HCAP 21/2020
[2021] HKCFI 903
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
PROBATE ACTION NO 21 OF 2020
_______________________
| | IN THE ESTATE OF CHOW FOOK LIN (周福連) of Flat 4C, Block 20, Phase I, Parc Versailles, Tai Po, New Territories, Hong Kong, widow, deceased (“the Deceased”) |
| | and |
| | IN THE MATTER OF sections 33 and 56 of the Probate & Administration Ordinance (Cap. 10) |
| | and |
| | IN THE MATTER OF Order 85 rule 2 of the Rules of the High Court (Cap. 4A) |
_______________________
BETWEEN
| LAM WAI WING (林惠榮) | Plaintiff |
| and |
| LAM TAK YUEN (林德元) | Defendant |
______________________
Before: Hon B Chu J in Chambers (Open to Public) (By Paper Disposal)
Date of Defendant’s 1st Submissions: 21 December 2020
Date of Defendant’s 2nd Submissions: 25 January 2021
Date of Plaintiff’s Submissions: 18 February 2021
Date of Defendant’s Reply Submissions: 25 February 2021
Date of Plaintiff’s Supplemental Submissions: 11 March 2021
Date of Defendant’s Further Reply Submissions: 17 March 2021
Date of Decision: 12 April 2021
__________________________________
DECISION
(Extension of Time for Leave to Appeal
and Discharge of Injunction)
__________________________________
Introduction
1. This is a probate action and the plaintiff (“P”) and the defendant (“D”) are two out of three siblings. There are now 2 summonses issued on 21 December 2020 by D for this Court’s determination:
(1) a summons for extension of time and to apply for leave to appeal against an “unless order” of this Court, and D to have relief from sanction (“Leave Summons”);
(2) a summons to discharge an injunction made by this Court (“Discharge Summons”).
2. The “unless order” of this Court was made on 30 November 2020, namely that unless D was to comply before the specified deadline with an earlier order of this Court, D be debarred from taking any further steps in this action and that there be liberty for P to apply for judgment (“Unless Order”).
3. The earlier order was made on 4 September 2020 namely that, by the deadline specified, that (i) D was to lodge with the Probate Registry the original letters of administration granted to him in respect of the estate of his deceased mother (“Estate”) pursuant to Order 76 rule 4(1)(b) RHC and (ii) D was to file an affirmation describing the testamentary script of his mother pursuant to Order 76 rule 5 (“O76 Order”).
4. The Discharge Summons was in respect of an injunction made also on 4 September 2020 pursuant to which D has been restrained from disposing or dealing with or diminishing the value of any assets of the Estate until end of the trial or until further order (“Injunction”).
Background
5. The parties’ father Lam Chuen Dun (“Father”) and mother Chow Fook Lin (“Mother”) passed away respectively in December 2013 and April 2018. Father and Mother had 3 children, namely P being the eldest daughter and 2 sons, the older being D and the younger Lam Chi Yuen (“Chi Yuen”).
6. Mother died leaving a will made on 28 September 2017 (“Will”). The Will was said to be prepared by a solicitor Amanda Chan Yuk Ying of the solicitors firm Messrs Kevin Li & Co and was executed by Mother in the presence of the solicitor and a clerk. P was appointed the sole executor and trustee of the Will and Mother’s estate (“Estate”) was bequeathed to P and Chi Yuen in equal shares. Thus, D is not the executor nor a beneficiary of the Estate.
7. For reasons given by her[1], P did not immediately apply for probate after Mother’s death. Unbeknownst to P and Chi Yuen, in or about early 2019, D applied for a grant of letters of administration of the Estate. It was D’s case that he did not know about the existence of the Will at the time. As a result of D’s application, letters of administration of the Estate were granted to D on 20 May 2020 (“LA”) with a Schedule of Property dated 22 March 2019 and an Amended Schedule of Property dated 1 June 2020 (collectively “Schedule”).
