CHAN SAU WAI SHIRLEY v. JEN KIT JOSEPHINE, THE ADMINISTRATRIX OF THE ESTATE OF THE DECEASED AND ANOTHER

HCA 346/2014 and
HCMP 106/2017
(Consolidated)
[2019] HKCFI 879

HCA 346/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 346 OF 2014

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AND

HCMP 106/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 106 OF 2017

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_______________

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(Consolidated pursuant to the Order of
DHCJ N Francis dated 28 February 2018)

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REASONS FOR DECISION

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1.  This matter came before me on 28 March 2019. At the end ofthe hearing, I gave my Decision orally and said that I would hand down my Reasons for Decision in due course. These are my Reasons for Decision.

THE CONSOLIDATED ACTION

2.  These are two sets of proceedings, HCA 346/2014 (“the HCA”) and HCMP 106/2017 (“the HCMP”), which were ordered to be consolidated by the Order of DHCJ N Francis dated 28 February 2018.  By that Order, the learned Deputy Judge also ordered that the HCMP be continued as if begun by writ and that the plaintiff in the HCA (“Madam Jen”) be treated as the plaintiff and the plaintiff in the HCMP (“Madam Chan”) be treated as the defendant in the Consolidated Action.

3.  I was informed by counsel on both sides that they actually consented to the consolidation of the two sets of proceedings.  Speaking for myself, I have serious doubts as to whether it is appropriate or expedient for that to be done.  I shall say more about this below.

THE FACTUAL BACKGROUND

4.  Jen Frank Chia Hsiang (“the Deceased”) died intestate in Shanghai on 25 January 2010.  His first wife was a Madam Chou who predeceased him on 21 May 1998.  They had two children, Madam Jen and a son by the name of Franklin (“Franklin”), the 2^nd defendant in the HCMP.

5.  The Deceased subsequently married Madam Chan in Canada on 2 September 1999.  They had no children.

6.  As is obvious from the evidence filed and from the number of court proceedings between Madam Jen and Franklin on the one side and Madam Chan on the other side in Hong Kong and Canada and in Shanghai, the relationship between them is extremely acrimonious.

7.  Soon after the death of the Deceased in 2010, Madam Jen and Franklin already started proceedings against Madam Chan in Shanghai where Madam Chan was living and claimed a right of inheritance to assets which allegedly belonged to the Deceased.

8.  In March 2011, Madam Jen attempted to apply for a grant of Letters of Administration of the estate of the Deceased by seeking an order for substituted service of the Citation on Madam Chan.  The Probate Registry refused to make the order for substituted service sought.

9.  In February 2012, Madam Jen tried again and this time successfully obtained from the Probate Registry an order for substituted service of the Citation on Madam Chan.  She then caused the Citation to be published in a local newspaper.  There was no response from Madam Chan.

10.  Subsequently, on 28 September 2012, Madam Jen was granted the Letters of Administration to the estate of the Deceased (“the LA”) making her the sole administratrix of the estate of the Deceased.

11.  At this juncture, it is worthy of note that, as shown by the Schedule of Assets and Liabilities of the Deceased attached to the LA, therewas nothing substantial in the estate, just a few thousand dollars in cash plus 900 shares in a company by the name of Ziang Kong Co, Ltd (“ZKCL”) and 90,000 shares in another company called Cartegena Industrial Co, Ltd (“Cartegena”).  These were companies which practically belonged to the Deceased.  I shall say more about them below.

12.  According to Madam Chan, she had no notice of the said Citation.  She has further alleged that Madam Jen had deliberately misled and was guilty of material non-disclosure towards the Probate Registry regarding the address for service on Madam Chan which resulted in her being granted an order for substituted service of the Citation and eventually in Madam Chan being bypassed and in Madam Jen being granted the LA.

THE RELEVANT LITIGATION

13.  As mentioned above, there were the legal proceedings instituted by Madam Jen and Franklin against Madam Chan in Shanghai in 2011.

14.  By its Judgment dated 5 September 2012, the local People’s Court in Shanghai ruled partly in favour of Madam Jen and Franklin and partly in favour of Madam Chan in relation to some properties in Shanghai inthe estate of the Deceased.  It does not appear that the properties in question were of any great value.

15.  By another Judgment dated 26 March 2013, the said People’s Court found against Madam Jen and Franklin and dismissed their claim in relation to the proceeds of sale of another property in Shanghai which had been registered under the name of Madam Chan.

