with that of the estate cannot be sustained without showing what benefits the estate stands to gain by maintaining the Treasury System. It is not good enough to say that it is not necessary for the preservation of the estate to dismantle the Treasury System or that there is no risk to the $4.25 billion owed by CAL to the estate. This is because a legitimate and vital aspect of the administration is to get in and collect the assets of the estate. The Administrators' duty in this regard is not dependent upon whether the assets are at risks, although this is a material consideration for an application to appoint receivers. Accordingly, the continuation of the contributions and advances from the estate companies to CAL and other non-estate companies within the Chinachem Group can only be justified if there are distinct benefits to the estate in not seeking immediate repayments. The defendant's evidence however does not reveal any such justification.

37.The fact that the defendant's separate personal interest is opposed and adverse to that of the estate is an important reason that dis-entitles her to bring the Removal Application in pursuit of that separate interest. In the capacity as shareholder or partner, the defendant does not have any legitimate interest in seeking the removal of the Administrators from the administration. Accordingly, the defendant cannot bring the Removal Application in any capacity other than as a potential beneficiary of the estate.

The adjournment application

38.I turn now to deal with the specific applications in the Administrators' summons.

39.On the application to adjourn the Removal Application until after the final determination of the probate proceedings and the appeals therefrom, there is no issue that the court does have the power to do so under its inherent jurisdiction: see section 12(2) of the High Court Ordinance, cap. 4.

40.In the defendant's analysis, the application is tantamount to a stay. This is because with the final determination of the probate action and the appeals therefrom, the office of the Administrators will also come to an end by operation of law. In this sense, the Removal Application may never get to be heard. The Administrators do not take issue with this analysis. It is accepted that if the application to adjourn is granted, it will have the effect of avoiding the estate ever becoming embroiled in the Removal Application.

41.In Abraham v. Thompson [1997] 4 All ER 362 at 374, Potter LJ said:

"In my view, the starting point in any case where a stay is sought in circumstances which are not provided for by statute or rules of court, should be the fundamental principle that in this country an individual (who is not under a disability, a bankrupt or a vexatious litigant) is entitled to untrammelled access to a court of first instance in respect of a bona fide claim based on a properly pleaded cause of action, subject only to the sanction or consideration that he is in peril of an adverse costs order if he is unsuccessful, in respect of which the opposing party may resort to the usual remedies of execution and/or bankruptcy if such order is not complied with. This principle is of course subject to the further proviso that, if the court is satisfied that the action is not properly constituted or pleaded, or is not brought bona fide in the sense of being vexatious oppressive or otherwise an abuse of process then the court may dismiss the action or impose a stay whether under the specific provisions of the rules of court or the inherent jurisdiction of the court."

42.It is also the defendant's submission that access to court is a fundamental right recognised not only by the common law, but also by the Bill of Rights (Article 10) and the Basic Law (Article 35), and that the application to adjourn is to refuse access to the court permanently in relation to the complaints against the Administrators and the relief of their removal.

43.The Administrators have no disagreement with the approach set out in the above passage of Potter LJ. It is also accepted that the court ought to give careful consideration to the adjournment application in order to be satisfied that it is just to grant the order. The Administrators however do not agree that their application to adjourn has the effect of denying the defendant access to court.

44.In my view, the paramount consideration in deciding whether the Removal Application should be heard now or be adjourned must be the interests of the estate. The defendant's interests, to the extent that it does not coincide with or is adverse to the interests of the estate, will have to be disregarded. In addition, unlike the authorities cited by the defendant, this is not a case where the defendant is suing to enforce a legal right or a cause of action. This is also not a case that the defendant will be deprived of her due remedies under the law. If in the end, her claim to be the beneficiary of the estate is upheld, and if she considers that the Administrators have failed in their duties and/or that the estate has not been properly administered, she has a remedy in law against the Administrators. She will not be deprived, let alone permanently deprived, of her right of access to court.

45.The Administrators justify their application for adjournment on two broad bases. The first is that the Removal Application is unlikely to serve any practical purpose. The second is that it is not in the interests of the estate or the beneficiaries to proceed with the Removal Application, and there are serious doubts as to the defendant's motives in bringing the Removal Application.

46.The point about the utility of the Removal Application is a short one. It is fairly obvious, and the defendant's solicitors appear also to accept, that the Removal Application will take a while before it is ready for hearing. It is also likely that he decision on the application will be subject to the appeal process, irrespective of the outcome. Assuming that the defendant can obtain leave to appeal to the Court of Final Appeal against the judgment of the Court of Appeal, it is highly likely that the appeal in the probate action will be concluded before there is a final determination of the Removal Application.

47.The defendant has not really disputed this. She however says that it is brought about by the dilatoriness of the Administrators. The Administrators dispute this assertion and have dealt with this on affidavit and in submission in some details. It is not necessary for the present purpose to examine the point at length, suffice it to say the suggestion that the Administrators are guilty of procedural delay is not made out by the evidence. In any event, it does not explain why the Removal Application was brought late in the day. It also does not address the point that proceeding with the Removal Application is unlikely to serve any practical purpose.

48.Mr Carr QC has sought to meet the point by suggesting that there is a possibility that a re-trial of the probate action may be ordered. But if this were to happen, there is no reason why the defendant will not apply to vary the order of adjournment on the basis of a material change of circumstances. In my view, the possibility of an order of re-trial is not an answer to the point that the Removal Application serves no practical purpose.

