LAM WAI SUN alias LAM KWOK LEUNG AND ANOTHER v. CHAN YAN YEE, Administratrix of the Estate of LAM Wai Hung, Deceased

bjbj HCMP 1375/2019 [2020] HKCFI 1803 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 1375 OF 2019 IN THE MATTER of Order 85 of the Rules of the High Court, Cap. 4A and section 33(3) of the Probate and Administration Ordinance (Cap. 10) and IN THE MATTER of the Estate of LAM Wai Hung ( #k!`) CISION Introduction This is the Plaintiffs application under section 33 of Probate and Administration Ordinance (Cap 10) to remove the Defendant as the sole executrix of the estate of Lam Wai Hung, deceased ( the Deceased ) on the ground that she has failed to administer the estate in compliance with the judgment given by Chow J on 17 May 2018 (the Judgment ) and the Order dated 9 October 2018 in HCMP 3303/2015 (the 2018 Order ). The Plaintiffs also seek an order to revoke the grant of letters of administration in respect of the estate and to appoint their nominee/daughter as administratrix to take up the administration of the estate. The parties had been given directions for filing of affirmations. Having failed to file her affirmation in opposition within time, the Defendant was granted leave to do so on or before 4 June 2020 on an unless basis by Master J Wong at the hearing on 7 May 2020. The Plaintiffs application was set down for argument on 23 July 2020. Instead of filing an affirmation advancing proper grounds of objection to the Plaintiffs application, the Defendant handed in a letter at the Registry of the High Court on 1 June 2020. On 17 July 2020, the Plaintiffs lodged their skeleton submission. Having read the submission and the available documents, I formed the view that the application could be disposed of in the absence of the Plaintiffs. To reduce the risk of infection by Covid-19, I dispensed with the Plaintiffs attendance at the hearing. Background The Plaintiffs are parents of the Deceased who died intestate on 15 December 2013. The Defendant is the widow of the Deceased and administratrix of his Estate. She was granted letters of administration of the estate on 10 June 2014. The estate included cash in bank totalling around $1,061,480.43 and a flat in Richland Gardens (the Property ) which is the principal asset of the estate and the matrimonial home of the Defendant and the Deceased. The Plaintiffs as parents and the Defendant as the surviving spouse are the only beneficiaries to the Deceased s estate. Despite repeated requests made between 26 August 2014 and 12 December 2015, the Defendant failed to distribute the estate or inform the Plaintiffs of the progress of the administration. On 12 December 2015 the Plaintiffs commenced action in HCMP 3303/2015 against the Defendant seeking an order for her removal as administratrix and distribution of the estate. The application was heard before Chow J. The principal issue was whether the Property held in the name of the Deceased belonged to the Deceased solely or was held by the Deceased on trust for the benefit of both the Deceased and the Defendant in equal shares. On 17 May 2018, Chow J delivered judgment finding that the Property belonged to the Deceased solely. He left it to the parties to agree on the precise form of the order to give effect to the relief sought by the Plaintiffs. The Plaintiffs made some concessions, such as abandoning their request for interim distribution and removal of the Defendant. On 9 October 2018, upon the joint application of the Plaintiffs and the Defendant by way of consent summons, Chow J ordered, inter alia that: the Defendant to continue to put the Property up for sale at the price of $5,200,000 (the agreed price ) in the open market for four weeks after the date of the order; if the Property could not be sold within the four-week period, the Defendant shall either purchase the Property at the agreed price with completion date to be within 14 days after the expiration of the said four-week period and to the distribute to the Plaintiffs their whole entitlement in the sale proceeds within 14 days from completion of the sale; or to notify the Plaintiffs within 7 days thereafter that she will put the Property up for sale by public auction. Pausing here, it can be seen that the parties intended a clean break by the 2018 Order. From item (2)(i) above, it can be inferred that the Defendant knew the amount of the Plaintiffs entitlement to the estate and had the means to pay within the maximum of 28 days after the expiration of the said four-week period. If the Property could command a higher price, the Defendant may exercise the option to purchase at the agreed price. It was only