16.  On 28 February 2014, Madam Jen in her capacity as the administratrix of the estate of the Deceased instituted the HCA.  The Amended Statement of Claim is 52 pages long.  In it, a number of allegations are made against Madam Chan, including the following:

   (i)   The marriage between her and the Deceased is not valid because the Deceased was mentally incapacitated at the material time.  There are legal proceedings started by Madam Jen through Franklin as her attorney in Canada challenging the validity of the marriage.

   (ii)   Misappropriation and intermeddling of the assets in the estate of the Deceased by Madam Chan.

   (iii)   Undue influence exercised by Madam Chan on the Deceased.

The reliefs claimed in the prayer are also numerous, including in summary the following:

   (i)   Declarations, including a declaration that the Deceased did not have the mental capacity to enter into the said marriage.

   (ii)   Delivery up and restitution of assets.

   (iii)   An account and inquiry.

It should be noted that the original Statement of Claim in the HCA was very substantially amended in March 2017 resulting in the present Amended Statement of Claim.

17.  There were also applications at the end of 2014 and the beginning of 2015 made by Madam Jen against Madam Chan in the HCA for Mareva and freezing injunctions which were unsuccessful before Chow J.

18.  In January 2017, Madam Chan issued the originating summonsin the HCMP.  This has now become the points of defence and counterclaim in the Consolidated Action.  In summary, Madam Chan claims, inter alia, the following reliefs:

   (i)   An order that the grant of the LA to Madam Jen be revoked.

   (ii)   An order that a fresh grant of Letters of Administration to the estate of the Deceased be made to an independent administrator. 

   (iii)   An order that (subject to the consent of Madam Jen and Franklin)the fees of the independent administrator be paid initially by Madam Chan as to 50%, Madam Jen as to 25% and Franklin as to 25%, subject to reimbursement by the estate in due course.

   (iv)   An order that Madam Jen do file and serve on Madam Chan a signed true and just account of the assets and properties in the estate of the Deceased.

19.  Needless to say, there are many cross-allegations between Madam Jen and Madam Chan in the affirmations filed.

20.  I am told by counsel for the parties that the proceedings in Canada challenging the validity of the marriage between the Deceased and Madam Chan have still not been resolved since their commencement in 2014. Mr D’Souza, counsel for Madam Jen, told me that the reason was that both sides’ lawyers had agreed to hang fire pending the determination of the issue of the validity of the marriage by the Hong Kong court. Mr Tang, counsel for Madam Chan, said that there was no such agreement.  No matter who isright, speaking for myself, I find it strange that the determination by the court in Canada on the question of the validity of a marriage which took place in Canada should have to await a decision on the same question by the Hong Kong court.  It does not sound very logical.

21.  At this juncture, I should refer to the three companies which were operated and managed by the Deceased and/or Madam Chan in whichthe Deceased had shares.  They are: ZKCL, Cartegena and another company called Kwai Chung Enterprises Limited (“KCEL”).

22.  Since early 2018, Madam Jen has been trying to take control of those three companies.  According to Madam Chan, Madam Jen sought to do that by unlawfully calling extraordinary general meetings and invalidly appointing herself as a director of those companies. Madam Jen has also started proceedings on the companies front in her capacity as the administratrix of the estate of the Deceased.

23.  One of those proceedings is HCMP 1151/2018 (“HCMP 1151”) the originating summons in which is scheduled to be heard before DHCJ R Ismail SC on 3 April 2019.

THE PRESENT APPLICATION

24.  The summons presently before me was issued by Madam Chan on 19 October 2018.  She claimed an order that:

   (i)   Madam Jen do forthwith lodge in the Registry the LA pending the final determination of the HCMP pursuant to Order 76, rule 4 of the Rules of the High Court (“RHC”);

   (ii)   Madam Jen be suspended from the office of administratrix until further order pursuant to section 33 of the Probate and Administration Ordinance, Cap 10 (“the PAO”);

   (iii)   Madam Jen be restrained from acting as the administratrix of theestate of the Deceased until further order, except for the limited purpose of agreeing to an order for the stay of proceedings in HCMP 1151 before DHCJ R Ismail SC on 3 April 2019.

25.  I granted to Madam Chan an order basically under items (i) and (iii) set out in paragraph 24 above upon the undertaking by Madam Chan through her counsel that she would not dissipate the assets of or destroy the records of the said three companies and would use her best endeavours to represent ZCKL in dealing with the prosecution by the Inland Revenue Department against that company for failure to file a tax return.  I did not think that an order under item (ii) in paragraph 24 above would be necessary in all the circumstances.

