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Kwan v Kwan [2018] FJHC 110; HPP027.2016 (23 February 2018)

IN THE HIGH COURT OF FIJI
AT SUVA
PROBATE JURIDISDICTION


Civil Action No.: 27 of 2016


IN THE MATTER of THE ESTATE OF KWAN CHEW KUVAN aka CHEW KUVAN KWAN late of 88 Milverton Road, Raiwaqa, Fiji, Businessman, Deceased, Testate.


IN THE MATTER of AN APPLICATION FOR APPOINTMENT OF NEWADMINISTRATOR.



BETWEEN : BYRON KWAN of 88 Milverton Road, Raiwaqa, Suva, Beneficiary.


PLAINTIFF


A N D : NELSON KWAN of 88 Milverton Road, Raiwaqa, Suva, Beneficiary.


1ST DEFENDANT


A N D : KAREN KWAN of 88 Milverton Road, Raiwaqa, Suva Beneficiary


2ND DEFENDANT


Appearance : In Person for Plaintiff
Ms. M. Rakai for the 1st Defendant
Ms. S. Nayacalevu for the 2nd Defendant
Date of Hearing : 28th June, 2017
Date of Judgment : 23rd February, 2018


JUDGMENT


INTRODUCTION


  1. This is Originating Summons was filed by the Plaintiff seeking an order to appoint him as administrator of the estate of Kwan Chew Kuvan, his late father. There is a last will of his late father and accordingly there were two executors who were removed by the court. One of the said executor, and also a beneficiary of the said will is first Defendant. He had by Motion filed on 22nd December, 2016, had sought certain orders as to the administration of a property namely a canteen and refreshment bar , which was operated by the deceased. The Plaintiff denies that said property is part of estate, but even VAT for said business was paid by the estate and 1st Defendant had provided the Bank account maintained for the said business by their late father.

FACTS

  1. Late Kwan Chew Kuvan in his last will stated inter alia as follows

‘I direct my trustee to maintain my invalid wife Jei Oi Larn and my invalid daughter namely Karen Kwan to the standard that they have become accustomed to during my lifetime.


I give devise and bequeath all my real and personal property of whatsoever nature and whatsoever situate to and unto my wife Je Oi Larn and my children namely Byron Kwan, Nelson Kwan and Karen Kwan in equal shares and share alike for their enjoyment and benefit absolutely.’


  1. The wife of late Je Oi Larn is dead and she had died intestate and her shares had devolved to the children, and the children are the Plaintiff and the Defendants in this action.
  2. Both Defendants object to the Plaintiff being appointed as administrator.
  3. There is a letter attached to the affidavit in opposition of the 2nd Defendant which indicates that she is a fit and proper mental status to defend an action, though her ability to engage in finance is yet to be ascertained. This final assessment as to her ability to engage in financial affairs was not produced till the conclusion of this matter.
  4. 1st Defendant had filed a Motion on 22nd December seeking following orders

“a. So the request for accounts of the said property needed to be submitted.