8. According to P, the Estate consisted of, amongst other things, (i) cash in a joint account of P and Mother at the Chong Hing Bank (“Joint Account”) and accounts held by Mother at the Bank of China (HK); (ii) securities held in a securities company; (iii) 2 units in an industrial building in Kowloon and for easy reference are referred to as “405 Property” (which is subject to a mortgage) and “619 Property”; (iv) other properties said to be held by D on trust for Mother; (v) jewellery and some cash.
9. However, the Schedule attached to the LA only listed the 405 Property and the 619 Property.
10. Both the 405 Property and the 619 Property have been let to tenants and there are outgoing expenses relating thereto including mortgage payments in relation to the 405 Property.
11. Prior to Mother’s death, she and P were joint tenants of a property referred to as “Parc Versailles Property” (which was/is subject to a mortgage) of which P is now the sole owner after Mother’s death.
12. According to P, she was sent a “What’s App” message from the tenant of the 405 Property who informed her that D had represented himself to be the landlord and the tenant was told to pay D the rent instead of P and that the tenant had asked P whether D was representing P in respect of the tenancy of the property[2]. According to P, she was perplexed as D was well aware of the fact that Mother had made the Will and that D was excluded therefrom. Chi Yuen had filed an affirmation to support P’s case and he had set out in his affirmation a conversation he had with D on 3 July 2020. Chi Yuen had asked D why he had told the tenant of the 405 Property to pay the rent to him and D had responded that the property belonged to him and claimed that the Will was a fake will and that it was a crime to give effect to the Will. Anyway, P’s and Chi Yuen’s evidence was that D was well aware of the Will.
13. Upon being alerted by the tenant of the 405 Property, P and Chi Yuen conducted land searches at the Land Registry and discovered that D had registered the LA against the two properties. P said she tried to reach out to D but to no avail.
14. P then issued the writ herein on 4 August 2020, seeking amongst other things that: (i) an order for the LA granted to D be revoked; (ii) an order that P be granted probate of the Estate upon compliance of all usual and necessary formal and procedural requirements; and (iii) consequential orders for accounts and delivery up of assets, monies and property to the Estate by D.
15. The writ was served on D on 5 August 2020 and on 13 August 2020, D filed an acknowledgment of service indicating that he intended to contest the action.
16. At the time of service, the writ was accompanied by a letter from P’s solicitors to D reminding him to deposit the original LA within 14 days with the Court pursuant to Order 76 rule 4(1)(b) of RHC and D was “strongly advised to seek independent legal advice in respect thereof”[3].
17. On 20 August 2020, P issued an inter-partes summons to seek orders including that : (i) D be restrained from disposing or dealing with or diminishing the value of any assets of the Estate under Order 29 rule 1 of the RHC, and (ii) D to within 7 days set up a trust account for the Estate, for the purpose of depositing any monies including any profits generated, received or to be received by D arising out of or in connection from the Estate, and (iii) D be restrained from dealing with the monies in the trust account save for the purpose of paying ongoing reasonable expenses for the maintenance of the Estate (“Injunction Summons”).
18. The following day, ie 21 August 2020, P’s solicitors had sent to D by way of service a copy of the Injunction Summons together with P’s and Chi Yuen’s supporting affirmations, and D was again reminded in P’s solicitors’ covering letter to comply with Order 76 rule 4(1)(b) and to deposit the original LA into Court on or before 27 August 2020.
19. Notwithstanding being reminded by P’s solicitors to lodge the original LA into Court and to file the affirmation of testamentary script, D had failed to do so, and further he filed 2 documents in Chinese on 18 August 2020, which appeared to be of same contents and purported to be his defence. In those “defences”, D had claimed that Mother had a brain tumour in 2017 and it was not possible that she could have made the Will and that he objected to the LA being revoked as it was obtained lawfully. These two documents headed “defence” were filed prior to P having filed any statement of claim.
20. Pursuant to Order 76 rule 7, P was to file her statement of claim 8 days after D had complied with Order 76 rule 5. Due to D’s failure to comply with rule 5, P then issued a summons on 1 September 2020 for time extension to file her statement of claim (“Extension Summons”).
