Ng Im Fong Loretta v Cham Investment Ltd [2021] 3 HKLRD 327, [2021] HKCFI 1787

Robert Pang SC leading Jeff Yau appeared for the successful plaintiff in Ng Im Fong Loretta v Charm Investments Ltd [2021] 3 HKLRD 327, [2021] HKCFI 1787.

These were two sets of applications issued in three actions concerning the properties and estate of the deceased. P was the deceased’s widow (though the validity of the marriage was in dispute). Ds were respectively the deceased’s nephew (N), a Hong Kong company (C) and a firm of solicitors. The deceased died in 2014, leaving no issue. P obtained probate of a will executed in 2010 by the deceased. She brought an action to recover one share in C transferred from the deceased to N in 2011 on, inter alia, the following bases: (i) the mental incapacity of the deceased; (ii) the deceased did not execute the relevant transaction documents with consent, knowledge, understanding or approval; and (iii) no agreement was made for the share transfer and no consideration was paid to the deceased (the Share Action). P further sued the solicitors’ firm which had acted as conveyancing solicitors for the deceased in the transfer of a property in 2008 from the deceased to C. Shortly thereafter, P brought a further action against C seeking, inter alia, a declaration that the property was held on trust for the estate and an order for its transfer to herself (the Property Action). P brought all three actions in her capacity as executrix of the deceased’s estate. N commenced a probate action against P challenging the validity of the marriage between the deceased and P and the will of the deceased made in 2010 (the Probate Action). N filed a notice of appeal against the striking out of the plea that the marriage was void, but had yet to set down an appeal. C and N applied for a stay of all further proceedings in the Share Action and C applied for a stay of all further proceedings in the Property Action, pending the determination of the Probate Action (the Stay Applications). P applied for an order appointing herself to be the administratrix pendente lite of the estate for the purposes of carrying on each of the three actions (the APL Applications). The question turned on whether a personal representative had legal standing to continue an action brought in that capacity after the grant of representation had been lodged in the Probate Registry.

Held, dismissing the Stay Applications and adjourning the APL Applications sine die with liberty to restore, that:

Stay Applications

• • (1) The lodgment of a grant of representation in an action for revocation did not have the automatic effect of terminating or suspending the status of the personal representative. Further, a special rule applied to P which provides that an executrix, as opposed to an administratrix, is at common law entitled, even before grant of probate, to commence an action and maintain it until such time when she needs to prove title. Accordingly, there was no reason why the lodgment of the grant, even if it suspended its validity as contended, should deprive P, as executrix, of legal standing to prosecute the actions at least until such time when she needed to prove her title (Daniel v Abiola [2003] EWHC 1562 (Ch), Yeung Yuk Yin v Chiu Tat Si[2006] 2 HKC 142, Re Honeycool Refrigeration & Engineering Co Ltd [2009] 1 HKLRD 447, Nativivat v Nativivat [2013] 4 HKLRD 340 applied; Re Estateof Cheng Fong (HCAP 18/2003, [2004] HKEC 426), Jen Kit Josephine v Chan Sau Wai Shirley [2019] HKCFI 879 distinguished). (See paras.29 – 33.)
  • (2) The authorities did not support an inflexible rule that an action brought by an executrix who had obtained a grant of probate should forthwith be stayed pending a probate action that sought to revoke the grant. P had already obtained a grant. Unless and until the grant was revoked, she enjoyed all the powers of a personal representative and had every authority to commence and maintain the Share Action and Property Action. Even if the grant were to be revoked in the future, it would not have the effect of rendering those actions a nullity (Chao Yue Wah v Mo & Co (Hong Kong) Ltd (HCA 2326/2001, 5 August 2003), Lee Chaio Shing v Luk Hoi Tong Co Ltd (CACV 376/2003, [2004] HKEC 1697), Yeung Yuk Yin v Chiu Tat Si [2006] 2 HKC 142, Re Honeycool Refrigeration & Engineering Co Ltd [2009] 1 HKLRD 447 considered; Webb v Adkins(1854) 14 CB 401, Tarn v Commercial Banking Co of Sydney (1884) 12 QBD 294, Nativivat v Nativivat [2013] 4 HKLRD 340 distinguished). (See paras.35 – 38.)
  • (3) The question of temporary stay of proceedings in a case such as the present was a matter of discretion and case management, to be approached on the balance of convenience and fairness between the parties and with a view to ensuring the court’s procedures were used in a logical, fair and cost-efficient manner (Lee Chaio Shing v Luk Hoi Tong Co Ltd (CACV 376/2003, [2004] HKEC 1697), Re Chime Corp Ltd (HCMP 4146/2001, [2005] HKEC 471), Lok Man Sin v Lam Chi Wing [2019] HKCFI 56, Re Hsin Chong Construction Co Ltd [2021] HKCFI 1295 applied). (See para.39)
  • (4) As a matter of the court’s discretion, an action to recover assets on behalf of a deceased person’s estate may be stayed pending a probate action where the recovery action may become academic, for instance, because the person from whom assets were sought to be recovered may well be found to be the sole beneficiary of the estate. In such cases, the resolution of the probate action in favour of that person would be wholly dispositive of the dispute between the parties. However, here there were various different possible outcomes based on the contentions advanced. It had not been shown that the determination of the Probate Action in N’s favour would be wholly dispositive of other actions which raised separate and different factual issues. In addition, N’s failure to set down the appeal and to progress the Probate Action in the light of the launching of the Stay Applications smacked of delaying tactics. Given P’s old age and that she would be a significant witness for the estate in the Share Action and the Property Action, it would be denial of justice if the resolution of the dispute was to be further delayed (Lee Chaio Shing v Luk Hoi Tong Co Ltd (CACV 376/2003, [2004] HKEC 1697) applied; Re Chime Corp Ltd(HCMP 4146/2001, [2005] HKEC 471), Chan Shui Hing v Chan Kin Keung (HCA 2658/2015, [2017] HKEC 2422), Lok Man Sin v Lam Chi Wing [2019] HKCFI 56 distinguished). (See paras.41 – 42, 44, 46 – 47.

• (5) N and C had not made out grounds for a stay of all further proceedings in the Share Action and the Property Action. (See para.49.)

APL Applications

• (6) Orders appointing P as administratrix pendente lite would only be necessary if the Court had concluded that P had no standing to maintain the actions or that the estate was not represented in the actions so as to be bound but considered that the actions should be continued by a person representing the estate. However, since P was an executrix who had obtained a grant of probate, such orders were not necessary even though the grant was under attack in the Probate Action (Re Estate of Luk Kim Ying [2008] 5 HKLRD 743, Re Yien Chi Ren [2009] 5 HKLRD 413 applied). (See paras.52 – 53.)

[The above is excerpted from the headnote to the report in HKLRD.]