Tsang Hing Fun, Laurence v. Tsang Kai Fun, Patrick As Administrator of the Estate of Tsang Lo Oi Wah, Agnes, Deceased

HCMP 1588/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1588 OF 2011

_________________________

BETWEEN

_________________________

Coram : Master J Wong in Chambers (Open to Public)

Date of Hearing : 3 September 2012

Date of Decision : 2 November 2012

_____________

D E C I S I O N

_____________

Introduction

1.This is the second proceedings issued by the Plaintiff against the Defendant for an account of the administration of the estate of their deceased mother.

Background

2.Madam Tsang, Lo Oi Wah, Agnes (曾盧愛華) (“the Deceased”) died intestate on 28 November 2005 in Hong Kong.  Her husband Tsang Chi Keung (曾志強) (“the Husband”) passed away before her about one year earlier on 5 September 2004. Four of their lawful and natural sons are the only persons entitled to share in the estate of the Deceased, namely

(a)  Tsang Ming Fun (曾銘勳);

(b)  Tsang Kin Fun, Raymond (曾建勳);

(c)  The Plaintiff Tsang Hing Fun, Laurence (曾慶勳) (“Laurence”); and

(d)  The Defendant Tsang Kai Fun, Patrick (曾啟勳) (“Patrick”).

3.At the date of death, the Deceased left an estate (“the Estate”) of about $10 m.  According to the schedule of property prepared by the Estate Duty Office on 18 April 2006, the Estate comprised of the followings.

1.	Accounts with Wing Lung Bank Limited
	(a)		Account No. 020-605-860-10717-2 …….........	$1,018,674.24
	(b)		Account No. 020-605-202-6307-4 …………...	220,000.00
2.	Accounts with The Bank of East Asia, Limited
	(a)		Account No. 133-78-01979-5 ……………….	231.47
	(b)		Key deposit in respect of Safe Deposit Box No. 13301-0-1255 (North Point Branch) (Deceased’s 1/2 share) ……………………….	60.00
3.	Household Goods and Personal Effects ……………...			30,000.00
4.	Deceased’s interest in the estate of Tsang Chi Keung, predeceased ………………………………………….			1,065,278.30
5.	Land and Buildings
	(a)	The Remaining Portion of Section A of Inland Lot No. 1591 (G/F, 604 Queen’s Road West, Hong Kong.) …………………………………		3,600,000.00
	(b)	The Remaining Portion of Section A of Inland Lot No. 1591 (Kiosk, 604 Queen’s Road West, Hong Kong.) …………………………………		400,000.00
	(c)	The Remaining Portion of Section A of Inland Lot No. 1591 (1/F, 604 Queen’s Road West, Hong Kong.) …………………………………		880,000.00
	(d)	The Remaining Portion of Section A of Inland Lot No. 1591 (2/F, 604 Queen’s Road West, Hong Kong.) …………………………………		820,000.00
	(e)	The Remaining Portion of Section A of Inland Lot No. 1591 (3/F, 604 Queen’s Road West, Hong Kong.) …………………………………		700,000.00
	(f)	The Remaining Portion of Section A of Inland Lot No. 1591 (4/F, 604 Queen’s Road West, Hong Kong.) …………………………………		$600,000.00
	(g)	The Remaining Portion of Section A of Inland Lot No. 1591 (5/F, 604 Queen’s Road West, Hong Kong.) …………………………………		500,000.00
	(h)	The Remaining Portion of Section A of Inland Lot No. 1591 (6/F, 604 Queen’s Road West, Hong Kong.) …………………………………		430,000.00
		Principal value of estate		$10,264,244.01
		Less: Deductions Per “Schedule of            Deductions Allowed” attached    hereto		268,101.00
				$9,996,143.01

Debts due and owing from the deceased contracted in Hong Kong to persons resident therein or charged on property situate in Hong Kong
1.	Outstanding Tax due to The Government of the Hong Kong Special Administrative Region ………………..		$2,901.00
2.	Amount due to Wing Lung Bank Limited under Account No. 601-001-16124 ………………………...		167,000.00
3.	Amount due to the tenants in respect of the following properties:
	(a)	G/F, 604 Queen’s Road West, Hong Kong. ….	37,000.00
	(b)	Kiosk, 604 Queen’s Road West, Hong Kong. ..	5,000.00
	(c)	2/F, 604 Queen’s Road West, Hong Kong. …..	8,600.00
	(d)	4/F, 604 Queen’s Road West, Hong Kong. …..	6,600.00
	(e)	6/F, 604 Queen’s Road West, Hong Kong. …..	5,000.00
		Total debts allowed	$232,101.00
		Funeral expenses	36,000.00
		Total deductions allowed	$268,101.00

4.On 20 April 2006, Patrick applied under HCAG 4580/2006 for the administration of the Estate.  Though Laurence had lodged a Caveat (HCCA 556/2006) on 6 March 2006 against the Estate, he did not enter an Appearance to respond to the Warning served by Patrick.  Hence, by rule 44(11) of the Non-Contentious Probate Rules (Cap 10A), the Caveat ceased to have effect.

