VANESSA KWAI FUN LUK AND ANOTHER v. KWAI KUN CHOI

HCA4261/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.4261 OF 2003

------------------------------

------------------------------

------------------------

J U D G M E N T

------------------------

1. This is an appeal against the decision of Master J. Wong given on 29 July 2005, dismissing an application by the defendant, Hugo Kwai Kun Choi, for a stay of proceedings on the ground that a binding full and final settlement agreement had been reached between the parties.

The action

2. Hugo Choi and Vanessa Kwai Fun Luk, the 1^st plaintiff, were husband and wife, and they had two children, Natalie and Adrian.  Hugo and Vanessa were divorced in 2002 in Singapore. 

3. Hugo was a beneficiary under his father’s Will, which provided for him to have five thirtieths of the estate, but held on trust for 10 years after the father’s death.  The father died on 24 August 1993, and accordingly the vesting day, on which Hugo’s interest under the Will vested in him, was 24 August 2003.

4. Hugo had, on 17 September 1998, executed a Deed of Assignment, assigning part of his share in the estate to his wife and children.  This action, which commenced on 19 November 2003, arose because Hugo and Vanessa produced different versions of this Deed.  Vanessa, in her personal capacity and as trustee for Adrian, who is still a minor, and Natalie claim for declarations that Vanessa’s Deed is genuine and that Hugo’s Deed is a forgery and so null and void.  Hugo counterclaims for declarations that his Deed is genuine, and Natalie’s is a forgery and so null and void.

The application

5. On 15 March 2005, Hugo applied by summons for an order for stay, on the grounds that a binding full and final settlement had been reached by the parties.  By an order of Master J. Wong dated 4 April 2005, the summons was amended by the addition of the words “save and except for the purposes of the plaintiffs’ application for approval of the settlement agreement, without prejudice to any rights of the plaintiffs in the matter”.

6. The terms of the agreement were set out in a Schedule.  Their stated effect was :

(1)     Hugo was to pay the plaintiffs $13 million inclusive of interest and costs, in full and final settlement of all their claims;

(2)     the sum of $13 million was to be paid out of Hugo’s father’s Will trust, by way of the trustees transferring assets to the plaintiffs in that value, with the proportion of cash and non-cash assets to be transferred in accordance with the proportion of cash and non-cash assets vested in Hugo under the trust;

(3)     the cash and non-cash assets to the value of $13 million were to be divided into four equal shares.  Three shares were to be transferred to Vanessa, for her to hold two for herself and one on trust for Adrian; and one share was to be transferred to Natalie. 

Background

7. Clause 6 of the father’s Will set up a trust fund, which was to be divided into 30 shares; and Hugo’s share was 5/30^th.  The trust fund comprised cash and other receivables, real properties in Singapore and Hong Kong and 193 shares in a private Manx company, Hallam Investment Ltd.   Hallam owned shares in various private companies, which themselves held shares in other private companies. 

8. The trustees consulted the beneficiaries on a proposal to distribute the estate, not by simply assigning to them the shares in Hallam, but by appropriating the underlying assets of the companies it owned, and it appears that all the beneficiaries, including Hugo, originally agreed.  The trustees accordingly caused to be drafted a Deed of Family Arrangement (“DFA”).  But then Hugo’s Deed was brought to the notice of the trustees, in about August 2003.  They re-drafted the DFA incorporating new provisions to withhold the distribution of the assets to which Hugo was entitled, pending resolution of the dispute over the Deeds.  Hugo, it appears, refused to accept the revised draft.  Accordingly the trustees issued HCMP377/2004 on 9 February 2004.  On 15 October 2004 Reyes J made an order for distribution, save and except for Hugo’s share, which was withheld pending the outcome of this action, which had commenced, on 19 November 2003.

9. Hugo’s share of the father’s estate is worth $22,961,792.82.  It consists of cash assets and real property in a ratio of 37.75:62.25.  The effect of Vanessa’s version of the Deed is to assign two equal fifth shares in Hugo’s share to Vanessa absolutely, and a further two fifth shares to her on trust for Natalie and Adrian until they reach majority.  If, therefore, the plaintiffs were to succeed in this action their claim would be worth four fifths of Hugo’s share in the estate, i.e. something over $18 million.  Adrian’s claim would be worth a little over $4.5 million.

