Tsang Pei Ying Grace and Another v. Kan Sau Lan

HCAP 1/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. HCAP 1 OF 2007

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BETWEEN

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Coram : Master J. Wong in Chambers

Date of Hearing : 3 September 2007

Date of Decision : 2 November 2007

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D E C I S I O N

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Application

1.This is an application by the Plaintiffs under Order 15 rule 15 and Order 20 rule 5 of the Rules of the High Court (“RHC”) as well as the inherent jurisdiction of this Court for, inter alia, that:

“	1.	the Plaintiffs be appointed as the persons to represent the Estate in this action upon such terms and conditions as this Honourable Court thinks fit;
	2.	in consequence of paragraph 1, the Plaintiffs do have leave to amend the Writ of Summons filed herein so as to incorporate the additional capacity under which the Plaintiffs are suing in this action and/or to join any other beneficiaries of the Estate who do not consent this application;
	3.	……”

Background

2.Mr. Tsang Ma Ming (“the Deceased”) died intestate in a traffic accident in PRC on 13 September 2004.

3.The Defendant is the lawful widow and relied of the Deceased.

4.As the matter has developed, including having DNA tests performed, it is now not disputed that the Deceased has the following issues.

(a)	Tsang May and Tsang Michelle Pui Man, lawful and natural daughters of the Deceased and the Defendant.
(b)	Zeng Zifan, minor, natural son of the Deceased and Madam Huang Yanfang.
(c)	Tsang Pei Ying Grace and Tsang Chi Yeung Henry, the Plaintiff, both minors and natural children of the Deceased and Madam Xu Hong.

5.On 18 January 2007, the Plaintiffs commenced the present proceedings against the Defendant.  It was said, subject to further investigation, the Deceased had left an estate (“the Estate”) of landed properties in the sum of $18.9 m.  The Defendant knew or ought to have known the Plaintiffs’ interest in the matter.  However, she committed various wrongful acts, including intermeddling and misappropriating the Estate as well as neglecting or denying the rights of the Plaintiffs.  She was therefore unfit to be the administratrix of the Estate.

6.The Plaintiffs claimed against for the Defendant for:

“	(1)	An order that the Plaintiffs be appointed as the persons to represent the Estate in this action upon such terms and conditions as this Honourable Court thinks fit;
	(2)	An order that the grant of letters of administration of the Estate be made to a trust corporation registered under the Trustee Ordinance (Cap. 29) or alternatively, two senior solicitors practicing in the Hong Kong Special Administrative Region and recommended by the Law Society of Hong Kong, upon such terms and conditions as this Honourable Court thinks fit pursuant to Section 36 of the Probate and Administration Ordinance (Cap. 10);
	(3)	An order that the Defendant do render a full account of assets of the Estate that have come into her hands and/or the debts or liabilities of the Estate released;
	(4)	An account of all sums received and expended by the Defendant on behalf of the Estate;
	(5)	An order for such necessary account and enquiry;
	(6)	Interest;
	(7)	Further or other relief; and
	(8)	Costs.”

7.The Defendant defended for the proceedings and denied the allegations, including that she was unable to administer or distribute the Estate fairly and impartially.  It was specifically averred that:

“	……it has always been the Defendant’s position that as long as the identities of beneficiaries to the Estate can be established the Defendant is willing to take care of their interest in accordance with the Laws of the Hong Kong Special Administrative Region.”
	(paragraph 11(d) of the Defence filed herein on 23 April 2007)

8.The parties are in the pleadings stage.  So far, both parties have been asking for particulars of pleadings on the other side.  On 19 January 2007, the Plaintiffs took out an ex-parte application by an affidavit of Madam Xu Hong.  They asked for an order to appoint them under Order 15 rule 15 RHC to represent the Estate in the proceedings herein.  Upon consideration, I directed that it should be made inter-parte with notice to all interested parties.

9.The Defendant and her daughters opposed the application.  Sub-service of the matter was performed on Zeng Zifan and Madam Huang Yanfang.  So far, they made no representation to this Court.  Then, I heard the dispute on 3 September 2007.  Mr. Bernard Mak of Counsel acted for the Plaintiffs.  Mr. B.K. Ho of Counsel represented the Defendant.  Having hearing from the parties, I reserved my decision to be handed down.  I now do so.

Ruling

10.Upon consideration of all the evidence authorities and submissions, I have decided to allow the Plaintiffs’ application in the circumstances.  My reasons appear in below.

