Lam Ka Wai Rebecca and Another v. Lam Jenny and Another

HCCA 3080/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CAVEAT NO. HCCA 3080 OF 2007

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Coram :   Before Master J. Wong in Chambers

Date of Hearing :   3 December 2008

Date of Decision   :   30 January 2009

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D E C I S I O N

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INTRODUCTION

1.There is a dispute before this Court as to who is/are to be appointed as administrator/administrators of a deceased father.

BACKGROUND

2.Mr. Lam Kam Wai married to Madam Cheung in 1979 in the Mainland.  Four children were born out of the marriage, including the Persons Warning herein Jenny and Annie.

3.In 1993, the Supreme Court of British Columbia, Canada pronounced a divorce of the marriage upon petition of Madam Cheung.

4.Meanwhile, since about 1988, Mr. Lam had also lived with a lady Madam Chan.  Short of an official marriage certificate, Madam Chan considered their relationship as husband and wife.  Jenny and Annie however disagreed.  Nonetheless, it is not disputed that Madam Chan did born two children for Mr. Lam, one of whom is still a minor.

5.Mr. Lam (hereinafter called “the Deceased”) died intestate in Hong Kong on 8 September 2006 leaving a substantial amount of estate (“the Estate”) of about $557 m, including some $251 m shares in 2 private companies.  It is also not disputed that the Estate is to be shared in equal shares by the said 6 children.

6.Briefly, since the death of the Deceased, the 2 camps, headed by Jenny and Madam Chan, could manage to get along with each other.  However, as time went on, the conflict increased.  Probably, the harmony broke up when Madam Chan informed that she would make a claim against the Estate under the Inheritance (Provision for Family and Dependants) Ordinance (Cap. 481) (“I(PFD)O”). It led to the present Caveat proceedings in 2007.  The Persons Warnings said that they should be entitled to the grant.  However, the Caveators disputed and argued, inter alia, that they should have their own representative, preferably an independent solicitor Mr. Norman Chui, in the administration of the Estate.

7.The matter came before me for mention in the middle of 2008.  I adjourned the same for argument and gave usual directions for filing and serving of affidavit evidence.  I heard the matter further shortly before the substantive hearing when the Caveators wished to, inter alia, apply for leave to cross-examine the Persons Warning.  On 17 November 2008, I refused such application.

8.Eventually, the parties appeared before me on 3 December 2008.  Mr. Chan Chi Hung, S.C., leading Ms. Dora Chan of Counsel acted for the Caveators. Mr. K.M. Chong and Mr. Roland Lau, both of Counsel, represented for the Persons Warning.  Upon hearing from the learned Counsel, I reserved my decision to be handed down.  I now do so.

DISCUSSION

(A)  Section 36 PAO

9.Counsel drew my attention to section 36 Probate and Administration Ordinance (Cap. 10) (“PAO”).  Probably, it is not disputed that such provision gives the Court a wide discretion to appoint administrator(s) as it appears to be necessary or convenient in the circumstances of each particular case.

(B)  Section 25 PAO

10.Since minority interest is involved in the Estate, it triggers section 25 PAO, viz. no less than 2 individual administrators is needed.

(C)  Two camps?

11.Both Counsel had a dispute as to whether there are two branches of the beneficiaries. In my view, there is no need to look to the “definition” of branches in our circumstances.  As a matter of undisputed or indisputable facts, the 4 children born by Madam Cheung and the 2 of Madam Chan are simply two camps or two groups. They have recognized each other as well as tried to protest their respective interest in the Estate.

(D)  Status of the two Camps?

12.The children born by Madam Cheung are lawful and natural while those of Madam Chan are natural only.  Nonetheless, the relationship of the parents is no longer a factor to be considered in the context of inheritance of intestate estate in Hong Kong.  Under rule 21(1)(ii) of the Non-Contentious Probate Rules (Cap. 10A) (“NCPR”), all six children are entitled to the same priority for a grant to the Estate except that both the natural children are not eligible for the grant because they are under 21 (Rule 31 NCPR).