10. According to counsel for the plaintiffs, Hugo was, while the negotiation for settlement of this action was on foot, charged with one count of using a copy of a false instrument in contravention of section 74 of the Crimes Ordinance.  The false instrument concerned was Hugo’s version of the Deed.  He was convicted and sentenced to a term of imprisonment sometime in 2005. 

11. The fact of the conviction is not currently pleaded.  There is no formal evidence of the conviction, but there are references to the criminal proceedings in the correspondence, particularly the settlement correspondence before me, and the fact of the conviction does not seem to be in dispute. 

The settlement correspondence

12. Hugo wrote to Vanessa’s solicitors, Messrs Paul C.K. Tang & Co. (“Paul Tang”) on 30 March 2002, saying that he was confident that he could prove that he had agreed to assign Vanessa 10% and the children another 10% of his inheritance, and offering, without prejudice, full and final settlement for $7 million.  This was to be by way of about $5 million in property and the rest in cash.  The cash and properties were to be registered in the joint names of Vanessa and Natalie, half for Vanessa and a quarter for each of Natalie and Adrian.  The children were to receive their shares at age 25.  There were other conditions, including those relating to the Singapore divorce proceedings but I need not set them out here.

13. Hugo was, apparently, advised by Messrs Tanner De Witt (“TDW”) at that time.  On 19 May 2004, Paul Tang wrote to TDW offering, without prejudice, to accept $14 million plus legal costs in full and final settlement.  The operative paragraph reads :

“In view of the above, our clients now counter-offer to accept HK$14 million plus legal costs to be taxed if not agreed in full and final settlement of our clients’ claim against your client in the above Action.  If this counter-offer is accepted, we shall send a notice to the other trustees who will then inform all the beneficiaries under the Will Trust.  Then the other trustees should transfer assets equivalent to the value of HK$14 million directly from the estate under the Will trust to our clients.  The proportion of cash and non-cash assets to be transferred to our clients should be in accordance with the proportion of cash and non-cash assets vested with your client under the Will Trust as administered by the trustees.  For practical purposes, your client should acknowledge that after the settlement our clients are the beneficiaries under the Will Trust and as a result the trustees should owe a fiduciary duty to our clients.”

14. This was followed by a further “without prejudice” letter dated 19 July 2004 from Paul Tang to TDW in the following terms :

“      We understand that your client was arrested and charged with a count of using a copy of a false instrument in contravention of Section 74 of the Crimes Ordinance, Cap. 200.  If your client is convicted, the resolution of the dispute between our respective clients will definitely be a mitigating factor.  Therefore, we are instructed by our clients to make a final offer to your client.

       Our clients offer to accept HK$13 million inclusive of legal costs in full and final settlement of our clients’ claim against your client in the above Action.  When making this offer, our clients have already considered the arguments in your clients’ without prejudice letter dated 13^th March 2004.  Our clients have made proper concession.  In addition, from the settlement sum Madam Vanessa Luk will repay a sum of HK$1.6 million inclusive of interest to her brother-in-law, Mr. K.B. Lock who made a personal loan of HK$1 million to your client more than 10 years’ ago.

       If this offer is accepted, our respective clients should send an irrevocable notice to the trustees of the Will Trust to inform them of the settlement of the dispute.  For practical purposes, your client should acknowledge that after the settlement, our clients are beneficiaries under the Will Trust and as the result, the trustees should owe a fiduciary duty to our clients.  After receiving the trustees’ recognition of the beneficiary status of our clients, we shall discontinue the above Action with no order as to costs with your client’s consent.  Then the trustees should transfer assets equivalent to the value of HK$13 million directly from the Will Trust to our clients.  The proportion of cash or non-cash assets vasted with your client under the Will Trust as administered by the trustees.