if she did not wish to exercise that option that the Property would be auctioned. In other words, if the Property could only fetch a lower price, she may allow it to be sold by auction. She may also bid in the auction. She had the best of all worlds. The Defendant failed to sell the Property within the said four-week period which expired on 6 November 2018. On 13 November 2018, the Defendant s solicitors, Messrs T. C. Foo & Co ( ) wrote to the Plaintiffs solicitors, Messrs Francis Kong & Co., Solicitors ( ) informing the Plaintiffs of the intended sale by auction pursuant to the order of Chow J as set out in item (2)(ii) of paragraph 7 above. Neither the Defendant nor TCF informed the Plaintiff or FK of the arrangement or outcome of the auction. It was only after four reminders from FK issued on 27 December 2018, 10 January, 12 and 25 February 2019 that TCF replied on 28 February 2019 that they had difficulties in contacting the Defendant. This reflects adversely on the Defendant s intention to comply with the 2018 Order. On 25 April 2019, FK wrote to TCF demanding a substantive answer to their letters and threatening to commence contempt proceedings against the Defendant for failing to comply with the 2018 Order. It was only under that threat that TCF responded on 2 May 2019 mentioning a reduced price of $4,880,000 and asking if the Plaintiff would agree that the sale price should not below the Ordered Price (ie the agreed price stated in the 2018 Order), whatever that sentence meant. On 21 June 2019, FK replied proposing the Defendant to step down as administratrix and for the Plaintiffs daughter to replace her; failing which, the Plaintiffs will commence proceedings for the Defendant s removal. Neither the Defendant nor TCF responded by 11 July 2019 when the 1st Plaintiff filed his affirmation. In fact, neither of them ever did. Except for payment of the Plaintiffs share of funeral expenses in the sum of $33,500, the Defendant made no distribution and gave no account of her administration of the estate. On 2 September 2019, the Plaintiffs took out the present summons seeking removal of the Defendant as administratrix and a fresh grant of letters of administration of the deceased s estate to be issued to the Plaintiffs daughter. The law Section 33 of Probate and Administration Ordinance provides: Revocation of grants and removal of executors (1) Where it appears to the court that a probate or administration either ought not to have been granted or contains an error, the court may call in the probate or administration and if satisfied that it would be revoked at the instance of a party interested, may revoke it. (2) A probate or administration may be revoked under subsection (1) without being called in if it cannot be called in. (3) 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. Section 33(1) and (2) set out the statutory grounds upon which the court may order revocation of the grant with or without calling in the probate or administration. Where the reason for removal is due to a supervening defect after the grant and the removal of the grantee without revocation of the grant is sufficient, the application should be made under section 33(3). If there are additional special circumstances that require revocation of the grant as well, the applicant should proceed under section 33(1). What constitutes special circumstances justifying revocation in addition to removal depends on the facts of the case. They include mental incapacity of the grantee; disappearance of the grantee who had not administered the estate; and exceptionally, the grantee wishing to be relieved of his duties. The court will duly consider the circumstances relied on to see if they really warrant revocation of the grant in addition to removal of the grantee. Where the court orders revocation of a grant under section 33(1), as a matter of principle, a fresh grant has to be issued to enable the new grantee to administer the estate. In Re Estate of Kwan Chung , Poon J (as he then was) held the risk that the grantee will not lodge the grant with the court even if so directed, if real and substantial, is an example of a sufficient circumstance for invoking section 33(1) for revocation of the grant. He said: Returning to the present case, I think it is beyond doubt that the defendant has shown himself to be an unfit person to administer the estate. He has not taken any step to administer the estate. He has inexplicably refused to accept the very attractive offer made in respect of the Property. His conduct is detrimental to the due and proper administration of the estate and the interests of the beneficiaries. Removing