21. P’s Injunction Summons and Extension Summons were both fixed for a 30 minute hearing before this Court on 4 September 2020 (“1st Hearing”). D appeared in person at the 1st Hearing.
22. At the 1st Hearing, the Court had in fact provided Chinese versions of Order 76 rule 4 and 5 to D and this Court had explained to D the provisions therein, and had proposed to give him further time to read the same. D had initially claimed his eyesight was slightly defective and the Court had suggested that the Court interpreter to explain to him the relevant provisions of Order 76, whereupon D then said he had understood what was explained by the Court and did not need any interpretation. D was thus fully aware of the provisions of Order 76 rules 4 and 5. This Court had advised D that he should seek legal advice and D had said at the time he would go and consult a solicitor.
23. As to the opening of the trust account as sought by P in the Injunction Summons, D had no objection to a trust account be set up by him for the benefit of the Estate as sought by P and that he would collect the rent and kept the rent for the Estate pending the discussion of the siblings. D then insisted that P should first provide him with all the information about the tenancy agreements and/or the tenants and their contact information, otherwise there was no use for him to open such an account. When this Court asked D whether he agreed not to deal with the Estate, D did not respond directly and only indicated that he would be willing to collect the rent and to keep the rent pending the discussion of the 3 siblings before any further dealing by him.
24. The Court had suggested that the trust account could perhaps be held by a neutral third party, ie a stakeholder, or jointly held by all 3 siblings. The Court further gave time for the 3 siblings to discuss as to how to collect the rent and preserve the monies of the Estate.
25. After discussion, Mr Pang on behalf of P had proposed that an account be opened by all 3 siblings for the collection of rent and payment of outgoings of the two properties, but this was objected to by D. Although D had later clarified that he was not really objecting to that, he insisted on being provided all the rental information and all information regarding the tenants prior to the account being opened. The Court had suggested that the account be opened first, but D then said it was too troublesome for an account to be opened by 3 siblings or for a solicitor to collect the rent as a stakeholder, as there would be no flexibility. There was clearly a serious distrust between the siblings and it was also clear D wanted to be the one in control of the collecting of rent.
26. It was under the above circumstances that the Court decided to grant the Injunction to maintain the then status quo until determination of the action or until further order. The Court in the end made no order in relation to the opening of a trust account by either party. As the requirements under Order 76 rule 4(1) (b) of RHC had not been complied by D and in fact at the 1st Hearing, the requirements under Order 76 rule 5 of RHC had not yet been complied with by not only D but also P, in the end, this Court made the O76 Order.
27. At the 1st Hearing, D had insisted on reading out aloud his letter of submissions to the Court. In fact, the letter indicated that D was aware of the nature of the summonses and he never sought English transactions of any documents at the 1st Hearing. In any event, D had been advised to seek his own legal advice and to take out any further applications, if necessary.
28. Pursuant to the O76 Order, this Court granted leave to P to file and serve her statement of claim and an affirmation of testamentary script within 28 days thereof and D was also ordered to lodge with the Probate Registry the original of the LA and to lodge an affirmation of testamentary script within 28 days.
29. Thereafter, at no time did D apply for leave to appeal against the O76 Order, or the Injunction, nor did he make any further application for any order, or to discharge the Injunction. He simply ignored the O76 Order.
30. P’s statement of claim was later filed on 30 September 2020. P’s affirmation of testamentary script was filed by way of her 2nd affirmation on 30 September 2020.
31. As D had failed to comply with the O76 Order, on 13 November 2020, P then took out an inter-partes summons seeking 2 unless orders (“Unless Summons”), namely:
(1) Unless D, on or before a deadline to be imposed by the Court, do comply with the O76 Order and to lodge the original LA and to file his affirmation of testamentary script, D be debarred from taking any step in this action and there be liberty for P to enter judgment against him;
(2) Unless D, on or before a deadline to be imposed by the Court, do file a statement of truth verifying the two defences filed by D on 18 August 2020, those defences be struck out and expunged.
