CHEUNG AU YUEN ROSALIND AND ANOTHER v. WONG KAN KIU AND ANOTHER

HCA 850/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 850 OF 2011

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D E C I S I O N

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1.  This action involving, among others, the estates of 2 former partners in business and property investments, Cheung Ka Kui Kenneth (“Cheung”) and Chow You (“Chow”), was tried and the judgment handed down. The defendants now take out the present applications.

THE APPLICATIONS

2.  In this action, the estate of Cheung claimed against Madam Wong in her personal capacity (the 1^st defendant) or alternatively, her in the capacity as the administratrix of the estate of Chow, her late husband (the 2^nd defendant), for repayment of loan advanced by Cheung and received by Madam Wong during his lifetime.  In both capacities sued, Madam Wong denied the claim.  On behalf of the estate of Chow, Madam Wong further claimed, by way of counterclaim, against the estate of Cheung for account of rental income from the properties co-invested by Chow and Cheung.

3.  After trial, I handed down judgment on 10 August 2015.  I found for the plaintiffs and that Madam Wong in her capacity as the administratrix of her late husband’s estate is liable to repay the amount claimed with interest from the date of writ until judgment at the HKBC best lending rate plus one percent.  Interest from judgment shall run at the judgment rate until payment.  The claim for the same against Madam Wong in her personal capacity in the alternative is dismissed.  I also dismissed the counterclaim by her on behalf of the estate of Chow.

4.  I made a nisi costs order that Madam Wong in her capacity as the administratrix of the estate of Chow shall pay the plaintiffs’ costs of this action, including any costs reserved, but no order as to costs between the plaintiffs and Madam Wong in her personal capacity.  Costs shall be taxed, if not agreed.  The parties had 14 days to apply for variation.

5.  By summons dated 20 August 2015, Madam Wong, in her capacities as both defendants, applies to vary the nisi costs order.  She asks that the plaintiffs are to pay the costs of defence incurred by her in her personal capacity; and that she in her capacity as the administratrix of the estate of Chow is to pay the plaintiffs’ costs of the action incurred since 27 June 2012.  That was the date of the consent order whereby she in her such capacity was joined as the 2^nd defendant.

6.  By notice of motion dated 8 September 2015, Madam Wong for and on behalf of the estate of Chow applies to alter the judgment to the effect that pre-judgment interest shall run from the date when she, in her capacity as the administratrix of the estate of Chow, was joined in the action.  The date of that was said to be 18 July 2012, which was the date when the statement of claim was amended pursuant to the joinder.

VARIATION OF THE NISI COSTS ORDER

7.  Costs is a matter of discretion of the court.  O.62, r.3(2) of the Rules of the High Court, Cap 4A provides that the court shall (subject to the rules) order costs to follow event, except when it appears to the court that in the circumstances of the case, some other order should be made as to the whole or part of the costs.  The special matters to be taken into account in exercising discretion are set out in the new O.62, r.5.

8.  Following judgment against the estate of Chow and dismissal of the claim against Madam Wong in her personal capacity, it is argued on behalf of the defendants that there is no reason to deprive her of her costs of defence.  It is also argued that the plaintiffs should only be entitled to their costs against the estate of Chow incurred since the latter was joined as the 2^nd defendant.

9.  The plaintiffs disagree.  It is pointed out that the money paid by Cheung was received by Madam Wong in her name, and it was for the plaintiffs, from their point of view and objectively, not unreasonable to bring the claim against her.  Subsequently Madam Wong applied to join the estate of Chow as a defendant.  One of the grounds was that the money being claimed by the plaintiffs were received by her in her capacity as the administratrix of such estate, not her personal capacity.  Whether it was reasonable for the plaintiffs to have opposed the application in the first place ceased to be material, as they eventually consented to it and the parties also consented to the costs of that application to be in the cause.  What matters was that the plaintiffs are taken to have accepted that the estate of Chow was a necessary party to the claim.  This was manifested by their amendment so as to sue Madam Wong, in her capacity as the administratrix of the estate of Chow, as the alternative party liable to their claim.

10.  What Madam Wong contended, both prior to and after the joinder, went beyond denial of receipt of such money in her personal capacity.  In both her personal capacity and on behalf of the estate of Chow, Madam Wong ran the same defence of denying the repayable nature of the money received and any liability to repay to the plaintiffs.  I found against her on such contention.  After the evidence was tested at trial, the plaintiffs accepted that judgment ought to be given against the estate of Chow instead of Madam Wong personally.  However, that, the plaintiffs argue, does not render the commencement and the maintaining of the claim against Madam Wong in her personal capacity until then unreasonable.

11.  Considering all the arguments, I am prepared to accept that following the dismissal of the claim against her, Madam Wong is in principle entitled to her costs of defence in her personal capacity; and to that extent, the costs order between the plaintiffs and Madam Wong in her personal capacity may be varied.  However in the circumstances as set out above, I maintain that the estate of Chow should bear the plaintiffs’ costs of the action, which should include such costs now payable by the plaintiffs to Madam Wong personally.

