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Adrienne Marsh Lefkowitz (Femme Sole) v The Bank Of New York And Others

Judgment Cited authorities 7 Cited in Precedent Map Related
Vincent
Judgment Date20 December 1995
Subject MatterMiscellaneous Proceedings
Judgement NumberHCMP1638/1992
CourtHigh Court (Hong Kong)
HCMP001638/1992 ADRIENNE MARSH LEFKOWITZ (FEMME SOLE) v. THE BANK OF NEW YORK AND OTHERS

HCMP001638/1992

1992, No.MP1638

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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IN THE ESTATE OF NICHOLAS V. MARSH DECEASED

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IN THE MATTER of an application pursuant to Section 36 of the Probate and Administration Ordinance Cap.10 and rule 51 a of the Non-Contentious Probate Rules

BETWEEN
ADRIENNE MARSH LEFKOWITZ (femme sole) Plaintiff
and
THE BANK OF NEW YORK 1st Defendant
GORDON DAVID OLDAHAM 2nd Defendant
DIANNE BRENNAN 3rd Defendant

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Coram: Hon Mr Justice Cheung in Court

Dates of hearing: 2nd, 3rd, 6th, 7th & 8th November 1995

Date of handing down Judgment: 20th December 1995

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JUDGMENT

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Nature of Application

1. In this application, the Plaintiff seeks an order under s.36 of the Probate and Administration Ordinance ("the Ordinance") appointing Matheson Trust Company (Hong Kong) Limited ("Matheson") as the administrator of the estate of Mr Nicholas Marsh ("Mr Marsh") in place of the Defendants.

Background

2. The Plaintiff is the daughter of Mr Marsh and a beneficiary under his will. On 15th March 1998, Mr Marsh died domicile in New York. The Plaintiff was also named as the executrix of Mr Marsh's will and was granted preliminary letters testamentary in New York on 25th April 1988. Her appointment was revoked by the New York Surrogate Court on 19th April 1990. On 26th February 1992, the 1st Defendant ("BNY") obtained probate of the will of Mr Marsh and was granted letters testamentary and trusteeship.

3. The estate of Mr Marsh consists of assets in the United States and Hong Kong. In respect of his estate in Hong Kong, the Plaintiff on 8th October 1990 entered a caveat in the Probate Registry. On 12th April 1991, letters of administration ad colligenda bona was granted to Mr Gordon Oldham ("Mr Oldham") and Ms Dianne Brennan ("Ms Brennan"), as attorneys for BNY. The Plaintiff then applied to discharge the letters of administration ad colligenda bona. On 6th May 1991, Nazareth, J. (as he then was) refused the Plaintiff's application on BNY's undertaking to apply within 7 days for administration pendente lite. On 13th May 1991, BNY applied to be appointed administrators pendente lite. On 14th May 1991, Probate Action No. 5 of 1991 was instituted by BNY seeking probate of the will of Mr Marsh. On 15th May 1991, BNY sought the appointment of Mr Oldham and Ms Brennan as the administrators pendente lite. The application was opposed by the Plaintiff. On 12th May 1992, Godfrey, J. (as he then was) appointed Mr Oldham and Ms Brennan as administrator pendente lite and ordered the BNY's action for probate be heard as short cause list unless the Plaintiff within 28 days apply under s.36 of the Ordinance for appointment of alternative administrator and thereafter proceed with due diligence and expedition. On 15th September 1992, letters of administration pendente lite was issued to Mr Oldham and Ms Brennan.

4. The present proceedings were issued on 8th June 1992. There was an unsuccessful attempt by the Plaintiff to obtain leave to cross-examine in May 1994. In January 1995 the hearing of the Originating Summons was again aborted because of the Plaintiff's application to put in further evidence which was rejected by me. Shortly before the present hearing took place, the Plaintiff applied for an adjournment of the hearing. The application was rejected.

Basis of removal

5. The issue before me is whether the Defendants are fit to carry out properly the administration of the estate and to serve in the interest of all the beneficiaries. The evidence filed in this case is voluminous. Mr Michael Thomas, Q. C. Counsel for the Defendants said the Plaintiff has filed 2,437 pages of affidavits and exhibits. Mr Shaw, Counsel for the Plaintiff, informed the court that the grounds for removing the administrators are in the main set out in the two affidavits of the Plaintiff filed on 24th June 1992 and 6th April 1994 respectively. Mr Shaw submitted that BNY and its attorneys are unfit to be administrators for a number of reasons:

1. Conflict of interest and duty:

(i) Ms Brennan now works for Hutchison Whampoa which is a company controlled by Mr Li Ka Shing ("Mr Li") who held substantial investment for Mr Marsh.
(ii) BNY has business dealings with Peregrine Investment Holdings Limited ("Peregrine") which is controlled by Mr Li.
(iii) BNY's interest in a bank in Hong Kong also put it in a position of conflict.
2. Improvidence/failure of duty in its conduct, in gathering in and dealing with assets of the estate":
(i) BNY took control of a family company in New York and sold it at low price.
(ii) BNY failed to make sufficient inquiries into assets held by Mr Li for Mr Marsh.
(iii) BNY has failed to marshal properly the assets held by Mr Li.
3. Hostility between Plaintiff and BNY.
4. BNY has made misrepresentation to Hong Kong courts when it applied to transfer the assets gathered in Hong Kong to New York.
5. Failure to provide the Plaintiff with information and documents of the estate.

Grounds of opposition

6. The Plaintiff's application is opposed by the Defendants on the following grounds:

1. BNY was appointed by the court in New York which is the court of domicile of Mr Marsh. The Hong Kong court must give effect to this appointment.
2. The Plaintiff's complaints of misconducts of BNY have been litigated in New York. The matter should not be reopened here again. In any event New York is the more appropriate forum to deal with these issues.
3. The allegations do not support a case for removal of the Defendants.

Jurisdiction of Hong Kong Court

7. The arguments of Mr Thomas can be summarised as follows:

(1) Where a person died domicile in a foreign country, the Hong Kong court will in general make a grant to his personal representatives under the law of such foreign country. (Rule 124 of Dicey and Morris on Conflict of Laws, 12th ed., p. 1005 para. 1041, Hasbulary's Laws of England Vol. 17). The only connection with Hong Kong is the presence of the assets here. The Hong Kong court must give recognition to the appointment of the personal representative.
Rule 29 of the Non-contentious Probate Rules. Cap. 10 is a recognition of this principle. It is provided that where the deceased died domicile outside Hong Kong, the Registrar may order that a grant be issued-
(a) to the person entrusted with the administration of the estate by the court having jurisdiction at the place where the deceased died domicile;
(b) to the person entitled to administer the estate by the law of the place where the deceased died domicile;
(c) if there is no such person as is mentioned in paragraphs (a) and (b) of this rule or if in the opinion of the Registrar, the circumstances so require to such person as the Registrar may direct.
(2) In making the grant to the foreign personal representative, the Hong Kong court is not concerned with the grounds upon which he was appointed. (page 1006 of Dicey and Morris) In The Goods of Earl [1867] LR 1 PD 450, Sir J. P. Wilde at p.453 stated:
"I think the court ought to act upon that section, and to make a grant in all such cases as the present to the person who has been clothed by the court of the country of domicile with the power and duty of administering the estate, no matter who he is or on what ground he has been clothed with that power."
Similar views are expressed In the Goods of Hill [1870] LR 2 PD 89. In the Goods of Briesemann [1894] p.260, In the Goods of Meatyard [1903] p.125, and In the Estate of Esther Allen Humphries [1934] p.78.
(3) A grant under such circumstances may be made either to the foreign representative himself, or to an attorney whom he has authorised to apply for a grant on his behalf. In other words, the Hong Kong administration is said to be "ancillary" as opposed to the "principal" administration in the country of domicile. (page 1006 Dicey and Morris).
(4) There are few cases where the probate court would refuse to follow the foreign grant, an example of such an exceptional situation is In Re Duchess of Orleans' Goods [1859] 1 Sw. and Tr. 253 in which a grant to a minor was refused. In the Goods of Gustav Kaufman [1952] P325, the court departed from the general rule on the special circumstances of that case where the deceased died domicile abroad in a concentration camp and her daughter, the only person entitled by the law of domicile to his estate, died without taking administration upon herself.
(5) There is no reason to equate the court's discretion not to follow the foreign grant with its exercise of original jurisdiction as the domiciliary court to revoke a grant or to pass over an executor where it must itself decide upon the fitness of a representative.
(6) Objections to the fitness of the executor appointed by the foreign court i.e. New York court ought not be entertained by the Hong Kong court for several reasons-
(i) it would be contrary to the rule that the Hong Kong court would follow the decision of the foreign court and recognise its choice of representative and not enquire into the appointment;
(ii) it would be contrary to comity for the Hong Kong court to entertain objections to the fitness of the foreign representative once he has been clothed with authority by the domiciliary court;
(iii) it would be vexatious and abuse of process to litigate in Hong Kong rather than in the foreign court
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