       This offer is open for acceptance within 14 days, otherwise it shall lapse.  Both our clients and Mr. Adrian Choi have a very strong view against your client’s attempt to stop financing the education of Miss Natalie Choi and Mr. Adrian Choi in the United Kingdom.  For this reason, time is of essence because our clients would like to make sure that there will be enough money to finance the further education of both Natalie and Adrian in the United Kingdom.

       Our clients would also like to warn your client that this is the final offer.  If the offer is not accepted, we shall proceed with the above Action without further delay.  Irrespective of whether your client will be convicted of the criminal charge, we take the views that your client will have very little chance of success in defending this Action.”

15. Hugo answered by a personal letter dated 24 July 2004 in these terms :

“My solicitor have referred your letter dated 19^th July 2004 to me for my attention.

I did not use any forged instrument to get my inheritance.  My inheritance is mine because my father gave me in his Will.  My name is in the Will.  The criminal charge against me is wrong.

Though I am confident that I will win if the Action goes for trial, I cannot afford to incur more legal fees.  In fact I need the trustees to release some of my inheritance to me urgently, to enable me to settle outstanding legal fees and to clear my name in the said criminal charge as soon as possible.

I do hereby accept your clients’ offer to accept Thirteen Million Hong Kong dollars Only (HK$13 million) inclusive of legal costs in full and final settlement of your clients’ claim against me in the above Action and which also included a settlement of Mr. K.B. Lock’s claim of an alleged debt (which I do not admit liability).  In other words, I agree to the terms of settlement stated in your aforesaid letter dated 19^th July 2004.  I also consent to your clients discontinuing the above Action with no Order as to costs.  In order to avoid doubt, this settlement is with no admission whatsoever on my part — neither the authenticity of your clients’ documents nor the allegations in their pleadings or other documents.

Kindly let my solicitors have a copy of your notice to the trustees to notify them of this settlement as soon as possible.  Thank you.”

Events thereafter

16. On 28 July 2004 Paul Tang wrote to the professional trustee of the Will Trust, Mr Desmond Chiong of Ferrier Hodgson Ltd., advising them that there had been a settlement between the parties in this action, and asking him to confirm that the plaintiffs should become beneficiaries under the trust.  It was said that after receiving confirmation of this, the parties would be consent discontinue the action with no order as to costs.  This letter was copied to TDW.  On 2 August 2004, Hugo also wrote to Ferrier Hodgson Ltd.  confirming the agreement and that he had consented to discontinuance.  He said that he was seeking legal advice on the DFA and would revert thereafter.  Hugo copied his letter to Paul Tang with a request that they proceed to file the Notice of Discontinuance.

17. Messrs Johnson, Stokes and Master (“JSM”) wrote to Paul Tang on 6 August 2004, on behalf of Mr Chiong.  The relevant parts of their letter read :

“The trustees are pleased to hear a settlement between Vanessa and Hugo.  However, until the trustees see a binding settlement agreement executed between Vanessa and Hugo, the trustees are unable to ‘confirm’ the beneficiary status of Vanessa, as until then any “settlement” is nothing more than a proposal.

We should be grateful if you could provide us with the formal settlement agreement between Vanessa and Hugo, and the proof of discontinuance of HCA no.4261 of 2003, upon which we seek the trustees’ instruction to make the necessary amendments to the Deed of Family Arrangement for execution.

To ensure the terms of the settlement can be implemented in the distribution of the trust fund, the trustees would also ask that you impose as a condition precedent to the settlement agreement between Vanessa and Hugo that Hugo shall execute the Deed of Family Arrangement.”

18. Paul Chan passed this on to TDW, and this was followed by Hugo’s personal reply dated 14 August 2004.  Hugo said, in effect, that he had consented to discontinuance; once he had notified the trustees of the settlement, the dispute was settled, without any admission on his part.  He had been advised that the trustees had no right to dictate the terms of the settlement or to tell the beneficiaries what to do with their inheritance.  There was no need to seek their approval.  Hugo insisted that he had agreed to the proposed terms that the action should be discontinued; he said that he would not consent to any variation of this term by having any consent order added; and insisted that Paul Tang file a Notice of Discontinuance in three days. 