32. The Unless Summons was fixed for a hearing before this Court on 20 November 2020 (“2nd Hearing”). D again appeared in person. This time, D complained that the documents in this action were in English which he could not understand. This Court then adjourned the Unless Summons to a hearing on 30 November 2020 and directed P to provide Chinese translations of all the relevant documents to D, and further gave leave to D to file, prior to 30 November 2020, any affirmation to oppose P’s Unless Summons.
33. D did not file any affirmation to oppose the Unless Summons, nor did he comply with the O76 Order in lodging the original LA into the Probate Registry and the filing of his affirmation of testamentary script.
34. At the hearing on 30 November 2020 (“3rd Hearing”), D’s present solicitors and his then Counsel Mr George Chu turned up. At no time prior to the 3 Hearing did D apply for further time to comply with the O76 Order or to file any affirmation to oppose the Unless Summons. Most of the time, Mr Chu was making submissions in relation to D being given leave to file a proper defence. In fact, in relation to the O76 Order, Mr Chu had indicated he had no objection to the order and had mentioned it was “standard procedure”. When asked when D would comply with the O76 Order, Mr Chu sought a further 21 days. The Court had pointed out that D had been delaying in complying, and Mr Chu said he understood and that he had explained to D that it was no use for him to hold on to the original LA, as the tenants were not paying the rent to him.
35. Thus, at the 3rd Hearing, D’s own Counsel had accepted that it was no use for D to hold on to the original and he only asked for 21 days for D to comply with the O76 Order. There was no real opposition to the Unless Order being made.
36. As a result, this Court made two unless orders at the 3rd Hearing:
(1) The Unless Order, which provides essentially unless D complies with the O76 Order and lodges the original LA with the Probate Registry and to file and serve his affirmation of testamentary script by the deadline imposed, D be debarred from taking any step in this action and liberty for P to enter judgment against D and D to pay P’s costs of paragraph 1 of P’s summons of 13 November 2020, to be summarily assessed;
(2) The 2nd order provides that the two defences filed by D on 18 August 2020 be treated as not to be appropriate defences, and unless D files his defence with a statement of truth by the deadline imposed, D be debarred from filing any defence and counterclaim (if any) and D to pay P’s costs of paragraph 2 of P’s summons of 13 November 2020, to be summarily assessed.
37. The deadline in the two unless orders was not later than 4 pm on or before 21 days after the date of the unless orders. On 18 December 2020, D filed his defence and counterclaim (collectively “Defence”).
38. However, D failed to comply with the Unless Order by the deadline.
39. On 21 December 2020, D issued the Leave Summons and the Discharge Summons. The summonses were fixed for only a 3 minute hearing on 27 January 2021. On the same day of the issue of the 2 summonses, D’s solicitors lodged D’s draft grounds of appeal (“Draft Grounds”) and written submissions (“D’s 1st Submissions”). Two days prior to the hearing on 27 January 2021, D through his present Counsel Mr Michael MH Leung lodged further submissions (“D’s 2nd Submissions”). This Court then directed the matter be adjourned to be dealt with on papers.
40. Subsequent thereto, P’s submissions were lodged to which D lodged reply submissions (“D’s 3rd Submissions”). However, due to new matters being raised in D’s 3rd Submissions, P was given leave to file supplemental submissions and D then lodged his final reply submissions on 17 March 2020 (“D’s 4th Submissions”).
The Leave Summons
41. The Draft Grounds are:
(1) Ground 1 – The Unless Order was inappropriate and the consequence of sanctions are overly serious;
(2) Ground 2 – In granting the Unless Order, the Court failed to consider:
(a) D had only failed to comply with the O76 Order once previously;
(b) D was already injuncted (sic) from disposing or dealing with or diminishing the value of any asset of the Estate. Since there was minimal risk for D to dissipate the assets of the Estate, it was inappropriate for the Court to consider the Unless Order.