Jurisdiction

11.The parties had a dispute as to whether this Court has or has not the jurisdiction to make a representation order, and I agree with Mr. Mak. Order 15 rule 15 RHC states that:

“	15.	—	(1)	Where in any proceedings it appears to the Court that a deceased person was interested in the matter in question in the proceedings and that he has no personal representative, the Court may, on the application of any party to the proceedings, proceed in the absence of a person representing the estate of the deceased person or may by order appoint a person to represent the estate for the purposes of the proceedings; and any such order, and any judgment or order subsequently given or made in the proceedings, shall bind the estate of the deceased person to the same extent as it would have been bound had a personal representative of that person been a party to the proceedings.
			(2)	Before making an order under this rule, the Court may require notice of the application for the order to be given to such (if any) of the persons having an interest in the estate as it thinks fit.”

In my view, on a literal interpretation, sub-rule (1) does give a wide jurisdiction to this Court to appoint somebody to represent an estate or dispense with such appointment if the estate is interested in the matter in question in the proceedings.

12.Mr. Mak further relied upon the case of Ip Cheung Kwok v Ip Siu Bun & Others [1990] 1 HKLR 497 to support his application.  In the authority, the plaintiff, as the sole beneficiary of an estate, sought various declaratory relief against the Defendants.  In the course of the trial, during an application for striking out upon the ground of lack of locus, the Judge made an order to appoint the plaintiff under Order 15 rule 15 to represent the estate.  The Court of Appeal later upheld the appointment.

13.Applying the above in the present application, I am satisfied that the court’s jurisdiction has been properly triggered.

(a)	HCAP 1/2007 has been commenced.
(b)	The Estate is interested in the matter in question herein, namely, whether there has been intermeddling and/or misappropriating of the same?
(c)	The Plaintiffs are applying for a representation order for the purpose of the proceedings.
(d)	Due notice to the application has been given by the Plaintiffs to all persons having an interest in the Estate, as directed by the Court.

Discretion

14.I then move to see if discretion should be exercised in favor of the Plaintiffs’ application.

(a)	It is indisputable that in the event that this Court should exercise his discretion, it should have regard to the best interest of the Estate.
(b)	It is also not disputed that the Defendant is the lawful widow and relict of the Deceased.  Usually, she has the prior right under rule 19 of the Non-Contentious Probate Rules (Cap.10A) to obtain the Grant.  She and her 2 children are the majority beneficiaries of the Estate.
(c)	It is now not disputed that the Plaintiffs are the lawful minor children of the Deceased.  Under section 4 of the Intestates’ Estates Ordinance (Cap. 73), they are minority beneficiaries of the Estate.
(d)	The Plaintiffs alleged that the Defendant intermeddled and misappropriated the Estate.  The Defendant denied.  For the time being, the matter cannot be resolved by way of affidavit, and has to be left to be decided after trial.  There is nonetheless evidence that the Defendant has acted in the capacity of “遺產執行人” for the Estate. However, no or no satisfactory explanation has been put forward. In my view, although it per se does not prove intermeddling or misappropriation, the call for a further investigation in the interest of the Estate has been made out. On the one hand, if the Defendant has done something wrong, appropriate measure should be taken.  On the other, if she does everything properly in the interest of the Estate, her name should be cleared.  As such, the Estate should be joined herein.
(e)	To protect the interest of the Estate, this Court is given one choice only, namely, whether the Plaintiffs should be appointed to represent the Estate in the proceedings.  The Defendant is opposing to it but does not put forward any alternatives, including the suggestion of administrator pending suit or administrator ad colligenda bona.
(f)	To balance the pros and cons of the Plaintiff’s suggestion, I take the view that the application is to be allowed so that this Court will not be in the future be left in a handicapped position in case that appropriate relief should be granted to the Estate.  By so doing, I also make it clear that merits of the parties’ case remain neutral for the time being and they are to be disputed at the trial.

Order

15.In the circumstances, I order that:

(a)	The Plaintiffs be appointed as persons to represent the Estate in this action under Order 15 rule 15 RHC.
(b)	The Plaintiffs also have leave to amend the Writ of Summons herein to incorporate the additional capacity.

Costs

16.It appears to me that there is no reason to depart from the general rule of costs following the event.  Counsel’s assistance is useful to me.  Therefore, I make an order nisi that the Defendant shall bear costs of the application, including costs reserved on 25 May 2007 and Certificate of Counsel on 3 September 2007, to be taxed if not agreed, in any event.  The Plaintiffs’ own costs are to be taxed in accordance of Legal Aid Regulations.

Mr. Bernard Mak, instructed by Hagon Wai & Partners for the Plaintiff.

Mr. B.K. Ho, instructed by Li Wong & Lam for the Defendant.