5.Thereafter, Letters of Administration regarding the Estate was granted to Patrick on 16 October 2006.

6.On 10 July 2009, Laurence commenced HCMP 1305/2009 against Patrick for an administration account of the Estate.  Later, Patrick filed an affirmation therein, exhibiting an interim administration account as at 30 September 2009. Briefly, it explained the income and expenditure position of the Estate from 2006 to 2009.  As at that date of the interim account, the Estate was worth at about $21m because the major asset therein, namely, the building (“the Building”) at 604 Queen’s Road West, was then valued at $20m approximately.

7.HCMP 1305/2009 was heard by the Hon Chung J on 9 October 2009.  As Patrick had provided the said interim account, the learned Judge took the view that the relief sought by the proceedings was satisfied.  The other request as to distribution and sufficiency of the account were not issues before the Court. Hence, the Court made no order, including costs, on the Originating Summons therein.

8.On 19 August 2011, Laurence commenced the present action for:

“ 1] An administration account.

2] A list of all the assets forming the estate of the Deceased, showing details (with supporting documentary evidence) of what have been distributed or otherwise disposed of and the particulars of such distributions/disposals including the date, the parties involved and the considerations.

3] Further or other relief, including but not limited to all further necessary or appropriate accounts, inquiries and directions as the Court shall decide.

4]     Costs of this action be paid by the Defendant personally, or as may be.”

(Originating Summons dated 19 August 2011)

9.By an affirmation filed herein on 28 December 2011, Laurence complained, inter alia, that:

(a)  Patrick had declined to provide update figures of the Estate, despite requests.

(b)  On 10 August 2010, he wrote to Patrick offering to work as bookkeeper for the Estate.  Patrick however declined him.

(c)  On 9 December 2010, Patrick entered into sale and purchase agreement to sell the Property for 30.3 m, but did not inform him as such.

10.Parties appeared before me on 22 March 2012 for the call-over of the Notice of Appointment to hear Originating Summons.  Upon hearing from them, I ordered that:

“ 1. The Defendant shall file and serve his affirmation in opposition within 14 days from the date hereof;

2. The Plaintiff shall file and serve his affirmation in reply within 14 days thereafter;

3. No further affirmation shall be filed without the leave of the Court;

4. Any application for leave to file further affidavit must be made not less than 14 days before the substantive hearing supported by reason on affidavit;

5.     ……”

11.Patrick contested the application and asked the Court to dismiss it.  In his opposing affirmation, he told the Court that:

(a)  He applied for the Letters of Administration for the Estate with consent of all the beneficiaries.

(b)  HCA 1649/2007 was commenced by him as administrator for the estate of the Father against Laurence for recovery of a flat at 10^th Floor, 88 Tin Hau Temple Road (“the Tin Hau Flat”) stayed by him and mesne profits thereof.

(c)  The Building was sold in March 2011.  Laurence, in the capacity of a beneficiary, went to the solicitors demanding for net proceeds.  His unreasonable demand was refused.

(d)  Several interim administration accounts on the Estate were prepared and various distributions were also made.  An interim account up to 31 December 2011 was also exhibited.

(e)  So far, an aggregate sum of $6,405,000 was paid to Laurence.

(f)  He heard no complaints from other beneficiaries.

(g)  Administration of the Estate was to be concluded by the end of 2012 and a final account would be prepared.

12.Laurence disagreed.  By his affirmation in reply filed on 25 April 2012, he explained that:

(a)  Patrick only applied for the grant himself.  There was no consensus as alleged.

(b)  He resided at the Tin Hau Flat for over 30 years.  He vacated it on 31 December 2007.

(c)  He attended the solicitors to make inquiry only.

(d)  His entitlement over the sale proceeds of the Property should be $7.5m when Patrick let him have $750,000 only.

(e)  Patrick only provided interim accounts twice.  They were also not satisfactory in a number of aspects, and as such, should be audited by an independent auditor.

(f)  The distribution was done in a piece meal manner at Patrick’s discretion without explanation at all.

(g)  The stance of other beneficiaries was unknown, but it was neither here nor there.

(h)  Other than independent auditing, Patrick should allow him to get access to underlying documents to verify the accounts.

13.Parties went further before me on 3 September 2012 for the substantive argument.  Both of them were represented by Counsel, Mr Benny Lo for Laurence, and Ms Leona Chan for Patrick.  Upon hearing from them, I reserved my decision to be handed down.

Preliminary matters

14.Two summonses were issued by the parties respectively.

(a)  On 20 August 2012, Laurence’s solicitors asked to leave to amend the Originating Summons to include:

(i)  The marginal note of section 56 Probate and Administration Ordinance (Cap 10) and Order 85 rule 2(3)(a) and (e) of Rules of the High Court (Cap 4A), as well as

(ii)  An extra relief numbered 2A, namely, an order that Patrick do verify the matters in paragraphs 1 and 2 above on affidavit within 14 days.