  1. An order that the Plaintiff do forthwith render to the Defendants a full account of “Kwan’s Milk Bar” or ‘Kwan’s Refreshment Bar’ which is being managed by Great Development Limited and part of the Estate of Kwan Chew Kuvan aka Estate of Kwan since the date of his death to-date;
  1. An order that the Plaintiff do forthwith render to the Defendants all bank accounts and information of ‘Kwan’s Milk Bar’ or ‘Kwan’s Refreshment Bar’ which is Great Development Limited and part of the Estate of Kwan Chew since the date of his death to-date from any commercial banks;
  1. An order that the Plaintiff pay the First Defendant his one-third share of income derived from ‘Kwan’s Milk Bar’ or ‘Kwan’s Refreshment Bar’ which is Great Development Limited and part of the Estate of Kwan Chew Kuvan aka Estate of Kwan since the date of his death to-date;
  2. An order that the Plaintiff pay the First Defendant his one-third share of the value of ‘Kwan’s Milk Bar’ or ‘Kwan’s Refreshment Bar’ through Great Development Limited or my one third share of ‘Kwan’s Milk Bar’ or ‘Kwan’s Refreshment Bar’ through Great Development Limited in the event of the subsequent dissolution of the Estate and sale of the business;
  3. An order that the Plaintiff and his wife give the First Defendant his one-third share of the family heirlooms and jewellries given to the Plaintiff and his wife for safe- keeping.
  4. An order that the Plaintiff give the First Defendant his one-third share from the $19,100.99 (Nineteen Thousand, One Hundred and Ninety Cents) monies that their late father left in Kwan’s Milk Bar Westpac Account No.: 980000525 as at 6th June 2000;
  5. An order the Plaintiff give the First Defendant his one-third share of the monies the Estate of Kwan Chew Kuvan paid on behalf of Great Development Limited for Estate of Kwan Chew Kuvan paid on behalf of Great Development Limited for Estate of Kwan Chew Kuvan aka Estate of Kwan to Fiji Revenue and Customs Authority in the sum of $13,922.18 (Thirteen Thousand, Nine Hundred and Twenty Dollars and Eighteen Cents) on 27the March 2009;
  6. An Order that the Plaintiff’s Originating Summons filed 6th July 2016 be deferred until this application is dealt with by the High Court.
  7. An Order for a perpetual injunction restraining the Plaintiff, his wife, his servants, agents and/or employees from dealing or attempting to deal in any way whatsoever with ‘Kwan’s Milk Bar’ or ‘Kwan’s Refreshment Bar’ which is Great Development Limited until Orders (1) – (13) are complied with and the Defendants are paid.
  8. Such further or other reliefs as .......”
  1. The Plaintiff opposed to the said motion and had filed affidavit in opposition for it on 25th January, 2017 and a reply to that was filed on 14th February, 2017.
  2. The hearing of the Originating Summons and the Motion of the 1st Defendant filed on 22nd December, 2016 was conducted simultaneously.
  3. There was a Motion filed on behalf of 2nd Defendant and it was dealt earlier in this proceedings and some orders were made as interim measure.

ANALYSIS

  1. All three children of late Kwan Chew Kuvan, desire to administer the estate and none wants to give it to a one sibling.
  2. From the affidavit in opposition filed by the 2nd Defendant to originating summons, she is not fit to administer the property as her mental condition as to the ability to conduct financial matters is not before me. The mental condition as per the report of the Consultant Psychiatrist from the St Giles Hospital indicated that though she could participate in matter in court, her condition as to the management of finance a further assessment was needed. (See annexed A to the affidavit in response to the Originating Summons filed on 3.11.2016). This further assessment was not available to me in this matter. From the available evidence she cannot be appointed as administrator.
  3. From the evidence produced estate of deceased did not maintain accounts of the estate for a long time an interim order was sought by way of an injunction and following orders were made

‘(i). The rental proceeds from the Property be paid to the trust Account for the Shekinah Law and all necessary endeavours should be taken to collect reasonable rents from the said property.


(ii) All the rental proceeds collected in (i) above should be distributed equally among the owners of the property namely the Plaintiff and two Defendants (after deduction of all statutory dues from the property and essential repairs to the property)(2nd Defendant’s share may be released upon proof of her mental ability to manage finances).


(iii) The Plaintiff and 1st Defendant are restrained from collecting rental income till final determination of this matter.

......’