19. On 16 August 2004, Paul Tang wrote to TDW with a copy of Hugo’s letter, pointed out that unless the trustees confirmed the plaintiffs’ status as beneficiaries, Hugo would not be able to ay the settlement sum, and suggested that a Deed of Settlement be executed.  Reference was made to an expected hearing of HCMP377/2004 on 23 September.  Hugo answered this directly, insisting that he had confirmed the settlement and that the plaintiffs discontinue, otherwise either he would seek to have the action struck out or he would rescind the settlement. 

20. Correspondence continued.  Hugo on 3 September 2004 sent to Mr Desmond Chiong an irrevocable notice that $13 million was to be the total that Vanessa, Natalie and Adrian would receive; the proportions of cash and non-cash assets to be transferred to them were to be in accordance with the proportions to be distributed to him from the trust fund; and the ratio of distribution between them was 10:5:5, as he had originally proposed, or four equal shares, two going to Vanessa and one each to Natalie and Adrian.

21. This, however, did not suit the trustees.  JSM wrote to Hugo on 7 September 2004 to the effect that the terms of settlement did not specify which of the non-cash assets was to be transferred to Hugo, and which to the plaintiffs.  Without this information, the trustees could not effect any transfer.  Once this was decided, a further revised DFA would be prepared.  Reference was also made to the need for court approval of Adrian’s settlement under Order 80.

22. This letter was copied to the solicitors.  TDW advised that they had ceased to act, and Hugo filed a Notice to Act in Person on 6 September.  Then Messrs Lau, Lee and Tang (“LLT”) commenced acting for Hugo and asked for a list of the non-cash assets that Vanessa sought.  So on 24 September Paul Tang set out, in a letter to LLT, four options.  Further options were put forward by e-mail.  By 28 September oral agreement had been reached that six properties plus cash of $5,500 would be assigned to the plaintiffs.  Paul Tang drafted a Deed of Settlement, and sent it to LLT and JSM.  Paul Tang suggested that once the contents of the Deed were agreed, they would circulate it for execution and draw up summonses for infant settlement and for a Tomlin order to stay the action with no order as to costs.

23. According to Paul Tang, this settlement was premised on the valuations exhibited to Mr Chiong’s 4^th affirmation in HCMP 377/2004.  He then learnt from JSM that there had been no investigation into the estate’s title to the six properties.  He considered that the assumption of good title to the properties might not be valid, and the values attributed to them might not be realistic.  Correspondence with JSM followed, but the trustees were not willing to investigate title.  Paul Tang asked LLT to do so; but by the time HCMP377/2004 came back before Reyes J on 15 October, it having been adjourned to that date to enable the preparation of a settlement agreement and a fresh DFA, this was not done. 

24. Attempts had been made to agree a Deed of Assignment.  These however fell through.  The position was set out in Paul Tang’s letter of 14 October 2004, written after the receipt of LLT’s revised draft Deed of Assignment.  The objections were :

1.  Paragraph 3 of the operative part of the Deed of Assignment provided for the plaintiffs to waive “all costs howsoever and wheresoever incurred”.  Objection was taken to this on the basis that it meant that Vanessa would not be able to claim costs of her matrimonial proceedings in Singapore, and was a new term of settlement, not covered by the original offer which was that the $13 million should include the costs of this action

2.  Objection was taken to a requirement of confirmation of payment by Vanessa of $1.6 million to a Mr K.B. Lock, which Vanessa had offered, because Hugo had denied liability for it.

3.  Objection was taken to paragraph 2 of the operative part which provided for alternative settlement by other cash and non-cash assets of equal monetary value if the settlement assets were not received under Hugo’s inheritance.  Also a title check of the settlement properties was required.

4.  Objection was taken to a provision for Vanessa to hold Adrian’s share in trust until he reached 21 years.

25. In the premises, wrote Paul Tang, there was no settlement.  He would inform the court and re-activate this action without delay.

