KAN YUK SUM v. KAN YUK SHING (in his personal capacity and as the executor of the estate of Tam Lee Yau)

HCMP 268/2023

[2025] HKCFI 1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 268 OF 2023

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D E C I S I O N

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Introduction

1.  The plaintiff (“Sum”) and the defendant (“Shing”) are brothers. These proceedings concern the administration of the estate (“the Estate”) of their late mother (“Mother”)

2.  By Sum’s summons dated 3 January 2025 (“the Summons”), Sum seeks leave to discontinue the proceedings herein with costs to Sum. Shing’s position is that he does not dispute the leave application, but he says that costs of these proceedings should be awarded to him. So the dispute between the parties is who should bear the costs of these proceedings.

3.  In this hearing, Sum is represented by Mr Dickson Chan, and Shing is represented by Mr Ronald Pang.

The facts

4.  The following facts are not in dispute:

Date	Event
1991	Sum emigrated to Canada.
8 Feb 2011	Mother passed away. By Mother’s Will, the residue of the Estate was to be divided into 3 equal shares, with 2 shares to Sum and 1 share to Shing. Shing was appointed as the sole executor of the Estate. The property on G/F, No.697 Shanghai Street, Kowloon (“the Property”) was the only asset of the Estate.
21 Aug 2021	Sum commenced HCMP 1150/2021 under Order 58 for determination of two questions out of the administration of the Estate.
30 Aug 2011	The Probate of the Estate was granted to Shing.
18 May 2022	In HCMP 1150/2021, Sum and Shing reached a settlement agreement. They agreed that the Property would be sold, and Shing’s costs would be paid out of the Estate on trustee basis. As to Sum’s costs, the matter was argued before B Chu J.
24 May 2022	In HCMP 1150/2021, B Chu J handed down a decision on costs (“Costs Decision”), in which the learned judge decided that Sum’s costs in that case be paid by the Estate on solicitor and client basis.
31 Oct 2022	Sale of the Property pursuant to the agreement reached by Sum and Shing.
17 Nov 2022	Sum’s solicitors wrote to Shing’s solicitors asking for various documents, including documents showing funeral and testamentary expenses of Mother and costs incurred by Shing in the administration of the Estate. Sum’s solicitors also asked for a breakdown of Sum’s entitlement under the Estate.
22 Nov 2022	Shing transferred proceeds of sale of the Property to Sum.
23 Nov 2022	Shing’s solicitors replied to Sum’s solicitors and said that they were still taking instructions from Shing and would revert in due course.
24 Nov 2022	Sum received from Shing: (1)  a sum of CAD 2,521,763.91 via bank transfer; and (2)  a document with the title “Distribution of Estate of the late Tam Lee Yau” with annexures: (a)  “Statement of Account” (“Annex I”) (b)  a document with the title “Inventory and Account of the Deceased Tam Lee Yau” (“Annex II”)
5 Dec 2022	Sum’s solicitors wrote to Shing’s solicitors seeking, inter alia, supporting documents of all costs and expenses in Annex I and Annex II (“Supporting Documents”).
6 Dec 2022	Shing’s solicitors wrote to Sum’s solicitors and stated that Shing would like to personally deal with Sum. Shing’s solicitors also said that Shing was in the stage of distribution of the Estate.
8 Dec 2022	Sum’s solicitors replied and said that they were instructed by Sum to liaise with Shing. Sum’s solicitors also asked Sum’s solicitors to indicate whether they had instructions to deal with Sum’s solicitors concerning the distribution of the assets in the Estate by 12 December 2022.
13 Dec 2022	Sum’s solicitors wrote to Shing repeating the contents in their letter dated 5 Dec 2022 and requested him to provide the Supporting Documents.
3 Jan 2023	Sum’s solicitors issued a final notice to Shing, repeating their demands for the Supporting Documents.
7 Jan 2023	Shing issued a Chinese letter to Sum’s solicitors, in which he stated that he did not understand English, and he requested to have a Chinese translation of the letter dated 3 Jan 2023.
13 Jan 2023	Sum’s solicitors wrote a Chinese letter to Shing, enclosing a Chinese translation of the letter dated 3 Jan 2023.
20 Jan 2023	Shing wrote to Sum’s solicitors and asked for a Chinese translation of the letter dated 13 Dec 2022.
21 Feb 2023	Sum issued an Originating Summons (“the OS”) and commenced the proceedings herein. Sum also filed his affirmation in support of the OS (“Sum 1st Aff”). In the OS, Sum sought an order requiring Shing to produce the Supporting Documents by an affirmation.
17 Mar 2023	Shing’s solicitors wrote to Sum’s solicitors, enclosing the Supporting Documents. Shing’s solicitors invited Sum to discontinue the action with no order as to costs (“Shing’s 1st Offer”).
22 Mar 2023	Shing filed his affirmation in opposition to the OS (“Shing 1st Aff”), exhibiting the Supporting Documents.
3 Apr 2023	Sum’s solicitors wrote to Shing’s solicitors, requesting for justification and proof of some matters in the Supporting Documents.
11 Apr 2023	Shing’s solicitors provided answer to the requests made by Sum’s solicitors in their letter dated 3 April 2023.
3 Jan 2025	Sum took out the Summons and filed his 2nd affirmation (“Sum’s 2nd Aff”) in support of the Summons.
10 Jan 2025	Shing’s solicitors wrote to Sum’s solicitors and invited Sum to discontinue these proceedings with no order as to costs (“Shing’s 2nd Offer”).
21 Feb 2025	Shing filed his 2nd affirmation (“Shing’s 2nd Aff”) in opposition to the Summons.
24 Mar 2025	Sum filed his 3rd affirmation in reply to Shing’s 2nd Aff.