  1. The 1st Defendant is one of the former executors , who was removed for the reasons given in the judgment of HPP 14 of 2014 delivered on 25.5.2015, from the estate of late Kwan Chew Kuvan by the court. So, he is not suitable to be appointed as administrator.
  2. The 1st Defendant in the affidavit in opposition had indicated that there is a property that is managed and or operated by the Plaintiff, and its profits were never distributed to the beneficiaries.
  3. This property is a canteen and refreshment bar at Suva Bus Stand, which was not accounted for more than a decade by the Plaintiff.
  4. According to 1st Defendant, the two main income earning assets were the residential flat at No. 88, Milverton Road, Suva and the Canteen and Refreshment Bar, at the main Bus Stand in Suva.
  5. The Plaintiff denies that the said property is part of deceased estate, but had failed to state how he acquired to operate it and when he acquired it and why he allowed some statutory dues of the said property be paid by the estate of the deceased for years 2006 and 2007.
  6. In the paragraph 6 of the affidavit in support filed on 22nd December, 2016 1st Defendant sates as follows

‘That the parties were advised by the Estate’s Accountant, Anthony Ho’s to incorporate two entities to manage the two main assets of the Estate , namely, Great Development Limited which was to manage “Kwan’s Refreshment Bar” at Rodwell Road and Chew Kwan Kuvan Limited whih was to manage 88, Milverton Road under Chew Kuvan Limited since 2002. ......’


  1. The abovementioned affidavit of the 1st Defendant annexed the incorporation of Great Development Limited and the main objective of the said entity is ‘to carry on the business of keepers of milk bar, fast food takeaway, kiosk, restaurant, café tavern, refreshment bar, .......’
  2. It cannot be a coincidence that both Great Development Limited and the Chew Kwan Limited were incorporated on the same day and the Directors of the respective companies are the parties to this action. Chew Kwan Limited operated the residential flat at No. 88, Milverton Road, Suva.
  3. From the evidence presented the main properties of the estate of the deceased was a flat and a canteen and the Plaintiff and 1st Defendant had created two legal entities for management of these properties separately. They had continued to manage the two properties separately without accounting them for the estate and also forgetting that there is a sibling that needed maintenance from the said properties.
  4. She had to come to this court and make an application in this proceedings in order to secure her share, whereas the Plaintiff and 1st Defendant managed and operated two income earning properties of the deceased without even accounting for them for a over decade.
  5. Both the Plaintiff and 1st Defendant had not submitted accounts for the respective properties, and though the Plaintiff was not an administrator or executor he is obliged to provide accounts for the operation of the said canteen as it was part of the estate from the evidence before me.
  6. Creation of legal entity, Great Development Ltd, to operate canteen, does not change its character being part of the estate of the deceased.
  7. So, the bare statement that the said canteen and refreshment bar does not belong to the estate cannot be accepted as there were even payment of VAT for Great Developments Limited by the Estate of late Kwan Chew Kuvan and there is no reason to pay tax for the said entity by the estate unless it was a part of the estate of late Kwan Chew Kuvan.
  8. In the affidavit in reply filed by the Plaintiff regarding the motion filed on 22nd December, 2016, there is no explanation regarding these payments by the estate. These payments were paid long before the litigations and or dispute as to the estate properties. At that time parties had formed separate legal entities and continued operation of said properties, since 2005.
  9. The payment of the VAT was for years 2006 and 2007 and from that it can conclude that even after creation of two legal entities to manage (Great Development Ltd ) the canteen and refreshment bar, the estate of the deceased continued even to pay VAT for it. The Plaintiff had failed to explain why such payments were allowed to be paid by the estate for more than two years if the property was not a part of estate of the deceased.
  10. The non-submission of any accounts to said property of canteen by Plaintiff indicate that he was neglecting his obligations even as a beneficiary and managing party and this had resulted the estate of the deceased not receiving the income from the said property.
  11. In my mind there is proof, that the canteen and refreshment bar maintained by Great Development Limited is part of the estate. The Plaintiff is not only neglected to submit its accounts to the estate but also now denying that said entity is part of the estate. Since there are sufficient evidence to the effect that it was considered as part of the estate by both parties by allowing to pay even VAT for two years after incorporation of management company in 2005 the income of the said property should be considered as part of the estate.
  12. The 1st Defendant had also stated that there were money held in Westpac bank account No 980000525 for the said canteen (Milk bar) maintained by the deceased. This paragraph is neither denied nor admitted by the Plaintiff.