RULING

13.With the aforesaid background and discussion in mind, I have decided that Jenny and Mr. Norman Chui should be appointed as co-administrators for the Estate in the circumstances.  Nonetheless, the costs of the professional are to be paid by the Caveators only.  My reasons appear in below.

(a)   The Estate is substantial and running of 2 businesses are involved.

(b)   The sharing of the Estate by the 2 Camps is 4 to 2.  However, as a matter of usual practice (Williams, Mortimer and Sunnucks on Executors, Administrators and Probate 19^th Ed. Para.17-12, Tristram and Coote’s Probate Practice 30^th Ed. Para. 7.36 and 7.37), if there is more than one camp of beneficiaries, one from each of them should be selected.   Both the natural children are under 21.  Their mother will have a claim against the Estate.  Hence, an independent professional administrator is indeed the only choice unless such usual practice is not followed.

(c)   I agree with Mr. Chong that expeditious and economic administration of the Estate is a relevant factor, though not necessarily the overriding one.  For the time being, I see no reason why a professional solicitor will hinder the administration.  I further take the view that a professional will help the administration because of his legal knowledge and independence.  As to costs, provided that the fees are to be borne by the natural children, it should not be objectionable to the other four.

(d)   As the matter has developed, it cannot be disputed that the two Camps, probably more specifically, as between Jenny and Madam Chan, do have disputes or even hostile attitude towards each other.  It is certainly not for me to resolve each and every of their quarrels, in particular those personal in nature and not touching on the administration of the Estate at all.  However, I do hope that by the involvement of a professional, the administration can become more smooth, especially in light of the intended claim by Madam Chan under I(PFD)O.

(e)   Such claim may be difficult to handle in the circumstances.  Very briefly, the claim shall be made within 6 months from the Grant to be issued in relation to the Estate.  The Ordinance allows somebody to apply to the Court to make reasonable financial provision for him/her from an estate if it can be proved that, immediately before the death of the deceased, he/ she was being maintained, either wholly or substantially, by the deceased. I am not in a position to comment on such intended claim save to urge the parties to adopt reasonable attitude towards the matter for saving costs and time, and perhaps and more importantly, for regaining the relatively harmonious relationship that the parties did enjoy for the some time.

(f)   I did have a short discussion with the parties as to the costs of Mr. Chiu in the event that this Court needs to trouble him.  Upon thought, I see no reason why Jenny and her Camp should pay for Mr. Chiu as they really did not need his assistance.  Basically, the professional is to be engaged for the Caveators.  Hence, they should be paying for his fee. I understand that the Caveators have obtained a quote from Mr. Chiu. He has agreed to take up the job at the hourly rate of $4,500. So, it is the way that Mr. Chui will be remunerated.

ORDER and COSTS

14.In conclusion, I will make the following orders.

(a)  The Amended Caveat filed herein dated 31 December 2007 shall cease to have any effect.

(b) Subject to the filing of all requisite papers leading to a grant of representation of the estate of Lam Kam Wai, deceased, and the compliance with the requirement of the Registrar of the Probate Registry, Ms. Lam Jenny and Mr. Norman Chui are to be appointed as co-administrators under section 36 Probate and Administration Ordinance (Cap. 10) for the estate of the said deceased..

(c)  Costs of Mr. Norman Chui in the administration shall be charged at 4,500 per hour, to be borne by the Caveators.

(d) Liberty to apply for further directions, if necessary. 

15.I do not have the benefit from the parties on the question of costs.  However, as both parties have won and lost some of their arguments, I deem fit to make an order nisi that each party will bear their own costs in the circumstances.

Mr. C.H. Chan, S.C. and Mrs. Dora Chan instructed by Messrs. Chong, Fu & Co. for Caveators.

Mr. K.M. Chong and Mr. Roland Lau instructed by Messrs. K.M. Lai & Li for Persons serving Warning to Caveators.