The solicitor filed a short affirmation explaining the need to cure technical defects done by Laurence when he was acting in person herein.  After all, Patrick would suffer no prejudice of the amendment.

(b)  On 31 August 2012, Patrick’s solicitors sought to rely on an extra affirmation of opposition.  It attempted to refute matters mentioned in Laurence’s affirmation in reply, including that HCMP 1305/2009 was dismissed and Laurence did not make complaint on the first interim account. 

15.As to the former, Ms Chan did not oppose to it.  I made an order in terms of it at the hearing.  Regarding the latter, Mr Lo opposed it.  To avoid unnecessary adjournment, I then allowed it on de bene esse basis.  After thought, now, I have decided to dismiss it.

(a)   It contradicts with directions having been given by this Court regulating the evidence to be used.  The summons was issued late and there was no supporting affidavit prepared to explain why it was so done.

(b)   It also contradicts the usual practice that an applicant has the final say in evidence regarding his application.

(c)   I am not satisfied that there is something in the extra affirmation in opposition that could not have been obtained and included in the earlier one.

(d)   The extra affirmation contains some incorrect information when I looked at the Court record on 9 October 2009 before Chung J in HCMP 1305/2009.

(i)   Only Laurence acted in person, not Patrick.  He was represented by Ms Lee of Messrs Paul W Tse.

(ii)     Laurence did raise questions over the interim administration account.  However, as he only asked for an account in the action, the judge asked him to take legal advice as to what could be done further.

(iii)    The application was not dismissed.  The learned Judge made no order only.

(e)   Last, but not least, even if I would take into account of the extra affirmation in opposition, it did not affect my Decisions herein.

Decisions and reasons

16.Upon consideration of all evidence authorities and submissions, I have decided to make the following orders.

(a)   Within 28 days from today, Patrick do supply with Laurence the final administration account of the Estate, verified by affidavit. At the same time, Patrick do also pay Laurence accordingly the final payment as to the distribution of the Estate.

(b)   Patrick do further within 14 days thereafter allow Laurence to inspect all supporting documents in relation to the said final administration account.

(c)   There is also an order nisi that each party bears his own costs of the application and proceedings.

My reasons appear in below.

(a)   It is not disputable that Patrick, being an administrator of the Estate, is under a duty to account for his administration to the beneficiaries.

“56. Duty of personal representative as to inventory

The personal representative of a deceased person shall, when lawfully required so to do, exhibit, by affidavit filed in the Court, a true and perfect inventory and account of the movable and immovable property of the deceased, and the Court shall have power as heretofore to require personal representatives to bring in inventories.”

(Probate and Administration Ordinance (Cap 10))

“…… granted to TSANG KAI FUN, PATRICK (曾啟勳) of 3^rd Floor, 604 Queen’s Road West, Hong Kong, he having been first affirmed well and faithfully to administer the same by paying the just debts of the said deceased and distributing the residue of her estate and effects according to law and to exhibit a true and perfect inventory of all and singular the said estate and effects and render a just and true account thereof whenever required by law so to do ……”

(Grant issued under HCAG004580/2006)

(b)  It is also trite law that the beneficiaries shall not interfere with proper administration of the estate.

(c)  The Deceased passed away 7 years ago.   The Building, i.e. the major asset of the Estate, namely 604 Queen’s Road West, was sold in 2011.  The administration should be finalized as soon as possible and there is no reason why it cannot be done.

(d)  Two interim administration accounts have been produced by Patrick. He is a practicing certified public accountant.

(e)  After disposal of the Building, the Estate should worth more than $30 m.  Each of the siblings should therefore be entitled to not less than $7.5 m.  Up to now, Laurence has been accepted from Patrick a total sum of more than $6 m.

(f)  The other 2 beneficiaries of the Estate, namely the 2 senior siblings have not taken part in the argument between Patrick and Laurence.

(g)  Some of allegations between Patrick and Laurence cannot be resolved by affidavit evidence.

(h)  There are complaints from Laurence as to the adequacy of the interim accounts.  However, short of the evidence supporting mal-administration, I am satisfied that the interim accounts are sufficient for the purpose explaining the interim position on the administration of the Estate.

(i)  Audited accounts are not needed as they would only add unnecessary costs to burden the Estate.

(j)  Upon the provision of the final account as well as supporting documents as ordered by me, it is then for Patrick to look for legal advice or otherwise to see if anything is to be done further, or that their dispute should end there.

(k)  Both parties are equally reasonable in trying to protect his own interest.  However, at the same time, they might also be described as equally culpable by commencing and defending the litigations unnecessarily.

17.I have nothing further to add apart from expressing gratitude to the assistance from both Counsel.

Mr Benny Lo, instructed by Messrs Gallant YT Ho & Co, for the Plaintiff.

Ms Leona Chan, instructed by Messrs Francis Kong & Co, for the Defendant.