12.  Specifically, in the circumstances of this case, I do not accept the contention that the liability of Chow’s estate to the plaintiffs’ costs should be demarcated and limited by reference to the date of its joinder.  Except for the denial of receipt of the moneys from Cheung by Madam Wong in her personal capacity, the allegations in the claim and the defence of Madam Wong in both her defending capacities were the same.

ALTERING THE JUDGMENT ON INTEREST

13.  The notice of motion on its face does not say, but it is contended that the jurisdictional basis for the application is O.20, r.11 of the Rules of the High Court.  That would be amendment of a judgment, albeit perfected, for error arising out of accidental slip.  The existence of the jurisdiction is not disputed.  But the basis for the estate of Chow to seek to invoke such jurisdiction is.

14.  Essentially it is suggested that the court was under the misapprehension that both defendants were parties to this action from the outset, and the parties also did not specifically address the court on interest during the trial.

15.  I do not accept the suggestion.  Quite apart from the order for the joinder, a copy of which was actually included in the trial bundle, the fact that the estate of Chow was joined pursuant to the order of the court was actually expressly pleaded in the amended statement of claim.  There is no basis for suggesting that this court was somehow unaware of that.

16.  Whether the parties specifically addressed the issue of interest is immaterial, so long as neither of them was prevented from doing so during the trial.  The court just had to rule on interest as part of the pleaded claim.  The suggestion now made on behalf of the estate of Chow cannot be dressed up as an error or slip.

17.  The defendants also take issue as to the sealing of the judgment in that the plaintiffs are said to have disregarded the defendants’ query about the order as to interest.  However, what happened was that the plaintiffs submitted the draft judgment to the court for approval on 13 August 2015, which was 3 days after the judgment was handed down.  Pending the approval, the plaintiffs’ solicitors wrote to the defendants’ solicitors demanding for satisfaction of the judgment.  The defendants’ solicitors wrote back on 26 August 2015 taking issue as to the interest, such letter was received in the following morning when the sealed judgment from court was also made available to the plaintiffs’ solicitors.

18.  The defendants’ criticism of how the plaintiffs proceeded with the sealing of the judgment, in my view, is unfair.  It was also not that the defendants took issue as to interest after the handing down of the judgment.  They did so only upon the demand for satisfaction later as mentioned above.  More relevantly, whilst they complained as if the plaintiffs’ solicitors came up with their own computation of interest, which was not the case, the defendants’ solicitors made no suggestion of any ambiguity, let alone error, in the judgment in this respect. This was manifested by the fact that no clarification with the court was sought in that respect.

19.  This is not a case where there is error or failure of the order to incorporate or reflect what the court obviously had in mind in the judgment.  The judgment, including the part as to interest (at §59), was literally clear; and the terms of the judgment eventually sealed aligned with that.  The defendants merely disagree with the award for interest.  For that, an application purportedly pursuant to O.20, r.11 is not the venue.

20.  This should have sufficed to dispose of this application.  Yet even assuming that the application is entertained on its substance, I am not satisfied that the objection to the award of interest made is justified.

21.  What the defendants argue essentially is that whilst demand for repayment was sent to Madam Wong in her personal capacity by the commencement of this action at the latest, no formal demand was addressed to Madam Wong in her capacity as the administratrix of the estate of her late husband until her joinder in such capacity.  Therefore, it is argued, interest on the debt recovered should not run until the joinder of her in such other capacity.

22.  There is no dispute that interest is a matter of discretion under section 48 of the High Court Ordinance, Cap 4.  The discretion should be exercised after considering all the circumstances of the case.  In the present case, Madam Wong in her both capacities, represented by the same legal team, ran the same defence essentially denying the repayable nature of money paid by Cheung and liability to repay to the plaintiffs.  It is in my view artificial and unjust to deprive the plaintiffs, who succeed in recovering the money, of interest on the basis now contended.

ORDER

23.  As to the defendants’ summons, I vary the nisi costs order so that: (i) Madam Wong shall have her costs of defence in her personal capacity (1^st defendant); and (ii) the plaintiffs shall have their costs of this action, including any costs reserved, against Madam Wong in her capacity as the administratrix of the estate of Chow (2^nd defendant), which shall also include the costs payable by the plaintiffs to her under (i).  Costs remain to be taxed, if not agreed.

24.  The notice of motion by the estate of Chow is dismissed.

25.  I make a nisi order that: (i) Madam Wong in her personal capacity (1^st defendant) shall have half of the costs of and occasioned by the summons against the plaintiffs, while the plaintiffs shall have half of their costs of and occasioned by the summons against Madam Wong in her capacity as the administratrix of the estate of Chow (2^nd defendant); (ii) the plaintiffs shall have their costs of and occasioned by the notice of motion against Madam Wong in her capacity as the administratrix of the estate of Chow (2^nd defendant); and (iii) costs shall be taxed, if not agreed.  This nisi order shall become absolute in the absence of application in 14 days for variation,