TAM LAN CHI LORCHE, suing as an Administratrix of the Estate of Tam Kam Fai Francis, deceased v. CHAN SIU MUI

HCMP 2084/2017

[2022] HKCFI 2637

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2084 OF 2017

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D E C I S I O N

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1.  This is the plaintiff’s application to vary the costs order nisi by adding “and the plaintiff is entitled to an indemnity for her own costs and her costs liability to the defendant out of the estate”.

2.  The parties’ position at the trial is set out at paragraph 2 of the Judgment in these proceedings dated 18 February 2022 ([2022] HKCFI 517), namely:

“2.  Amongst the Estate of the Deceased is the property known as Flat E on the 10^th Floor of Tower 15, Costa Del Sol (Phase IIB), Laguna Verde, No 8 Laguna Verde Avenue, Kowloon, Hong Kong (the “Property”).  The plaintiff claims that the Property was jointly owned legally and beneficially by the Deceased and the defendant as tenants in common, and seeks a declaration from the court that the Property is held by the Estate and the defendant as tenants in common in equal shares. The defendant, on the other hand, maintains that she and the deceased owned the Property as beneficial joint tenants, and seeks a declaration that the defendant has become the sole beneficial owner of the Property upon the death of the Deceased.” (Emphasis added)

3.  At paragraphs 24 and 25 of Kwan Chui Kwok Ying v Tao Wai Chun et al, HCMP 2996/1990 (unrep, 4/05/2007), DHCJ To (as he then was) had this to say:

“24. On the face, Hongkong Bank Trustee Ltd v Lee See Ching John is similar to the present case, but it is distinguishable. In that case, the defendant was asserting a positive claim to monies he held on behalf of the estate as gifts. His claim is obviously adverse to the interests of the other beneficiaries. Pang J was clearly right to hold that was a hostile litigation and it is neither just nor reasonable that the defendant should have his costs paid out of the estate. But in the present case, the 6^th Defendant was not asserting any claim to anything in the estate which is personal to himself. He was querying the status of the 15^th Defendant for the benefit of all the other beneficiaries. …

25. The effect of the Third Party Proceedings, if the 6^th Defendant is successful, is to exclude the 15^th Defendant from the estate. I have no doubt that the litigation is adverse, viewed through the eyes of the 15^th Defendant. But it is not necessarily so from point of view of the estate. By these proceedings, the 6^th Defendant sought a determination whether the 15^th Defendant is a legitimate son of the Father. He is ascertaining the status of one of the beneficiaries which is a question of interest to all the other beneficiaries. This is a question which has arisen in the administration of the estate which would have justified the Plaintiffs as adminstratrix to seek a determination. A similar question as to the status of the 1^st to 5^th Defendants as beneficiaries of the estate was asked in the main action. That litigation was not considered as adverse and the estate paid the costs of all the parties involved. I can hardly find any distinction between that action and the present one. Whether the challenger has anything to gain and the challenged has anything to lose is not determinative of the nature of the proceeding. At best, that is prima facie evidence that the proceeding is hostile but it is not conclusive. Indeed, in In re Buckton, if the applicant was successful, the other beneficiaries’ interest would be adversely affected. Yet, Kekewich J held that the litigation was nevertheless amicable because it was a convenient way to resolve the dispute. In the Third Party Proceedings, if the 6^th Defendant is successful, the 15^th Defendant would be excluded from the estate. The 6^th Defendant would have as much to gain as have any other beneficiaries, all at the expense of the 15^th Defendant. But the 6^th Defendant has nothing to gain personally over and above that of the other beneficiaries. As in In re Buckton, the Third Party Proceedings are a convenient means to have an issue which is of interest to the estate and which has arisen out of the administration of the estate determined.” (Emphasis added)

4.  In the circumstances, I would allow the plaintiff’s application to vary the costs order nisi.  Although the proceedings herein were conducted by the plaintiff in a hostile manner, they are in substance for the benefit of the estate.  The plaintiff sought determination of an issue of interest to the estate and which had arisen out of the administration of the estate.

5.  I make no order as to the costs of this application.