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HCMP 2027/2011
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
MISCELLANEOUS PROCEEDINGS NO 2027 OF 2011
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IN THE MATTER of Order 17 of the Rules of the High Court, Cap.4A
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and
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IN THE MATTER of an application by Nanyang Commercial Bank, Limited for interpleader relief against the claims between the 1st and 2nd Defendants herein
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BETWEEN
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NANYANG COMMERCIAL BANK LIMITED |
Plaintiff |
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And |
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THE PERSONAL REPRESENTATIVE OF VANNEE NATIVIVAT, Deceased |
1st Defendant |
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VITOON NATIVIVAT |
2nd Defendant |
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| Before: |
Hon To J in Chambers |
| Dates of Hearing: |
19 December 2012 |
| Date of Decision: |
27 March 2013 |
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D E C I S I O N
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Introduction
1. This is the hearing of an appeal by the 2nd Defendant against the decision of Master J Wong given on 14 June 2012 granting the Plaintiff (the “Bank”) interpleader relief with costs against the 2nd Defendant; and a cross appeal by the 1st Defendant, the personal representative of the mother of the 2nd Defendant (the “Mother”), against the master’s costs order that there be no order as to costs as between the 1st and 2nd Defendants.
Background
2. The Mother, a Thai national, and her son, ie the 2nd Defendant, had five joint accounts (collectively, “the Accounts”) with the Bank. Under clause 7.1(g) of the Conditions of Service of the Accounts (the “Conditions”), upon the death of either one of them, the balance in the Accounts would belong to the survivor. In a letter dated 19 October 2010, the Mother informed the Bank that the 2nd Defendant had taken away the account book and requested all the Accounts be frozen as she was incapacitated. The 2nd Defendant also wrote to the Bank twice the next month claiming there was a misunderstanding with the Mother and asked the Bank to freeze the Accounts. Accordingly, the Bank suspended the operation of the Accounts.
3. On 31 December 2010, the Mother went to the Yaumatei branch of the Bank in person claiming that the monies in the Accounts (“the Monies”) belonged to her solely and that the 2nd Defendant was named as a joint holder solely for convenience purpose. She told the Bank’s staff that she wanted to withdraw the Monies. Her request was refused because the 2nd Defendant had also written to freeze the Accounts.
4. About 6 months later, Messrs W K To & Co (“WKT”) informed the Bank that the Mother had passed away in Thailand leaving a will. They claimed again that the Monies belonged to the Mother and should not be released to the 2nd Defendant by survivorship. On 23 August 2011, WKT confirmed that they had instructions to act for the executors of the will or the personal representatives of the deceased Mother.
5. On the same day, Messrs Alvan Liu & Partners (“ALP”) acting on the instruction of the 2nd Defendant wrote to the Bank claiming that upon the death of the Mother, the 2nd Defendant in his capacity as the sole remaining beneficial owner of the Accounts was entitled to operate the Accounts.
6. In light of the development, the Bank proposed an interpleader by consent so that the Monies could be paid into court pending final determination of the entitlement of the Monies as between the 1st and 2nd Defendants. WKT agreed but ALP did not. This led to the Bank taking out an originating summons seeking interpleader relief.
7. On 14 June 2012, Master J Wong granted the Bank’s application but refused to make a summary determination of the entitlement of the Monies as between the 1st and 2nd Defendants. He ordered, inter alia, that the Monies be paid into court pending final determination; that the 2nd Defendant to pay the Bank’s costs of the application; and that there be no order as to costs as between the 1st and 2nd Defendants. He gave the following direction for the further conduct of the application:
“As to how the entitlement of the Monies between the 1st and 2nd Defendant is to be resolved, they should agree with further directions and submit the same for the master’s approval within 21 days of the order, failing which, the matter should be resumed before the master for 1 hour.”
8. The Mother left two wills. Under her first will dated 24 July 2004, she appointed the 2nd Defendant as one of the executors of her will. By her second will dated 24 December 2010, she disinherited the 2nd Defendant and appointed his three siblings, ie the 1st Defendant, as executors. The 2nd Defendant challenged the validity of the second will on the grounds that it was a forgery and made while the Mother was not of totally sound mind. However, for the purpose of the present appeal, the 2nd Defendant is not pursuing the question whether the 1st Defendant has authority to represent the estate of the Mother.