26. The order which Reyes J made on 15 October 2004 was that Clause 6 of the Will Trust be replaced by the provisions of the DFA, along with provisions authorising the trustees to deal with the trust fund and effect distribution of the assets to the beneficiaries in accordance with the DFA.  The operative parts of the order were made by consent.  The DFA, which is attached to the order, records at paragraph 6(d) to (f) of the recitals the fact of the dispute and these proceedings arising from it; that Vanessa, Natalie and Hugo have been negotiating a settlement, but at the date of the DFA there is no agreement containing the full terms of that settlement; that agreement is yet to be finalised on the apportionment of cash and non-cash assets, the allocation of specific non-cash assets and the provision for costs; and that pending such settlement the trustees do not have sufficient instruction and are not able to effect distribution to Vanessa, Natalie, Adrian and Hugo.  

27. Hugo, in his 2^nd affirmation, says that as far as he can remember he never instructed his lawyers to proceed on the basis that there was no settlement, nor did his lawyers do anything showing that there was no settlement.  It is true that his counsel appears to have told the court that agreement had been reached on the non-cash assets to be transferred.  But certainly the court appears to have been given the impression by all legal representatives concerned that there was no final agreement containing the full terms of the settlement.

28. Correspondence continued thereafter, in relation to the checklist hearings for this action, the matrimonial proceedings and other matters.  In connection with the matrimonial proceedings, Hugo proposed to ask the trustees to make an interim distribution to pay outstanding and future maintenance up to April 2005.  In response to a query from Vanessa’s Singapore solicitors, Hugo confirmed that the maintenance was to come from his net share of the estate, and without prejudice to the plaintiff’s claim in this action.  A deed of indemnity was prepared and sent to the trustees and this provided that Hugo acknowledged that the sums to be paid were in part payment of his claim in the residuary estate and subject to the resolution of the dispute between himself and Vanessa as to their respective entitlements. 

29. It appears, therefore, that Hugo was not insisting that there had been a settlement; and the documents are at least equivocal as to whether he was trying to include the payments under the matrimonial proceedings as part of what Vanessa should ultimately receive.

30. In fact the first assertion that there was a concluded settlement seems to have come through the Singapore solicitors acting for Hugo in the matrimonial proceedings there, in January 2005.  This was repeated in a letter from Hugo’s new Hong Kong solicitors, Messrs Ha & Ho on 10 January. 

The issues

31. What Hugo says that he is entitled to by virtue of the agreement is discontinuance.  He cannot force discontinuance; so he is trying to obtain the same result by applying for a stay of proceedings.

32. A party may apply for stay where there is a dispute as to whether a concluded compromise has been arrived at.  The court may, if necessary, order a trial of the issue.  See Atkins Court Forms, 2^nd edition, vol.37, page 199.  It does not appear that either party is seeking a trial of the issue whether there is a concluded agreement.  Mr Chan SC, counsel for Hugo, appeared to hint that there might be a need for a trial of the issue, given that Ms Wong, counsel for the defendants was relying on the background matrix of facts, but when I asked him, he confirmed that his primary position was that the matter could be dealt with summarily.  I agree that it can and I do not see any need for a trial of the issue.

33. It is true that consideration for a settlement might be executory rather than executed; a promise to pay, if accepted, is sufficient to discharge the original cause of action from the date when the promise is made.  See British Russian Gazette and Trade Outlook Ltd v. Associated Newspapers Ltd[1933] 2 KB 616 at 644.  But whether the promise has been accepted is obviously a question of fact; particularly since a promise pretty useless in most cases, and not worth accepting in settlement of a cause of action.

34. If there is a settlement, then at least for the purposes of enforcing it, the effect of the settlement is to extinguish the cause of action and deprive the court of the jurisdiction to enforce it.  See Green v. Rozen, [1955] 1 WLR 741.  That is no doubt why in most cases, where a stay is agreed, it will be by way of a Tomlin order which stays the action except for the purpose of carrying into effect the terms of the agreement as to  how it is to be executed. 

35. However, stay of proceedings is in any event discretionary.  There was no specific argument on the point but I would have thought that, even if there was a concluded agreement, the court’s hands would not be tied.  The court might not have jurisdiction to enforce the agreement in the current proceedings, but they would still be alive and the court would have jurisdiction to stay or not to stay them according to what the justice of the case required.  At the very least the court could impose terms for the stay.