THE REASONS FOR MY DECISION

26.  I set out below my reasoning.

27.  To begin with, I should point out that the originating summonsin the HCMP, although not issued as a writ out of the Probate Registry under a case number prefixed by “HCAP”, can be treated as a probate action to which RHC Order 76 applies.  The old rule that a probate action must havebeen endorsed with the leave of the Probate Registrar before issue has ceased to be effective.  See footnote 1 to PD20.2/2 in Hong Kong Civil Procedure 2019 Vol 1 page 2117.  It is a claim for the revocation of a grant of letters of administration and it has been ordered by DHCJ N Francis to be treated as having been begun by writ.

28.  Order 76, rules 1 and 4 provide as follows:

“ 1. Application and interpretation (O. 76, r. 1)

(1) This Order applies to probate causes and matters, and the other provisions of these rules apply to those causes and matters including applications for the rectification of a will subject to the provisions of this Order.

(2) In these rules probate action(遺囑認證訴訟) means an action for the grant of probate of the will, or letters of administration of the estate, of a deceased person or for the revocation of such a grant or for a decree pronouncing for or against the validity of an alleged will, not being an action which is non-contentious or common form probate business.

(3)   In this Order, will(遺囑) includes a codicil.”

“ 4. Lodgment of grant in action for revocation (O. 76, r. 4)

(1) Where, at the commencement of an action for the revocation of a grant of probate of the will or letters of administration of the estate of a deceased person, the probate or letters of administration, as the case may be, have not been lodged in court, then—

(a) if the action is commenced by a person to whom the grant was made, he shall lodge the probate or letters of administration in the Registry within 7 days after the issue of the writ;

(b) if any defendant to the action has the probate or lettersof administration in his possession or under his control,he shall lodge it or them in the Registry within 14 days after the service of the writ upon him.

(2)   Any person who fails to comply with paragraph (1) may, on the application of any party to the action, be ordered by the Court to lodge the probate or letters of administration in the Registry within a specified time; and any person against whom such an order is made shall not be entitled to take any step in the action without the leave of the Court until he has complied with the order.”

29.  The HCMP being a probate action within the meaning of Order 76, rule 1, the defendant therein (Madam Jen), being the grantee of theLA, would be obliged to lodge the LA in the Probate Registry within 14 days after the service of the proceedings on her.  In view of the fact that she did not do so, the court could make an order requiring her to do so.

30.  Mr D’Souza argued that under Order 76, rule 4(2), the court might exercise its discretion to order or not to order a lodgment and that in the circumstances of this case, applying the ordinary principles in injunction cases, the court should not so order.

31.  I was not sure that Mr D’Souza’s argument about the applicability of ordinary principles in injunction cases in such a situation was right.  Without deciding the point, however, I was prepared to go alongwith it and considered the case on that basis.  My conclusion was still against Mr D’Souza’s client.

32.  The injunction principles are well-known.  There is no need for me to set them out here.

Serious questions to be tried

33.  It is clear to me that so far as the HCMP is concerned there are a number of serious questions which the court cannot determine on affirmation evidence now and which must be tried.

34.  First, there is the question of the mental capacity of the Deceased as at the date of his marriage with Madam Chan in Canada.  In evidence are a number of medical certificates by medical practitioners who attended to the Deceased in Hong Kong and on the Mainland and an expert report by a Dr Wong in Hong Kong.  It is not possible for the court to make a finding on this question now.

35.  Secondly, there is the question of the validity of the said marriage under Canadian law in light of the mental capacity of the Deceased on the day of the marriage as may be found by the relevant court, be it a Canadian court or a Hong Kong court.  In this regard, I should make it clear that I am not making any finding as to how and where the question of the validity of the marriage should be resolved, since there was not really any argument on the point.

36.  Thirdly, there is also the question as to whether Madam Jen had deliberately misled the Probate Registry or been guilty of material non-disclosure in seeking the order for substituted service of the Citation on Madam Chan.

37.  Section 33 of the PAO reads as follows:

“ 33. Revocationof grants and removal of executors

(1) Where it appears to the court that a probate or administrationeither ought not to have been granted or contains an error, thecourt 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 anexecutor 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.”