Some legal principles applicable to interpleader proceeding
9. Interpleader proceeding is a proceeding by which a person, from whom two or more persons claim the same property or debt, but who does not himself claim the property or dispute the debt, wishes to protect himself from legal proceedings by calling upon the two claimants to interplead, that is to say, claim against one another, so that the title to the property or debt may be decided by the court: Order 17 rule 1 and Hong Kong Civil Procedure 2012 paragraph 17/0/2. The prerequisite to the right to interplead is that the intended interpleader: (a) has no interest in the property the subject matter of the dispute; (b) did not collude with any of those claiming the subject property; and (c) is willing to dispose of the property as the court might direct.
10. In DLA Piper v China Property [2010] 1 HKLRD 903, the Court of Appeal endorsed the following principles applicable to an interpleader proceeding as correct:
(1) where two or more persons claim the same thing or fund, the holder of the thing or fund does not claim any interest in the property, and not knowing to which of the claimants he ought to deliver the property, and he is sued or fears that he may be sued by some of them, he may apply for interpleader relief against the claimants;
(2) the relief is discretionary and it will not be granted unless there appears to be some real foundation that the applicant may be sued;
(3) the applicant does not in any manner collude with any claimant, or has not voluntarily put himself into the situation from which he calls on the court to extricate him;
(4) he is ready to bring into court, or to pay to dispose of the subject matter of the action in such manner as the court may direct;
(5) the test for a real foundation of being sued is whether a prima facie case exists (see Chan King Sheen v KC Tsang & Co [2002] 3 HKC 209 (CA) at 221I); and
(6) the test is whether each of the rival claimants has a prima facie case against the interpleading party, but not whether the adverse claimant has a claim against each other (see de La Rue v Henru, Peron & Stockwell Ltd [1936] KB 164 per Greene LJ at 170‑173, Tsun Fat Finance Co Ltd v Commissioner for Police [2002] 3 HKC 232 at 246).
The first four of these “principles” are prerequisites. The remaining two are the test and the standard of the test to be applied in ascertaining whether the interpleading party has a real foundation that he will be sued by the claimants.
11. On hearing the application, the court has wide discretion, including dismissing the application on grounds that the prerequisites in rule 1 or the formal requirements in rule 3 are not satisfied; making a summary determination of the claim; and giving direction as to the further conduct of the proceedings: rule 5 and Hong Kong Civil Procedure 2012 paragraphs 17/5/2 to 17/5/9. Summary determination is the course most commonly taken in straightforward cases, particularly where expedition is desirable. But if the subject matter is of considerable value and difficult questions of law may arise, summary determination is not appropriate, even if the parties so consent: Fredericks and Pelhams Timber Buidings v Wilkins, Read (Claimant) [1971] 1 WLR 1197; [1971] 3 All ER 545 (CA).
12. A summary determination, being summary in nature, is only appropriate for clear cases to which summary judgment under Order 14 is applicable. The legal principles applicable to summary judgment under that order are also applicable to a summary determination under Order 17. Summary determination is therefore appropriate for cases in which there is no material factual dispute and if there is a legal issue, then no more than a crisp legal question as well decided summarily as otherwise. The court must not embark on a mini trial on affidavits.
The 1st Defendant’s case
13. The Mother’s case is that the Monies belonged to her solely and came from rental income from a property in Wing Lok Street (the “Property”) which belonged to her until she was defrauded by the 2nd Defendant into transferring the Property to him by way of a purported deed of gift dated 26 April 2004. The Property is the suit property in another set of proceedings, namely HCA 1376/2011 commenced by the 1st Defendant against the 2nd Defendant. Upon learning that the 2nd Defendant intended to fly to Hong Kong to withdraw the Monies, the Mother caused a letter dated 19 October 2010 to be sent to the Bank instructing it to freeze the Accounts. That letter was received by the Bank on 29 October 2010. On 28 and 29 October 2010, the Mother also spoke with Agnes Ng of the Bank on the telephone expressing her clear intention to freeze the Accounts to prevent the 2nd Defendant from withdrawing the Monies. On 24 December 2010, the Mother made her second will disinheriting the 2nd Defendant from her...
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