him is plainly justified. However, removal alone is not enough. For upon removal, the defendant has to lodge with the court the Grant so that the order for removing him and appointing the plaintiff as administrator can be endorsed on it. Given his uncooperative attitude so far and his failure to participate in these proceedings despite service, there is a real and substantial risk that the defendant will not lodge the Grant with the court even if so directed. It will surely cause further unwarranted delay to the due and proper administration of the estate. The Grant should in the circumstances be revoked. In Re Lam Choi Hing , the grant was issued in 2001 and the sole executor was adjudicated bankrupt in 2004. Before his bankruptcy, he had done practically nothing towards administration of the estate. He had disappeared from sight even prior to his bankruptcy and all efforts to contact him failed. Andrew Cheung J (as he then was) was satisfied that the executor had shown himself to be an unfit and unsuitable person to carry on with the administration of the estate. He exercised the discretion to revoke the original grant and order that letters of administration be issued in favour of one of the applicants. Discussion The estate in the present case is a small one consisting of about a million dollars in bank accounts and the Property. All beneficiaries have been identified. The beneficiaries interest in the Property has been determined by court in HCMP 3303/2015. What was required in the administration of the estate was to sell the Property and distribute the proceeds. There is nothing to suggest there is any insurmountable difficulties preventing the sale of the Property. It has been more than six years since the grant of the letters of administration or almost two years since the date of the 2018 Order, but the Property is yet to be sold. As mentioned earlier, the Defendant failed to file any affirmation in opposition to the application to explain the state of affairs and to oppose her removal. Instead, she lodged a letter which was not made under oath. Her explanation for non- compliance with Master J Wong s direction was that she had not been explained about the need to file affirmation. The content of the letter was about her predicament as result of the death of the Deceased, the depression she suffered in 2016, the pressure given to her by the Plaintiffs, her objection to the judgment in HCMP 3303/2015 and the inequity of that judgment. But she did not explain, as one would expect she would explain, the reason for her inaction, if not since the grant of the letters of administration, at least since the date of the 2018 Order and what she had done since towards administration of the estate. The predicament she had was four years ago. Even accepting her letter as if it were an affirmation filed pursuant to the master s direction for these proceedings, the letter offered no valid objection to the Plaintiffs application for her removal. Before the trial in HCMP 3303/2015, the parties had met at the office of the Plaintiffs solicitors to discuss distribution of the estate in which the Defendant agreed to make a partial distribution of $800,000 to the Plaintiffs within one week and pay their full entitlements after the sale of the Property. Later, the Defendant reneged on that agreement excusing herself by saying that she was confused and suffering depression at the time. The agreement indicates that she is not a person without means at all, though that was four years ago. At the trial, when advancing her argument that the Deceased had agreed with her that all the family assets belonged to both of them in equal shares, she said under cross-examination that the agreement would only apply to her assets upon her death. That suggests she had other assets besides the Property. She is not a person without any means. Upon determining the parties interest in the Property in HCMP 3303/2015, Chow J very sensibly allowed the parties to reach agreement on the terms of the order to be made to enable proper administration of the estate. There was an agreement on the price of the Property to be sold and for the Defendant to purchase the Property at that price by paying what would be the Plaintiffs entitlement to the estate. As already mentioned above, the Defendant had the best of all worlds under the 2018 Order. She would not have agreed to the terms of that Order if she did not have the means to buy the Property. Alternatively, she could have sold the Property by auction. She offered no evidence of what she had done in arranging the auction and the outcome of the auction. The inference is that