38.  Subsection (1) of section 33 would be relevant in the context of the point set out in paragraph 36 above.

39.  Finally, the question also arises as to whether the court should remove Madam Jen in any event and replace her by an independent administrator under section 33(3) of the PAO on the ground that “the due and proper administration of the estate and the interests of the persons beneficially entitled thereto so require” as suggested by Madam Chan in light of her allegations that Madam Jen had failed or refused to give an account of the estate and that Madam Jen is seriously biased and has been using her position as administratrix to take revenge on Madam Chan.  For the duty of a personal representative to give an account, see the case of Re Estate of Lee Da Kor [2010] 1 HKLRD 415 at 419 paras 16 – 18.

Balance of convenience

40.  On the question of balance of convenience, I also find that the balance is tipped in favour of Madam Chan.

41.  First, as has been noted above, the Schedule of Assets and Liabilities attached to the LA shows that there are no substantial assets left by the Deceased on his estate.  Mr D’Souza plainly admitted in court that the main assets in the estate were the causes of action against Madam Chan.  Furthermore, it is also accepted that the three companies are not trading and are not really going concerns.

42.  In such circumstances, I do not see how some delay pending the determination of the question of the validity of the marriage would cause irreparable damage to Madam Jen.

43.  On the other hand, if Madam Jen is allowed to continue the litigation against Madam Chan on the basis of the LA and eventually the LA is revoked, then an injustice would have been done against Madam Chan.  Furthermore, Madam Chan may not be able to recover costs from the estate of the Deceased because there are not enough assets.

44.  In this regard, it is relevant to take into account the fact that Madam Chan has submitted that an independent administrator should be appointed in place of Madam Jen. As mentioned above, Madam Chan is willing to pay 50% of the costs and has suggested that Madam Jen and Franklin should pay the remaining 50%, all subject to reimbursement by the estate later.  This offer has been rejected by Madam Jen and Franklin.

45.  Madam Jen accuses Madam Chan of delay in taking out the present application.  On the other hand, it also appears that Madam Jen hasnot been very expeditious in progressing with the HCA either.  Furthermore,Madam Jen does not appear to be very keen to move forward with the Canadian proceedings for the challenge against the validity of the marriage. 

46.  In all the circumstances, I take the view that any delay by Madam Chan in taking out the present application is not serious enough to disentitle her to relief.

47.  I should also mention that there is authority to the effect that once an original grant of representation is lodged in the Probate Registry, the personal representative should not and cannot act further in such capacity.  See the case of Ho Wai Yin v Cheng Suet Yee HCAP 18/2003 (13 February 2004) where Lam J (as he then was) said at para 22 as follows:

“ 22. I do not accept this submission. Order 76 Rule 4(1) requires the lodgment of the grant in court after the commencement of an action for revocation. This is to ensure that nothing could be done on the strength of the grant in the meantime. It does not however mean that in every case where there is a claim for revocation of the grant, the assets of a defendant have to be frozen. If the administration of the estate has not been completed, the personal representative would not be able to continue to administer the same pending the determination of the action. …”

Thus, the injunction under paragraph 24(iii) above would just be one step forward from the natural consequence of the lodgment of a grant in the Probate Registry.

THE WAY FORWARD

48.  I have been informed by counsel that the Case Management Conference in the Consolidated Action went before Madam Justice MimmieChan on 12 March 2019 and that she refused to give directions pending thisapplication before me and the hearing before DHCJ R Ismail SC on 3 April 2019.

49.  As I have observed above, I am of the view that the issues in the HCMP should be resolved first before the HCA should proceed.  The result in the HCMP must affect the further conduct of the HCA.

50.  For the avoidance of doubt, the injunction I have granted in thepresent application does not affect the right of Madam Jen to defend against Madam Chan in her claim for the revocation of the grant of the LA in the HCMP.

51.  As to the further conduct of the Consolidated Action, having expressed my view above, I shall leave it to Madam Justice Mimmie Chan to give directions at the adjourned Case Management Conference.

52.  I should mention that I also made an order that costs of and incidental to the summons issued by Madam Chan on 19 October 2019 be in the cause of the HCMP (being part of the Consolidated Action herein).

HCA 346/2014

[2018] HKCFI 429

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 346 OF 2014

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HCMP 106/2017

[2018] HKCFI 429

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 106 OF 2017

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____________

(Heard Together)

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D E C I S I O N

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Introduction

1.  The hearing before me concerns what can be shortly described, if not entirely accurately, as competing summonses in competing actions.  The position of the parties is for the most part diametrically opposed, I infer, because each perceives some (real or imagined) tactical advantage and/or because, as is all too common with disputes of this nature, the parties rarely agree on anything.