  13. Since there was an account number given, the Plaintiff could have either admitted or denied that fact, as the 1st Defendant alleged a substantial amount of money in credit to the said business entity at the time of the death of their late father, from the said operation of the canteen and refreshment bar. This is an evidence that is in special knowledge with the person who is maintaining said canteen and refreshment bar, and at least the existence of account in the bank must be admitted or denied.
  14. The ownership of the property may be with the Suva City Council, that does not preclude the income or profits from operation of that property being accrued to the estate of deceased. The 1st Defendant’s evidence that it was operated by the deceased, and the separation of the two properties were done by Plaintiff and 1st Defendant with the creation of two legal entities, is proved. So the profits from them are part of the estate.
  15. The behaviour of the Plaintiff by not accounting for the said property as well as now denying the canteen and refreshment bar as part of the estate would make him unfit for the appointment as administrator of the estate.
  16. An order is made against the Plaintiff to submit the accounts for the said canteen and refreshment bar maintained by Great Development Limited at Bus Stand this also includes the accounts of Westpac Account No 980000525 maintained and or operated by the deceased in his name and or in the name of canteen and milk bar under the name ‘Kwan’s Refreshment Bar’.
  17. There is no reason as to the Plaintiff to continue operating the said canteen and bar in a prime location if it was not making any profits. So any costs associated with preparation of audited accounts for the said estate property should be entirely borne by the Plaintiff, considering that the Plaintiff had failed to disclose the accounts for the said canteen
  18. The 1st Defendant state that since the shares in the residential flat situated at No. 88, Milverton Road had been transferred to the beneficiaries it is no longer a property of the estate.
  19. The last will specifically state that the late wife and 2nd Defendant needs to be maintained from the income of the estate. In such a situation irrespective of transfer of respective shares to the three beneficiaries, of the residential flat at No. 88, Milverton Road, Suva, the paramount consideration is the maintenance of 2nd Defendant. So, maintenance of the said property needs administration as her maintenance is paramount.
  20. The reason for such a direction by the testator is clear as her mental status was not considered as a normal. In such a situation even if the property is transferred to the respective beneficiaries, the paramount responsibility of the trustee of the estate is the maintenance of the 2nd Defendant, in the same manner as when her late father would have been alive. So in my judgment, the maintenance of the said residential flat at No. 88, Milverton Road as well as the canteen and refreshment bar are responsibility of the administrator in terms of the will, irrespective of transfer of shares or ownership in the said property to the beneficiaries. (See Marley v Rawlings and another [2014] 1 All ER 807 and Loring and Another v The Woodland Trusts and others [2015] 2 All ER 32).
  21. The intension of the testator is clear from the language of the last will and an administrator needs to be appointed considering that the property would be wasted if it they are not properly maintained. At the moment residential property at No. 88, Milverton Road is partly administered through an interim order by a law firm as an interim measure.
  22. In the absence of suitable person from the beneficiaries of the estate I appoint the Public Trustee as the administrator with the will attached. Parties are at liberty to make application regarding this order. (See section 35 of Succession Probate & Administration Act 1970).
  23. Till the Public Trustee takes over the administration of the property the interim order made in this case is extended.

FINAL ORDERS

  1. Originating Summons filled by the Plaintiff seeking him to be appointed as administrator of the estate of late Kwan Chew Kuvan is struck off.
  2. The Public Trustee is appointed as the administrator of the estate with will attached. The parties are at liberty to apply for suitable administrator in place of Public Trustee.
  1. The Plaintiff is directed to submit the accounts of the canteen and refreshment bar including the account maintained by the deceased at Westpac from 2006 to current year. These accounts needs to be audited by a recognized accounting firm in Fiji according the accounting standards applicable in Fiji. The cost of such an exercise is entirely borne by the Plaintiff.
  1. The interim order for administration of residential lot at No. 88, Milverton Road to continue till Public Trustee takes over the administration of the estate.
  2. Parties to bear their own costs for this action.

Dated at Suva this 23rd day of February, 2018


................................................

Justice Deepthi Amaratunga

High Court, Suva


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