42. D’s 1st Submissions focused on the Discharge Summons rather than the Leave Summons save that it was submitted that if the original LA was lodged, then the Discharge Summons would become academic. In D’s 2nd Submissions, the Grounds were somewhat differently worded, as follows:
(1) Ground 1 – The Unless Order and its draconian consequences were unnecessary given that there was the Injunction in place and that unless orders stipulating the consequence that a case was to be dismissed should not be given as a matter of course but only as a last resort, referring to paragraph 45 of Mitora Ptd Ltd v Agritrage International (Pte) Ltd[4];
(2) Ground 2 – D had not failed to comply with the O76 Order continuously or repetitively.
43. Apart from setting out the above, D’s 2nd Submissions on the Leave Summons was mainly that the Unless Order was unnecessary as there was the Injunction in place.
44. Mr Leung had further submitted that as section 3(1) of the Probate and Administration Ordinance provides the Court with the overriding powers to revoke any grant of probate and in such scenario, D’s non compliance should be dealt with by other means such as costs consequences, or perhaps, the sanctions of the Unless Order should be drafted so that the consequence of non-compliance is that the LA will be revoked by the Court. It is not quite clear as to what Mr Leung was trying to submit, since the revocation of the LA is in fact an order which is being sought by P in her statement of claim and if judgment were granted to be granted P , then this would include the revocation of the LA. Anyway, such submissions seemed somewhat misconceived.
45. First, as set out in Ma Wah Yan & Others v Dharma Realm Buddhist AssociationInc& Others CACV 179 of 2016, in deciding whether extension of time should be granted, and in accordance with settled practice, the following criteria are to be considering in deciding whether extension of time should be granted[5]:
(1) Length of delay
(2) Explanation for the delay
(3) The merits of the intended appeal
(4) Prejudice to the other party
46. The deadline for D to apply for leave to appeal was on 14 December 2020 and D’s Leave Summons was issued on 21 December 2020. Although the delay of 7 days was not a long one, D should still provide a proper explanation for the delay. The reason for the delay given by D was set out in paragraphs 28 – 32 of his supporting affirmation. He had said that when he began to seek legal advice in respect of the O76 Order and the Unless Order, most lawyers advised him that Order 76 is a strict rule and they had looked at the O76 Order and the Unless Order in isolation to the Injunction. Then, according to D, one of his lawyers discovered P’s failure of material disclosure in P applying for the Injunction and that this discovery was made at an extremely late stage. D felt aggrieved and that as the Injunction was applied for by P wrongfully, the Court should not look at Order 76 in isolation.
47. Thus, the only reason D gave for the lateness in issuing the Leave Summons was that he or his lawyer only discovered late that there was allegedly material non disclosure on the part of P in applying for the Injunction.
48. D’s evidence indicated that he received the legal advice on the discharge of the Injunction after the time to seek leave to appeal had expired. There was however no explanation given by him as to why he had not complied with the O76 Order and the Unless Order before the specified deadline and/or prior to him receiving such an advice, or to apply for leave to appeal against the Unless Order. In any event, as pointed out by Mr Pang on behalf of P whether D will be successful with the Discharge Summons or not is irrelevant to his obligation to comply with Order 76 rules 4 and 5.
49. To reiterate, at the 1st Hearing, this Court had reminded D the requirement of lodging the original LA. There was no indication from D at the 1st Hearing that he could not understand the Injunction Summons or the Extension Summons, and in fact when asked, D admitted that he did understand a little and as said earlier, he had prepared a letter of his submissions which he read out. Upon this Court granting the Injunction and the O76 Order, there had been no appeal against these orders. D simply failed to comply with the O76 Order within the time specified therein and had offered no reasonable explanation for such failure. Thus, D can be said to be in contempt of this Court’s order and this Court could have declined to hear him at the 2nd Hearing. Anyway, at the 2nd Hearing, D had still not offered any reasonable explanation as to why he had not complied with the O76 Order. Nevertheless, this Court did give D further time to file his opposing affirmation and adjourned the matter to the 3rd Hearing. Nothing was filed by D. The 3rd Hearing was conducted in Chinese which D could fully understand. As accepted by his then Counsel the procedures in Order 76 are “standard procedures” which D should have complied.