2.  For convenience and in an effort to minimise confusion I shall refer to the parties by their given names.  Jen Kit Josephine (“Josephine”), as Administratrix of the estate of Jen Frank Chia Hsiang (“the Father”), her father, is the plaintiff in High Court Action 346 of 2014 (“the High Court Action”), the defendant to which is Chan Sau Wai Shirley (“Shirley”) (who, though the legitimacy is now one of the key items in dispute, was previously married to the Father, following the passing away of his first wife, Josephine’s mother).  In shorthand terms, Shirley is Josephine’s stepmother.

3.  However, the roles are reversed in High Court Miscellaneous Proceedings No. 106 of 2017 (“the HCMP Action”), where Shirley is the plaintiff and Josephine is the first defendant. The second defendant in the proceedings, Franklin Yuen Yuen Jen (“Franklin”) is Josephine’s brother. Therefore, again, Shirley is Franklin’s stepmother.

High Court Action

4.  The High Court Action was commenced by Josephine against Shirley by Writ of Summons in February 2014.  It is not necessary for the matters presently before me that I set out detailed particulars of the action.  It is sufficient to note that the proceedings involve a number of allegations as regards Shirley’s involvement with the affairs of the Father during his life, in particular claims regarding her dealings with his assets.   Amongst the claims made is that:

(a) from a certain date the Father lacked the, or sufficient, mental capacity to act on his own behalf and/or by reason of the same matters was susceptible to suggestion and influence as regards his affairs and assets;

(b) by virtue of the aforesaid situation, Shirley was able to wrongfully acquire substantial assets in her own name before the Father passed away; and

(c) the marriage between the father and Shirley was not legitimate, because of his lack of capacity, and should be declared void.

5.  The action is being defended by Shirley who denies Jennifer’s claims.  As it bears on the matters before me, I observe that in Shirley’s first (there have since been two amendments) Defence in the High Court Action which was dated and filed on 6 August 2014, it is pleaded that:

(a) it is filed without prejudice to her right to apply for the revocation of the letters of administration of the estate of the Father granted to Josephine (in paragraph 1);

(b) she does not admit the validity of the letters of administration obtained by Josephine and further or alternatively states that Josephine was and is no longer suitable to be the administratrix (paragraph 3 (c)).

6.  At the same time as commencing the High Court Action, Josephine sought and obtained an ex parte Mareva injunction against Shirley in a substantial sum.  Again, it is not necessary for the matters presently before me that I do more than note that this injunction was later set aside and further on a renewed application it was ordered that a new injunction not be granted.  In respect of both matters, the Honourable Mr Justice A. Chow ordered that Josephine pay Shirley’s costs.

HCMP Action

7.  A little more than three years after the commencement of the High Court Action, Shirley commenced by originating summons the HCMP Action against Josephine and Franklin.  Again, it is not necessary for the matters presently before me that I set out detailed particulars of the action.  It is sufficient to note that the principle relief sought is the revocation of Josephine’s letters of administration in respect of the estate of the Father.  Amongst the claims made is that:

(a) Shirley, as the wife of the Father, has a higher priority for the grant of letters of administration in relation to his estate and that Josephine failed to take the necessary steps to give notice to Shirley of the intention to apply for a grant or to inform the court as regards matters relevant to the service of the application on Shirley;

(b) if, as now appears to be the case, Josephine denies the legitimacy of Shirley’s marriage to the Father alleging a lack of capacity, a grant should not have been obtained but a probate action commenced; and

(c) Josephine has failed to properly administer the estate of the Father, including by commencing the High Court Action against Shirley, not least because of what are alleged to be her conflicts of interest.

There are significant disputes of fact and law

8.  While the short summary I have given may not entirely do justice to the claims and issues as they are seen by either set of parties, it should already be abundantly clear that the High Court Action and the HCMP Action are closely interlinked.  With the exception of Franklin, against whom it does not appear that any relief (or, at least, relief of a form that the court could order) is sought, the parties to the actions are the same. Furthermore, many of the factual and legal issues are common to the two actions, and as such any ultimate decision of the court as regards a matter in one action may well have a bearing on the other action.

