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Probate & Estate – Executor’s Rights to Commence Legal Action before Grant
1 June 2014

Hong Kong has a large multi-national community and as a result, there is a huge number of international estates involving beneficiaries overseas or deceased domiciled abroad. Litigation involving foreign executors or beneficiaries are also very common. Recently, the Court of Appeal in the case of Nativivat v Nativivat [2013] 4 HKLRD 340 considered an interesting question of whether an executor under a foreign will has the right to commence legal proceedings prior to obtaining grant of probate in Hong Kong.

Background

In that case, the plaintiffs and the defendant were the children of a foreign national (“Deceased”) who died domiciled in Thailand. The plaintiffs were the purported executors of a Thai language will made by the Deceased in Thailand. In the Thai probate proceedings, the Thai first instance court held that the Deceased’s will was valid and the defendant lodged an appeal against that decision. As a result of the appeal which is still pending, the plaintiffs have not yet obtained any grant of probate in either Thailand or Hong Kong.

The plaintiffs brought proceedings in Hong Kong in their capacity as executors of the Deceased, seeking declarations that the deed of gift under which the Deceased had assigned her interest in a Hong Kong property to the defendant was void and/or of no legal effect and the property was therefore held on trust for the Deceased and her estate. The plaintiffs averred that the deed was procured by the defendant’s fraudulent misrepresentation. The defendant applied by way of Order 14A relief to strike out the plaintiffs’ claim. The lower court judge refused to determine the question of whether the plaintiffs have any locus standi to commence the present legal action but granted a stay of the action pending a grant to be obtained in Hong Kong by the plaintiffs and a reasonable time had elapsed after the grant had been submitted to the defendant for inspection. The defendant appealed against the lower court’s decision.

Rights of Executors under a Will

It was not disputed by the parties that in terms of administration of estate, in so far as Hong Kong landed property belonging to an estate or claims in respect of the same is concerned, the title of the executor must be proved by a grant issued by the Probate Registry and the administration of such property would be governed by Hong Kong law.

The issue in this case at the Court of Appeal is whether the plaintiffs can advance their claims in this action in their capacity as executors appointed under the Thai will. The appellate court judges affirm the principle that an executor derives title and authority from the will of the testator and not from any grant of probate and this principle is based on the well settled principles of English law (see Comyns’ Digest, “Administrative” B 9 and 10). As such, a person may commence legal proceedings in his position as an executor before the grant of probate and continue with it up to the time when the production of the probate becomes necessary. An administrator (of a deceased died intestate), however, cannot commence legal action prior the grant as his title and authority are solely derived from his grant. The above principles apply to both foreign and local executors appointed by a will.

However, an executor, whether he is a local or a foreigner, needs to obtain a grant in Hong Kong before he can collect and distribute deceased’s estate in Hong Kong. The commencement of legal proceedings by an executor would not lead to assets of the estate falling within the hands of the executor before the grant of probate. In other words, an executor, has to obtain a grant in Hong Kong before he can prove his title and receive and distribute properties of the estate in Hong Kong.

The importance of the ability to commence legal proceedings by an executor lies in the limitation period. In respect of a cause of action in favour of the estate of a deceased, the time will begin to run at the time of the deceased’s death if there is an executor under the will. If the limitation period would likely expire before the grant is made, the executor must commence the legal action promptly to preserve the claim.

Conclusion

The decision in Nativivat v Nativivat highlights a key difference between the powers of an executor (in the case of a will) versus an administrator (in the case of intestate) in terms of their respective rights to commence legal proceedings in Hong Kong. Whilst a grant must be obtained before either an executor or an administrator can receive and distribute the estate of the deceased in Hong Kong, the power of the executor (unlike the administrator) stems from the will rather than a grant of probate. Accordingly, an executor, whether local or foreign, would have greater powers to safeguard the deceased’s estate before a grant is obtained and must do so before the expiry of the limitation period.

If you have any question on the above eNews or on probate and administration matters (contentious or non-contentious) or estate planning, experience lawyers in our Probate and Administration and Litigation practice will be pleased to assist you.

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