50. More importantly, as mentioned earlier, at the 3rd Hearing, there was no opposition from his then Counsel to the Unless Order being made. It was under such circumstances that the Court granted the Unless Order.
51. Thus, to say that D had only failed to comply with the O76 Order once previously was not accurate.
52. Secondly, as pointed out by Mr Pang, which I agree, the “academic” point goes to the non-compliance period between the Unless Order and the issue of D’s Leave Summons and the Discharge Summons, and does not explain why D did not comply with the O76 Order in the first place, in particular when there was no appeal against either the O76 Order or the Injunction Order.
53. Thirdly, even if D were to succeed with the Discharge Summons, D would still have to lodge the original LA and the affirmation as to the testamentary script under Order 76, and thus whether the Discharge Summons is allowed or not is a different issue.
54. Further, as pointed out by Mr Pang, in any event, the “academic” point only relates to the lodging of the original of the LA but not to the filing of the affirmation of testamentary script. There was no reason nor explanation as to why D had not even filed the affirmation of testamentary script.
55. As said, there was no opposition to the Unless Order at the 3rd Hearing. Thus, in my view, D has not been able to demonstrate that there is any reasonable prospect of success in his intended appeal nor is there any other reason in the interests of justice why the appeal should be heard.
56. Even though P had not filed any affirmation in response to D’s supporting affirmation for his Leave Summons, the fact that there has already been such a long delay in D’s complying with the O76 Order and the Unless Order must mean that P has been deprived of the opportunity to apply for the grant of probate of the Will, and there has been a delay to the administration of the Estate, and there is prejudice to P and beneficiaries of the Estate.
57. Having considered all the above, I decline to grant extension of time and/or leave to D to appeal against the Unless Order.
Relief from sanction
58. The legal principles of whether relief from sanctions should be allowed are set out in Order 2 rule 5 of the RHC, namely:
“5. Relief from sanctions (O. 2, r. 5)
(1) On an application for relief from any sanction imposed for a failure to comply with any rule or court order, the Court shall consider all the circumstances including—
(a) the interests of the administration of justice;
(b) whether the application for relief has been made promptly;
(c) whether the failure to comply was intentional;
(d) whether there is a good explanation for the failure to comply;
(e) the extent to which the party in default has complied with other rules and court orders;
(f) whether the failure to comply was caused by the party in default or his legal representative;
(g) in the case where the party in default is not legally represented, whether he was unaware of the rule or court order, or if he was aware of it, whether he was able to comply with it without legal assistance;
(h) whether the trial date or the likely trial date can still be met if relief is granted;
(i) the effect which the failure to comply had on each party; and
(j) the effect which the granting of relief would have on each party.
(2) An application for relief must be supported by evidence.”
59. In D’s 1st Submissions, all that was submitted on behalf of D for relief from sanction was that D had no intention to flout the rules or order of this Court but he intended to apply for a discharge of the injunction and that if the original LA had been lodged, the Discharge Summons would become academic and not be heard[6].
60. In D’s 2nd Submissions, it was then submitted by Mr Leung that D be granted relief from sanction by reason that (1) the Unless Order and its consequences were too severe given that D was already restrained from dealing with the assets of the Estate and D had not exhibited a continuous or repetitive disregard of any previous orders; (2) due to the existence of the Injunction, the assets of the Estate were never at risk despite D had not lodged the LA; (3) if D had lodged the LA, the Discharge Summons would be academic; (4) D did not deliberately fail to comply with a court order as he had complied with the other unless order; (5) D had immediately applied for relief from sanction after his non-compliance; and (6) P did not suffer any losses as a result of D’s non compliance since the assets of the Estate could not be disturbed by D due to the Injunction.