The present applications

9.  The parties appeared before me in respect of three summonses, one issued by Shirley dated 30 March 2017 and two issued by Josephine dated 21 April 2017.  In short:

(a) Shirley seeks the stay of Josephine’s action against her until her action against Josephine is determined; and

(b) Josephine seeks the stay of Shirley’s action against her until her action against Shirley is determined.

10.  To be fair to Josephine her applications do not solely seek a stay but refer in the alternative to:

(a) the High Court Action and the HCMP Action being consolidated; or

(b) the HCMP action being tried immediately after the High Court Action before the same judge with the High Court Action (her action) being the lead action, and the evidence adduced in both proceedings shall be mutually admissible.

11.  However, for Jennifer to simply largely recite the different alternatives provided for by the rules does not substantially advance matters.  If not earlier, by the time the matter came to court her preferred alternative should have been clearly identified and the necessary directions to give effect to it put forward.

12.  Josephine’s counsel was also not able to justify to my satisfaction why it was thought necessary to issue two summonses, the second of which, somewhat unusually, is referred to as being “without prejudice” to the first.  The terms of the two summonses appear in large part identical, in any event, as a matter of drafting, could easily have been combined in a single summons and in the case of the second summons, in part, simply recite the directions desired at the first hearing which are matters of case management for submission at the hearing.

The need for the HCMP action

13.  I have previously referred to the pleas made by Shirley in her defence to the High Court Action which was filed as early as August 2014 and which appear to raise very much the same issues as regards the revocation of the grant obtained by Jennifer that are the subject of the HCMP Action she filed three years later.

14.  At the hearing I pressed counsel for Shirley regarding the need for the separate HCMP Action.  I queried why the same claims were not brought by way of counterclaim in the High Court Action pursuant to Order 15 Rule 2(1) of the RHC, the terms of which are clearly wider enough to allow this.

Order 76 Contentious Probate Proceedings (“Probate Action”)

15.  Counsel’s response was to refer to and rely on Order 76 of the RHC both as justification for the commencement of a separate action and for doing so by way of an originating summons.

16.  However, Order 76 rule 15(1) of the RHC specifically provides for the bringing by way of a counterclaim in any action the same relief that might otherwise be claimed in a separate action begun as a Probate Action.  It is clear that the objective of the rule is to avoid an unnecessary multiplicity of proceedings.  There follow specific provisions dealing with the procedure to be followed in respect of what is termed a “probate counterclaim”.

Writ of summons or originating summons

17.  Further, each of Order 76, High Court Practice Direction 20.2 and the commentary in Hong Kong Civil Procedure 2018 all make it abundantly clear that a Probate Action may be begun by writ of summons, and indeed should be brought by writ of summons where the proceedings are likely to be opposed and will involve substantial disputes of fact on which oral witness testimony is likely to be required.  With the High Court Action having been on-going and hard fought on both sides for some 3 years, it surely must have been obvious to Shirley’s legal team that her attempt to have Jennifer removed as administratrix would be opposed.

18.  That proceeding by way of an originating summons was very likely not the appropriate procedure also seems not to have occurred to or at least been raised on behalf of Jennifer’s legal team.  Indeed, the submissions of counsel for Jennifer for the hearing before me, in part echo the submissions of counsel for Shirley at the hearing.  He observed that two actions may not be appropriate for consolidation where the result would be that the plaintiff in one action would be the defendant in the other (as would be the case here), that is, unless the claim of the defendant in one action can be ordered to stand as a counterclaim in the action.  This statement I agree with.  However, he goes on to observe that in the present case the types of relief sought are very different and are not complimentary as a counterclaim. Here, with respect, I disagree.  In my view, the challenge by Shirley by way of the HCMP Action to the position of Jennifer as the plaintiff in the High Court Action is inextricably interlinked with the claims by Jennifer against Shirley in the High Court Action.  In a very large part common factual and legal arise and the outcome in one action will very likely bear on the outcome in the other.  I therefore consider that combining the two actions together will likely result in a significant saving of overall time and costs.

19.  That counsel for Jennifer originally maintained a position to the contrary may have been because it was thought to bolster the argument that her action should take precedence over that of Shirley and thus for tactical reasons only.