she had never put the Property up for auction. All the indications are that she deliberately refused to perform the 2018 Order. At the hearing before me, I tried to understand from the Defendant the reasons for her failure for her non-compliance with the 2018 Order. She repeated what she said in her letter which, as I have said, was no answer to her failure to sell the Property. She told me that she has just retired and is still residing in the Property. She said she had placed the Property for sale through a number of estate agents and if the Property was sold, she would arrange to move to rented accommodation. She said that she was unable to sell because the Plaintiffs had registered a lis pendens against the Property in the Lands Registry. I think that is a mere excuse and not a genuine reason. Estate agents must have conducted land searches and discovered the lis pendens. They must have ascertained the reason for the lis pendens and understood that the intended sale was the reason for the lis pendens which would as a matter of course be removed upon completion by arrangements made between the solicitors of the parties to the sale and purchase. I do not think the reasons she gave for not being able to sell the Property was genuine. I also tried to ascertain from the Defendant if arrangements could be made for the Plaintiffs to participate in the sale of the Property so as to avoid the need for her removal. She resisted that suggestion because she is still living in the Property and it would be inconvenient to allow the Plaintiffs and their prospective purchasers access to view the Property. She insisted that the Plaintiffs must remove the lis pendens. That would deprive the Plaintiffs of their security over their entitlements in the estate. As I have explained, removal of the lis pendens is not necessary. I do not think her request was made out of good faith. The lis pendens was only raised as an excuse for failing to sell the Property. A year and nine months lapsed since the 2018 Order. The Property remains not sold. The Defendant and her solicitors did not respond to the Plaintiffs demand for proper administration of the estate. Even as of the date of this hearing, she could offer no proper explanation for her inaction. A delay or inaction of six years is far too long to justify the continuation of her appointment. She is still harbouring a grievance against the Plaintiffs arising out of her misguided sense of fairness that whatever her husband left behind is all hers to the exclusion of his parents. It appears to me that because of her misguided sense of fairness, she was determined to remain in the Property for as long as her abuse of the legal process could allow her. What she is wanting is the will to sell. Given her attitude, I do not consider the Defendant will discharge her duty as administrator in an efficient and fair manner or at all. She has by her conduct over the past six years amply demonstrated that she is not a fit and proper person to administer the estate. The only appropriate course now is to have her removed and to have someone appointed in her place. Besides, apart from sale of the Property there are other matters to attend to in the administration of estate, such as giving an account of the rental income etc. It seems to me that the parties have dug their heels so deep in the sand that there could not be any workable alternative to enable the Property to be sold and the estate administered without removing the Defendant as administratrix and replacing her with someone else. Given her attitude, I think there is a real and substantial risk that she will not deliver up the grant if so directed by the court to enable a new administratrix to be appointed. To minimise delay, it would be necessary to revoke the grant and issue a fresh grant. To require the Defendant to sell the Property in which she is living will cause her much inconvenience. She will be required to make arrangements for alternative accommodations. But to allow the status quo to continue as it is, the Property will never be sold. While the Defendant is to blame for the difficulties she now finds herself in, I shall nevertheless make a last attempt to ease things out for her by creating a transition period of two months before the removal and appointment takes effect. During these two months she should try to arrange the sale and alternative accommodation. In the intervening period, the Plaintiffs shall file an affidavit verifying the Plaintiffs daughter s consent to act as administratrix. If a sale and purchase agreement has been reached, the Defendant may apply for stay of the order. For that