61. In my view, (2), (3) and (6) above are misconceived.
62. The lodging of the original LA to the Probate Registry may only prevent D from administering the Estate from the date of lodging. However, the LA was granted to D on 20 May 2020 and on the same day D had immediately lodged the LA for registration at the Land Registry against both the 405 Property and the 619 Property and had on 3 July 2020 attempted to collect rent from the tenant of the 405 Property. Although it would appear that the rents had all along been deposited by the tenants of the two properties into the Joint Account to which P has had sole access after Mother’s death, it is not quite clear as to whether other steps had been taken by D to administer the Estate. In fact, even after the Injunction, D had instructed his present solicitors to write to the tenant/s to seek information in relation to payment of rental.
63. As said earlier, at the 1st Hearing, this Court took the view that the Injunction was necessary to maintain and preserve the assets of the Estate, particularly in light of D refusing to agree to have a trust account held by an independent stakeholder or held by the 3 siblings jointly until all information of the tenants/tenancies had been provided to him and failing to lodge the original LA and to file his affirmation of testamentary script.
64. As to (1), (4) and (5) of Mr Leung’s 2nd Submissions, as said earlier, D was already in contempt of the O76 Order by the 2nd Hearing. D only issued the Leave Summons and the Discharge Summons on 21 December 2020, the last day for him to comply with the Unless Order.
65. In any event, it was only in D’s 3rd Submissions that proper submissions were put forward in relation to those factors set out in Order 2 rule 5.
66. It is not disputed that the Court will take into account all the circumstances of the case in considering those factors under Order 2 rule 5. As set out in Top One International (China) Property Group Co Ltd v Top One Property Group Ltd [2011] 1 HKLRD 606 and as submitted by Mr Leung, the test is no longer restricted to considering whether the non-compliance was “intentional or contumelious”.
67. Further in Daimler AG v Leiduck [2012] 3 HKLRD 119, Fok JA, as he then was, had observed at paragraph 58 thereof that:
“It is not in the interests of the administration of justice that serious findings go by way of default against a party, especially since, pursuant to O.1 r.2(2), the Court is enjoined to recognise that the primary aim in exercising its powers is to secure the just resolution of disputes in accordance with the substantive rights of the parties (O.2 r.5(1)(a)).”
68. In the present action, the parties are siblings and it concerns the validity of the Will. As seen in the Defence and Counterclaim filed by D, the main issue is whether Mother had the testamentary capacity at the time of the making of the Will. There had even been a vague allegation that the Will was forged. Anyway, the effect of the Unless Order would be that D be debarred in taking any further steps in this action or contesting the validity of the Will.
69. Further, in the circumstances if the validity of the Will is upheld, D would not be entitled to any part of the Estate and P and Chi Yuen would each be entitled to ½ of the Estate, whereas if D were to succeed in contesting the validity of the Will, under the law of intestacy (on the assumption that there are no other testamentary script/s), the 3 siblings would each be entitled to 1/3 of the Estate.
70. Having considered all the above and the circumstances of this case and in the interests of administration of justice, I have decided to give D a further chance and grant him relief from the sanction but on condition that he lodges the original/official LA into the Probate Registry and to file an affirmation of testamentary script within 7 days of this order and that D will also have to pay P’s costs of the application for relief to be summarily assessed on indemnity basis. Costs are awarded on a higher scale as D has been in contempt of this Court’s order.
The Discharge Summons
71. It was submitted on behalf of D that P had come to seek the Injunction with “unclean hands” and that there had been “failure of material disclosure” on the part of P in relation to the rents from the two properties which had in fact continued to be deposited into the Joint Account.
72. First of all, as pointed out by Mr Pang, the Injunction Summons was an inter-partes summons. Notwithstanding this, it was not disputed that P should place all relevant information before the Court.