20.  The submissions of counsel for Jennifer also make the point that the parties to the HCMP Action are not identical in that they include Franklin, Jennifer’s brother.  However, as I have already observed, a simple reading of the originating summons reveals that no relief is sought against Franklin (or, at least, no relief that the court has jurisdiction to grant).  This was acknowledged by counsel for Shirley during submissions before me.  That Franklin, as a person potentially entitled to a grant were Jennifer’s grant revoked, might be required to be served with any “probate counterclaim”, of itself, does not require that he be made a party.  Again, this is clear from the commentary to Order 76 in Hong Kong Civil Procedure 2018 (see note 76/2/2).

21.  In short, it appears that prior to the hearing both Jennifer and Shirley’s legal teams largely shared the same misconceptions that the High Court Action and the HCMP Action were not suitable for consolidation, that the claims made in the HCMP Action could not have been made the subject of a counterclaim in the High Court Action and that the originating summons procedure was appropriate to deal with the claims made in the HCMP Action.

22.  As the size of the court file amply demonstrates, with this misconception, since the commencement of the HCMP Action the parties have filed and served voluminous further affirmation evidence, adding to the already substantial volume filed in respect of the previous interlocutory injunction proceedings in the High Court Action.  In my view, a large part of this time and what must have been significant legal costs has likely been wasted (on both sides) or, at the very least, could have been better utilised on preparing full and properly particularised pleadings in a consolidated single action.

The affirmation evidence contains substantial argument and submissions

23.  While I have not read all of the affirmation evidence of the parties in the HCMP Action, I would observe that much of that which I have read (again on both sides) is not confined to setting out the facts but in a large part is made up of argument and submissions (often repetitive of the parties evidence in the High Court Action, which again, based on that which I have read, is also full of argument and submissions).  This further illustrates why the two actions require that the issues be framed by pleadings.

24.  I also observe that the same criticisms could be levied at the submissions of the parties’ respective counsel for the hearing before me which, at some considerable length, spend much of the time rehearsing the substantive issues in the two actions and insufficient time addressing the immediate issues, which I view as essentially matters of case management.

25.  Overall, it is hard to avoid the conclusion that throughout the course of the two actions the parties (and their legal teams) have largely been focused on trying to secure every possible perceived tactical advantage over the other and not on how best to resolve the issues in a cost effective and timely way.  Each sides initial insistence before me that their claims must be addressed first before the claims of the other clearly point to this.

Consolidation

26.  O 4 r 9(1) of the RHC, provides that where two or more causes or matters are pending and if it appears to the court:

(a) that some common question of law or fact arises in both or all of them, or

(b) that the rights to relief claimed therein are in respect of or arise out of the same transaction or series of transactions, or

(c) that for some other reason it is desirable to make an order under this rule

the court may order those causes or matters to be consolidated on such terms as it thinks just or may order them to be tried at the same time, or one immediately after another, or may order any of them to be stayed until after the determination of any other of them.

27.  As the commentary to the rule makes clear, the main purpose of consolidation is to save costs and time.  Whether or not to order consolidation is a matter in the courts discretion and involves a balancing exercise and regard to the facts of each case.  The aim is to achieve convenience and economy in case management. Consolidation does not change a party’s substantive’s rights.  Having all related issues, factual or legal, before one judge, allows that judge to decide how each should be addressed, including which, if any, should be dealt with first having regard to their significance or potential impact on secondary issues. I refer in particular to the reference in the commentary at 4/9/2 of the RHC as follows:

“in making case management decisions, the court is primarily concerned with savings in time and costs and also with the avoidance of unnecessary delay, complexity, overloading of issues the inconvenience of having experts and witnesses repeating their evidence.”.

28.  Having regard to the respective issues, factual and legal, in the High Court Action and the HCMP Action I am of the view that consolidation is desirable.

The agreed order

29.  Having given an indication of my views as set out in this decision to counsel for the parties during the course of the hearing I invited them to endeavour to agree the appropriate order during a short adjournment.

30.  On the hearing resuming, the court was provided with an agreed draft order which has substantially formed the basis for the order I now make which I set out below:

(a) the HCMP Action be continued as if begun by Writ of Summons;

(b) the High Court Action and the HCMP action be consolidated to heard together as a single action with Jennifer as plaintiff and Shirley as defendant;

(c) the Amended Statement of Claim of Jennifer in the High Court Action dated and filed on 22 March 2017 do stand as her consolidated Points of Claim in the consolidated action;

(d) the Re-Amended Defence of Shirley in the High Court Action dated and filed on 8 June 2017 do stand as consolidated Points of Defence in the consolidated action;