purpose, liberty to apply will be given. Conclusion For the above reasons, I allow the Plaintiffs application and make the following orders: the Plaintiffs shall file an affidavit verifying the consent of Lam Mei Sze to act as administratrix of the estate of the Deceased within 28 days; subject to compliance with item (1), the letters of administration granted to the Defendant shall be revoked on 30 September 2020 and the Defendant shall be removed as administratrix of the Deceased estate; lodging of the letters of administration by the Defendant with the Probate Registry be dispensed with; the Defendant does furnish, by way of affidavit, a just and true account of the estate under her administration on or before 14 October 2020; a fresh grant of letters of administration of the deceased be issued to Lam Mei Sze as administratrix upon compliance with all the usual formal and procedural requirements of the Probate Registry; the Defendant shall pay the Plaintiffs costs of the application personally and on indemnity basis; and there be liberty to apply. ( Anthony To ) Deputy High Court Judge Mr Danny Chan, instructed by Francis Kong & Co., Solicitors for the 1st and 2 kgcgkg_XP h sl h K$ gd sl gdN$ gdN$ gdN$ gdAn gdAn h{cp h K$ h~~} gdAn gdRC ytAn gdRC gdRC ytAn gdMx gdN$ ytAn og_WO_ h*bb hr}g h{cp hUg% h{cp gd}Oi gd]t7 gd]t7 gd]t7 h]t7 h#J? gdh` gdi2i gdTo gdTo hi2i gd*bb h*bb h0A> nd Plaintiffs The Defendant appearing in person [2013] 6 HKC 34 [2007] 1 HKLRD 23 No PAGE - PAGE \* MERGEFORMAT - A B C D E F G H I J K L M N O P Q R S T U V A B C D E F G H I J K L M N O P Q R S T U V A B C D E F G H I J K L M N O P Q R S T U V A B C D E F G H I J K L M N O P Q R S T U V |v|v hOA, hH?z hH?z h*bb gdOA, &`#$ gdGO gdTo hH?z hOA, hOA, hOA, hH?z :pN$ :p K$ ytAn ytAn ytAn & #$ & #$ & #$ & #$ [Content_Types].xml _rels/.rels theme/theme/themeManager.xml K Y, sQ}# theme/theme/theme1.xml $O}) Xp90 +PHI| PP yu 9xu5 fs+W VF7H q=. 8}d- qyI@ j!Q_ jyV` |PZ+ T ""p < 4V O&x$ A8>v ;EUC n 8r *~P(5 .}x E /,EE\} theme/theme/_rels/themeManager.xml.rels 5 6?$Q K(M&$R(.1 [Content_Types].xmlPK _rels/.relsPK theme/theme/themeManager.xmlPK theme/theme/theme1.xmlPK theme/theme/_rels/themeManager.xml.relsPK <?xml version="1.0" encoding="UTF-8" standalone="yes"?> <a:clrMap xmlns:a="http://schemas.openxmlformats.org/drawingml/2006/main" bg1="lt1" tx1="dk1" bg2="lt2" tx2="dk2" accent1="accent1" accent2="accent2" accent3="accent3" accent4="accent4" accent5="accent5" accent6="accent6" hlink="hlink" folHlink="folHlink"/>U% [Content_Types].xml dlyLho ;d]6 yJ.; _rels/.rels fLV:* ]m@= T;GI b9`5 drs/e2oDoc.xml *0Sr <4a& qfEO-zQc` #H5| uFXIP% drs/downrev.xmlL @dg b6NA [Content_Types].xmlPK _rels/.relsPK drs/e2oDoc.xmlPK drs/downrev.xmlPK [Content_Types].xml dlyLho ;d]6 yJ.; _rels/.rels fLV:* ]m@= T;GI b9`5 drs/e2oDoc.xml WPn \k GQDu L@cC} Rt_, drs/downrev.xmlL !kZO K(dFC [Content_Types].xmlPK _rels/.relsPK drs/e2oDoc.xmlPK drs/downrev.xmlPK [Content_Types].xml dlyLho ;d]6 yJ.; _rels/.rels fLV:* ]m@= T;GI b9`5 drs/e2oDoc.xml lCpe 6k(w N'.< V}>|%a (v.W "^*I,}B drs/downrev.xmlL z+vB ?Ro&^ }%mo QIrk [Content_Types].xmlPK _rels/.relsPK drs/e2oDoc.xmlPK drs/downrev.xmlPK [Content_Types].xml dlyLho ;d]6 yJ.; _rels/.rels fLV:* ]m@= T;GI b9`5 drs/e2oDoc.xml 9/L)Z0* %=C %PUZ 5u9V ZdGAC _4fQ drs/downrev.xmlL @dg b6NA [Content_Types].xmlPK _rels/.relsPK drs/e2oDoc.xmlPK drs/downrev.xmlPK [Content_Types].xml dlyLho ;d]6 yJ.; _rels/.rels fLV:* ]m@= T;GI b9`5 drs/e2oDoc.xml :m9X#u N'., _fgOG 5v"^JI< drs/downrev.xmlL !kZO K(dFC [Content_Types].xmlPK _rels/.relsPK drs/e2oDoc.xmlPK drs/downrev.xmlPK [Content_Types].xml dlyLho ;d]6 yJ.; _rels/.rels fLV:* ]m@= T;GI b9`5 drs/e2oDoc.xml $mXh ^%#`m iylC *r!q @#zV 'Ky~"? p>t# SJ(f o~sP [%w?v drs/downrev.xmlL z+vB ?Ro&^ }%mo QIrk [Content_Types].xmlPK _rels/.relsPK drs/e2oDoc.xmlPK drs/downrev.xmlPK j4({ &tBL %|kOZ %|kO N#"{4 *2w$1 2w$1 2RCiK 52w$1 9x'# 14{> A2R1 RCiK dx'# High Court Normal.dotm Windows User Microsoft Office Word d5U[e Judiciary Title <?xml version="1.0" encoding="UTF-8" standalone="no"?><b:Sources SelectedStyle="\APA.XSL" StyleName="APA" xmlns:b="http://schemas.openxmlformats.org/officeDocument/2006/bibliography" xmlns="http://schemas.openxmlformats.org/officeDocument/2006/bibliography"></b:Sources> <?xml version="1.0" encoding="UTF-8" standalone="no"?> <ds:datastoreItem ds:itemID="{D5468408-05DB-48BC-A862-5C2F9F260850}" xmlns:ds="http://schemas.openxmlformats.org/officeDocument/2006/customXml"><ds:schemaRefs><ds:schemaRef ds:uri="http://schemas.openxmlformats.org/officeDocument/2006/bibliography"/></ds:schemaRefs></ds:datastoreItem> Microsoft Word 97-2003 Document MSWordDoc Word.Document.8