36. The primary issue is whether or not there was a concluded agreement.  The defendant says there was, and that the next issue is whether the settlement agreement extinguished the cause of action.  If it did, the action cannot continue.  If it did not, the next question is whether the defendant has repudiated the agreement, and if yes, whether the plaintiffs have accepted the repudiation.  If the answer to either is “no”, then the action cannot proceed.

37. The plaintiffs say that the issues are first, whether or not there was a concluded agreement.  They say that there was none; there was a condition to the discontinuance of the action that the trustees should recognise the plaintiffs as beneficiaries, and the trustees never did. 

38. Then, say the plaintiffs, if the letters could be regarded as constituting a complete and binding agreement for settlement, Hugo has elected irrevocably not to assert or rely on it, and is estopped by his election.  Alternatively, the parties agreed or assumed expressly and/or impliedly by conduct that neither would be bound without signing a deed of settlement and the DFA.  Therefore Hugo is estopped by convention from asserting a binding settlement. 

39. The plaintiffs also argue that the second term contended for was subsequently varied by agreement of the parties as to the make-up of the $13 million, between cash and non-cash assets, and if the court accepts that there has been a settlement, this term should be replaced by one for the payment of the $13 million out of the trust fund by direct transfers of the settlement assets to the plaintiffs.  Mr Chan SC, who appears for Hugo, says that if it is accepted that there was a settlement, there would be no objection to this.

40. Finally there is the question of the court’s approval of the settlement, if there was one, in respect of Adrian.  Mr Chan argues that approval is not necessary because this is an action by a trustee.  Vanessa is claiming as trustee and not on behalf of Adrian, who, as beneficiary, has not locus to sue, therefore Order 80 rule 10 does not apply.

Was there a complete and binding settlement agreement?

41. The agreement is contained in the four letters, two of which have been set out in full above.  There appears to be no dispute that the parties agreed a figure of $13 million, inclusive of the costs of this action, and that this was to be met by a transfer of cash and non-cash assets from the Will Trust in the same proportions as those vested in Hugo.  This latter agreement was later modified to an agreement to transfer $5.5 million cash and six specified properties.  There was also an agreement as to the shares which were to go to Vanessa, Natalie and Hugo.

42. Really the question is whether the requirement that the trustees’ recognition of the beneficiary status of the plaintiffs was a condition of the agreement, as the plaintiffs say, or simply some kind of practical steps to make it smooth for both parties to perform the agreement, as the defendant says.

43. Any agreement must be construed in the light of the background matrix of fact known to the parties or “the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.”  See Investors Compensation Scheme Ltd v. West Bromwich Building Society [1998] WLR 896 at 912.

44. Here, the parties knew that Hugo had no money to speak of, except what was coming to him from the Will Trust.  There was no way Hugo could pay $13 million in settlement of the plaintiffs’ claims; that had to come from the trustees.  It appears from what was going on in matrimonial proceedings between Vanessa and Hugo in Singapore that Hugo was not even good for maintenance or the children’s school fees.  So the only way to execute any promise to pay $13 million was by procuring the trustees to make the transfers. 

45. Paul Tang in the letter date 19 July said quite specifically “After receiving the trustees’ recognition of the beneficiary status of our clients, we shall discontinue the above Action…”.  Hugo in his letter of 24 July accepted the offer to accept $13 million, without admission of liability, then continued “In other words, I agree to the terms of your settlement”. 

46. I cannot see that Paul Tang’s words are simply some sort of attempt to smooth the way for the parties to perform the agreement.  The discontinuance was linked to the acceptance by the trustees of the beneficiary status, in other words, putting Vanessa, Natalie and Adrian in Hugo’s shoes for assets to the value of $13 million.  Indeed, as it turned out, that was not enough.  There had to be specific agreement as to the identity of the properties to be transferred, to make up, along with cash assets, the value of the $13 million.  But there was no point in the plaintiffs’ simply saying, “you agree to pay $13 million and we will discontinue the action”.  That would have left them at Hugo’s mercy as to when, if ever, they saw the money. 