(e) Shirley, the defendant in the consolidated action do have leave to file and serve an amended consolidated Points of Defence and Counterclaim, if any, within 28 days;

(f) the Re-Amended Reply of Jennifer in the High Court Action dated and filed on 4 September 2017 do stand as her consolidated Points of Reply in the consolidated action and she do have leave to file and serve an amended consolidated Points of Reply and Defence to Counterclaim, if any, within 28 days thereafter

(g) Shirley, the defendant in the consolidated action do have leave to file and serve a consolidated Points of Reply to Defence to Counterclaim, if any, within 28 days thereafter;

(h) the case management conference in the High Court Action listed for 20 March 2018 at 10:30 a.m. be vacated;

(i) a case management conference for the consolidated action be fixed in consultation with counsel’s diaries with an estimated length of one hour not before 1 June 2018.

The position of Franklin

31.  I have previously observed that the inclusion of Franklin as the second defendant to the HCMP Action appears to have served no purpose.  However, it is for Shirley, as the defendant to the consolidated action, to make any ‘probate counterclaim’ or other counterclaim as she is advised. In any event, for the avoidance of doubt, the procedure provided for under Order 76 in relation to any such ‘probate counterclaim’ should be followed, in particular the provisions of order 76 rule 15(4), and, if appropriate, consideration will need to be given as to whether notice of any such counterclaim should be given to Franklin if he is not a party to it.

Costs

32.  While the parties respective counsel were largely able to agree a proposed draft of the order required to achieve consolidation and providing for the filing and service of amended pleadings, as perhaps was inevitable, they were not able to agree as regards costs.

33.  Counsel for Jennifer submitted that she should be entitled to the costs both of Shirley’s summons and her two summonses, as she had achieved substantially what she wanted by her summonses.  Counsel further submitted that Shirley’s counsel’s concession regarding the appropriateness of consolidation had only been made belatedly at the hearing.

34.  Counsel for Shirley submitted that the normal costs order when consolidation is ordered would either be costs in the consolidated cause or costs reserved.  Counsel further submitted that whatever the wording of Jennifer’s two summonses, which, as I have said, simply listed in the alternative various options without indicating any clear preference, at the outset of the hearing her primary position remained that her action should take precedence.

35.  As will be apparent from my observations during the course of this decision, I am of the view that at times both parties and their legal teams have lost sight of their duty to cooperate and seek to agree matters to promote time and cost efficiency (their own and that of the court) in the conduct of the two actions.  As a result, substantial time and costs have been expended on both sides that in my view might otherwise have been avoided or, at the very least, better utilised.

36.  I am of the view that Shirley both delayed and did not follow the appropriate procedure as regards bringing forward the challenge to Jennifer’s appointment and her conduct of the administration of the Father’s estate.  However, the HCMP Action having been issued, Jennifer does not appear to have made substantial efforts to seek Shirley’s agreement that the action should proceed as if begun by writ or that it be consolidated with the High Court Action.  As regards procedural matters, it would appear that both parties were labouring under the same misconceptions.

37.  Therefore, I do not consider that there is any clear ‘winner’ as regards the three summonses before me.  Accordingly, I make an order nisi that the costs of the three summonses, including the hearing before me, and the costs of the HCMP Action up to date of consolidation be reserved. On the assumption that, by way of a ‘probate counterclaim’, Shirley renews her claim regarding the revocation of Jennifer’s appointment, such costs will likely fall to be decided by the outcome of that claim but this will be a matter for the judge who ultimately decides that issue.  I give leave to any party who seeks a varied costs order to apply in writing with reasons within 14 days failing which the order will become absolute.

Case management conference

38.  As appears from my decision, the issue between Jennifer and Shirley underlying the hearing before me was which of their respective claims should be dealt with first at a trial. Seemingly each of them, guided no doubt by their respective legal teams, had previously seen the sequencing in which their completing claims are dealt with as a matter potentially giving one or the other significant tactical advantage. However, in the circumstances of this matter, I view any perceived tactical advantage as largely illusory.  But, in any event, as I made clear to Jennifer and Shirley’s respective counsel, I do not consider that this issue of sequencing is one the court can and should decide far in advance of even properly particularised pleadings being filed and served.  In due course, the two having been consolidated, after consolidated pleadings have been filed and served, after witness statements have been filed and served, and thereby the issues, factual and legal, have been clearly identified, the court will be far better placed to form a view as to how the issues should be addressed at trial.