73. Secondly, D himself had admitted that he knew that prior to Mother’ passing away, P was responsible for maintaining the properties including collecting the monthly rents and that he had believed that P was not collecting the rents on behalf of the Estate but instead siphoning off the assets of the Estate for her personal use.
74. Thirdly, P had in fact produced copy of a bank statement of the Joint Account in her affirmation supporting the Injunction Summons, which showed there were regularly two monthly sums deposited into the Joint Account and which D himself said he believed were the rents. Thus, although P did not expressly made it clear that those two amounts were the rents, there was no “hiding” thereof.
75. Fourthly, P had stated in her affirmation that the tenant had said that D asked him to pay D rent instead of P[7] and P had also produced the “What’s App” messages from the tenant of the 405 Property which indicated that the tenant had said all along they had paid the rents on time and asking whether P had received the same[8].
76. Having considered the above, there was no sufficient evidence that P had deliberately failed to disclose that the rents had been paid into the Joint Account or had been collected by her. Although there had been withdrawals from the Joint Account, there was no sufficient evidence of D’s allegation at this stage, that P had been siphoning off the assets of the Estate for her personal use. The fact is that P had not had an opportunity to respond to D’s allegations.
77. In fact, as mentioned earlier, at the 1st Hearing, P had proposed to set up a trust account, or that the rental income be deposited into a stakeholder’s account or an account to be opened in the joint names of all 3 siblings, to which D had refused to agree, and insisted on he himself setting up a trust account and further insisted that all the information about the tenancies be provided to him by P before the setting up of any trust account, thereby bringing suspicion on himself that he had intended solely to control and to deal with the Estate, which later led to the Court granting the Injunction. At the 1st Hearing, this Court had already indicated that neither party should deal with the Estate pending the Court’s determination as to their respective entitlement, and that a stakeholder’s account should be set up to collect the rents and to pay outgoings, and at the 3rd Hearing, D’s then Counsel had also mentioned this, and yet there seemed to have been no application taken out by D in this respect.
78. The Injunction was granted on 4 September 2020. There have been no accounts or inventory of the Estate provided by D so far and it is not clear whether there have been other assets of the Estate collected and/or brought in by D, or whether any administration steps have been carried out by D after he obtained the LA.
79. In any event, having considered all the above, I am of the view that there is no sufficient evidence of any material non disclosure on the part of P, nor has there been a change in circumstances after the Injunction which would warrant a discharge at this stage.
80. I am thus not prepared to discharge the Injunction.
Conclusion
81. In light of all said above, the effect of my order in relation to the Leave Summons is as follows:
(1) Paragraphs 1 and 2 of D’s Leave Summons are dismissed, with P’s costs to be paid by D, to be summarily assessed on party and party basis and paid within 21 days of summary assessment;
(2) As for paragraph 3 of D’s Leave Summons, D shall be granted relief from the sanction imposed in the Unless Order on condition that he complies with the O76 Order, by lodging the original/official LA into the Probate Registry and to file an affirmation of testamentary script on or before 4 pm on 16 April 2021. D is to pay P’s costs of the application for relief, to be summarily assessed on indemnity basis and paid within 21 days of summary assessment.
(3) P is to lodge statement/s of costs for summary assessment within 7 days and D to lodge his list/s of objections within 7 days thereafter.
82. In relation to the Discharge Summons, this summons shall be dismissed and D to pay P’s costs, to be summarily assessed on party and party basis and to be paid by D within 21 days of summary assessment. P is to lodge a statement of costs for summary assessment within 7 days and D to lodge his list of objections within 7 days thereafter.
| | ( Bebe Pui Ying Chu ) |
| | Judge of the Court of First Instance |
| | High Court |
Mr Ronald Pang, instructed by Fongs, for the Plaintiff
Mr Michael M H Leung, instructed by K B Chau & Co, for the Defendant
[1] See paras 70-75, B:66-67
[2] See para 26, B:60
[3] B:184
[4] [2013] SGCA 38
[5] Per Lam VP, at para 7
[6] at para 26, B:100
[7] Para 26, B:60
[8] B:173