47. It seems to me that on a plain reading of the documents, a reasonable man knowing the background would have to say that there was no concluded agreement.  There were far too many loose ends.  In particular there was a condition that the trustees had to accept the plaintiffs’ beneficiary status before the action could be brought to an end.  And any settlement had, in practical terms, to suit the trustees or else it would be worthless. 

48. It is true that, in dealings with the trustees thereafter, Paul Tang asserted the status of beneficiaries in the trust on the basis that there had been a settlement.  It is argued that this is inconsistent with the plaintiff’s position that there was no settlement.  I do not agree.  There was no doubt a settlement but it had a condition which was not fulfilled.  In making those assertions Paul Tang was trying to get the condition fulfilled by other means; in other words to tie up loose ends. 

Estoppel

49. I have set out above what has happened since the exchange of correspondence up to July 2004.  It is clear from the correspondence and the actions taken that Hugo did not, in the early stages, rely on the settlement he now contends for; instead he co-operated at least to some extent in attempts to sort out matters with the trustees so that assignment of the properties could be made to the plaintiffs.  Further, it is clear that the parties all acted on the basis that no one would be bound without signing a deed of settlement or the DFA or both.  It is argued for Hugo that there were no unequivocal representations made, which would be sufficient to give rise to estoppel; all that Hugo was doing was trying to achieve a settlement.  However I tend to agree with Ms Wong’s arguments for estoppel, insofar as it is necessary to do so.

50. In fact, I do not think it is really necessary to go into a lengthy consideration of estoppel, or a finding on it.  The situation in is, quite simply, that the parties have not in fact been able to agree all the terms which would be necessary to give effect to the settlement agreement contended for. 

Conclusion

51. Since there has been no concluded agreement in the terms contended for, as amended to take into account the later agreement for the transfer of $5.5 million in cash and six named properties by way of non-cash assets, it follows that the action should not be stayed. 

52. Even if there were such an agreement , in my view it would still not be appropriate to stay proceedings, except perhaps on terms which would provide for its execution.  All the loose ends would still need to be tied up.  The parties are obviously not far apart; the major sticking points are Hugo’s attempt to include the Singapore legal costs, which were never on offer anyway, and the plaintiffs’ concern to make sure that what they would get is really worth $13 million.  Obviously, if there were any problem with the titles, the non-cash assets would not be worth the figures currently put on them and some other arrangement would have to be worked out. 

53. It is no doubt legally correct say that, if settlement were proved, the plaintiffs would have a new cause of action based on the settlement agreement, so these proceedings should come to an end.  However, in practical terms that would be to the benefit of neither party.  It would simply give rise to more litigation.  The outcome would be worse for all than would keeping this action alive.

Order 80

54. This would only require consideration if stay were ordered.  Mr Chan argues that Order 80 rule 10 does not apply because Vanessa is acting as trustee.  A beneficiary has no locus to sue.  The action is not brought on Adrian’s behalf.  The settlement would be between Hugo and Vanessa in her personal capacity so it would not come within Order 80.

55. Rule 10 regulates the position where money is claimed on behalf of a person under a disability.  There is no monetary claim in these proceedings, which are purely for declarations.  I do not see, therefore, that rule 10 applies.  However, rule 12 applies where, in any proceedings money is recovered by or on behalf or, or is adjudged or ordered or agreed to be paid to, or for the benefit of, a person under a disability.  If there were a settlement, therefore, money would be paid to Vanessa for the benefit of Adrian and it seems to me that rule 12 would apply. 

56. If therefore, stay were ordered, it would be necessary to order it save and except for the purposes of the plaintiff’s application for approval of the settlement agreement.  However, I think that the requirement for such approval would of itself militate against the discretionary grant of a stay.  Adrian would get a quarter of the $13 million, subject to approval by the court.  If the settlement of Adrian’s quarter share were not approved, for any reason, that would surely call into question the settlement of the other three quarters. 

Conclusion

57. For the above reasons, I do not consider that stay is appropriate.  The appeal is therefore dismissed with costs to the plaintiffs to be taxed if not agreed.