49.As to the contention that it is not in the interest of the estate to proceed with the Removal Application, it cannot be seriously disputed that the Administrators will be required to devote substantial time, expenses and resources in order to properly meet the Removal Application. To say the least, the defendant's affirmation leading the Removal Application runs up to 155 pages together with a further 15 arch-lever files of documentary exhibit. It will be a costly and time-consuming exercise to respond to it.

50.The administration of the estate is in an advanced stage. Several pieces of hostile litigation are on foot. The administration, especially the attempt to collect the assets of the estate, has not been a straightforward one. The resources of the estate are not unlimited. It is presently, to the defendant's knowledge, cash strapped. The work of the Administrators has not been paid for some time.

51.The Administrators' concern that to deal with the Removal Application will mean a serious diversion of attention and resources from the ongoing administration, hence a disruption and suspension of the administration is therefore a real and justified one. Further, if indeed the probate action were to conclude before the final determination of the Removal Application, the costs and effort incurred will become wasted. The defendant argues that the costs incurred by the estate will be met by either the Administrators or the defendant, depending on the outcome of the application. As pointed out by the Administrators, even if this is the case, the estate will still have to pick up those costs that cannot be recovered. In this way, the estate will become smaller than would otherwise be the case. There is also the question of finding resources to finance the estate in the meantime.

52.It is certainly not in the interest of the estate to divert the Administrators from their primary tasks of collecting and preserving the assets of the estate. Further, given that the estate is litigating against the defendant and entities in which she has an interest, it is not an unfair submission to say that the defendant stands to benefit from a diversion of the Administrators' tasks in getting into the assets and the administration of the estate.

53.To proceed with the Removal Application at a time when the defendant's beneficial entitlement to the estate has yet to be established also creates difficulties for the estate. Most of the litigations complained of by the defendant were brought with leave of the court. In defending the propriety of their conduct in instituting the proceedings, it may become necessary to resort to the confidential materials they had used in obtaining the court's sanction, which the court had ruled that the defendant was not entitled to access. There are also other confidential materials in the form of the Administrators' reports, and documents subject to professional privilege. The Administrators will therefore face the dilemma of whether to disclose the confidential materials when disclosure will damage the estate's interests in view of the hostile litigations between the estate and the defendant, or to withhold the confidential information whereby prejudicing the opposition to the Removal Application. Although the difficulties will to some extent be lessened if the defendant only makes the Removal Application in her capacity as potential beneficiary and not to pursue her separate personal interest, the dilemma may arise in connection with the complaint over the costs of administration.

54.Another important factor that the court must consider in deciding the adjournment application is the timing of the Removal Application. As noted above, it was brought very late in the day. Most of the matters that the defendant complains of took place more than a year before the Removal Application was brought. The defendant has not explained he delay. She has also not shown any urgency in bringing or continuing with the Removal Application at this point in time. It would appear from the defendant's solicitors' letter and the defendant's 13th affirmation that it is because of the threat she perceives in relation to the Treasury System and the Chinachem Group that causes the defendant to bring the Removal Application. As noted above, this is not a legitimate interest that will entitle her to the relief sought. In her capacity as the potential beneficiary, the defendant has complained about the fees and expenses of the administration. But it is not her case that it is so intolerable or that the estate is at risk to such an extent that there is an urgent need to remove the Administrators. It is doubtful whether the complaint of excessive costs by itself necessitates the removal of the Administrators at such an advanced stage of the administration. The plaintiff, who as the judgment of Yam J stands, is the beneficiary of the estate, is of the view that it is not in the interest of the estate to remove the Administrators at such advanced stage.

55.Having regard to the substantial costs required to deal with the Removal Application, the likely disruption to the ongoing administration, the delay and the lack of urgency in bringing the Removal Application, the problems associated with the confidential materials, it will not be in the interest of the estate for the Removal Application to proceed. At the same time, it would appear that the Removal Application is more for the purpose of promoting the defendant's separate personal interest than for advancing the interest of the estate. In the circumstances, and weighing the prejudice that may occasion to the defendant as a result of adjourning the Removal Application, which is minimal, I am of the view that it is just to adjourn the Removal Application on the terms sought in paragraph 1 of the Administrators' summons.

56.The Administrators' also argue, as a ground for the adjournment application, that the grounds for the Removal Application are extremely weak. I do not wish to pre-judge the Removal Application. In the light of my conclusion that it is not in the interest of the estate to proceed with the Removal Application, it is not necessary to resolve the point about the merits of the application.

Paragraphs 2 to 5 of the Administrators' summons

57.I have in dealing with the capacity in which the defendant brings the Removal Application concluded that it is not permissible for the defendant to seek the removal of the Administrators in her capacity as shareholder or partner of the companies in which the estate had an interest and/or to pursue her separate personal interest in those companies. It follows that the estate should not be burdened with complaints over the effect of the administration on the estate on the defendant's rights and interests other than those of a potential beneficiary of the estate. Therefore in principle, the Administrators are entitled to the directions sought under paragraphs 2 to 5 of their summons if the Removal Application were to proceed.

58.However, as indicated by Mr Moger QC, if I decide, which I do, in favour of the adjournment application, it is not necessary to make directions on the capacity in which the defendant is permitted to maintain the Removal Application and/or the scope of the application.

Conclusion

59.For the reasons stated above, I grant an order in terms of paragraph 1 of the Administrators' summons. As it is not necessary to make any direction as sought under paragraphs 2 to 5 of the summons, I make no order on those paragraphs. The normal practice of costs follow event should apply. I therefore make an order nisi that the defendant pays the plaintiff and the Administrators the costs of the application, to be taxed in the case of the Administrators on an indemnity basis, if not agreed. The Administrators' own costs are to be paid out of the estate on the trustee basis.