5.  In Sum’s 2^nd Aff, Sum explained why he decided to seek leave to discontinue these proceedings:

“15. On 17 March 2023, [Shing] via his legal representatives produced the Supporting Documents sought in the OS.

16. On 22 March 2023, [Shing] filed [Shing 1^st Aff]. In [Shing 1^st Aff], his first ground of opposition was precisely that he has “since the [OS] provided all the supporting documents demanded” (§20) and because of that, “the continuation of the present proceedings serves no useful purpose” (§21).

17. In light of [Shing]’s provision of all the supporting documents sought by [Sum], the relief sought in the OS has effectively been satisfied and there is no reason to continue this action, save for the determination of who bears the legal costs.” (Italics in original)

6.  In Sum’s 3^rd Aff, Sum clarified that notwithstanding the production of the Supporting Documents by D’s solicitors on 17 March 2023, some matters would still need to be clarified. The clarification was only provided by D’s solicitors on 11 April 2023.

The parties’ respective submissions

7.  There is no dispute that the principles regarding costs in administration proceedings are those set out by Kekewich J in Re Buckton[1]. Regarding these principles, in Cheng Pui Yuen v Worldcup Investments Inc[2], Lord Scott of Foscote NPJ said:

“56. The case on costs …… is based on the principle that where proceedings have been properly instituted for the benefit of a trust fund, or a deceased’s estate, the court may, in an appropriate case, make an order for the costs of the proceedings to be borne by the fund or estate, as the case may be. The principle was explained by Kekewich J in Re Buckton [1907] 2 Ch 406 at pp.414/415. He referred, first, to cases in which trustees ask the court to determine some question which has arisen in the administration of the trust. In such cases, said Kekewich J, the general rule would be that the costs of all necessary parties would be taxed as between solicitor and client and paid out of the estate. He then referred to a second class of case in which the question for determination by the court is raised not by the trustees but by some of the beneficiaries. In such a case, if the question raised would have justified an application by the trustees but for some reason or other the application has been made by beneficiaries, the same costs consequences, he said, should follow:

‘The application is necessary for the administration of the trust, and the costs of all parties are necessarily incurred for the benefit of the estate as a whole.’ (p.415)

Kekewich J distinguished, however, the first and second classes of case from the third class, a class where the application to the court is made by a beneficiary but is, in substance although not in form, an adverse claim made in hostile litigation. In such a case, said the judge, the rule applicable to hostile litigation should be applied and the unsuccessful party ordered to pay the costs.

……

58. There is, moreover, a further principle regarding litigation to resolve questions arising in the administration of a deceased’s estate that needs to be borne in mind. If it is the deceased who is responsible for the creation of the doubts that have necessitated an application to the court for the doubts to be resolved, it is the deceased’s estate on which the costs of the application should fall. The principle is a well known one: “where the difficulty is occasioned by the … conduct of the testator … the costs are costs of administration” ……

59. But these principles do not constitute rules. They provide a guide as to how, in probate or administration proceedings, judicial discretion regarding the costs of litigation should be exercised. The answer to that may depend not only on the principles referred to but also upon the particular circumstances in which the litigation has been commenced and prosecuted. ……” (Emphasis added)

8.  Mr Chan for Sum submits that costs of these proceedings should be paid by Shing personally to Sum, for the fact that Sum is the successful party in these proceedings and Shing’s unreasonable conduct.

(2)  Shing’s failure to provide the Supporting Documents to Sum was a failure in performing Shing’s duties as the executor of the Estate.[3]

(3)  Sum chose to discontinue these proceedings because after issuing the OS, Shing provided the Supporting Documents to Sum by an affirmation, and the outstanding matters were clarified by Shing’s solicitors on 11 April 2023. In substance, Sum is the successful party of these proceedings. The general rule of costs following the event should apply.

(4)  Before the commencement of these proceedings, Sum had requested Shing to produce the Supporting Documents by correspondence. Without any valid reasons, Shing did not accede to those requests. Shing’s conduct is unreasonable.

(5)  Shing’s unreasonable attitude is also evidenced by his conduct in HCMP 979/2020. In that case, the subject matter is the dispute between Sum and Shing concerning a partnership (“the Partnership”) in which Sum and Shing were partners. Shing refused to provide books and accounts and the supporting documents in relation to the Partnership to Sum, and hence Sum commenced HCMP 979/2020 against Shing. The Partnership was dissolved on 31 March 2021.

(6)  In the Costs Decision dated 24 May 2022 in HCMP 1150/2021, B Chu J criticised the dilatory attitude of Shing and said:

“27. D, being the executor, is under a duty to administer the Estate expeditiously, and now some 11 years after probate of the Will being granted to him, the Estate still has not been wound up. As observed by this Court, unless there are good reasons for such delay, dilatory action on the part of executor may place him at risk of being removed as the executor.”

(7)  While there is no evidence showing that Shing has any motive to try to obtain any seek any benefit for himself, his conduct in administering the Estate is unreasonable.

(8)  Overall, by reason of Shing’s unreasonable conduct, there should be a costs order that costs of these proceedings be paid by Shing personally to Sum. Those costs should not be borne by the Estate, for that would prejudice Sum’s interest, bearing in mind that Sum is a beneficiary of the Estate.

9.  Mr Pang for Shing submits that due to the fact that Shing was acting reasonably at all times and Sum’s unreasonable conduct, costs of these proceedings should be paid by Sum to Shing. Alternatively, there be no order as to costs, save that costs of these proceedings as from the date of Shing’s 1^st Offer (ie 17 March 2023), or from the date of Shing’s 2^nd Offer (ie 10 January 2025), be paid by Sum to Shing.

(1)  At all times, Shing was acting reasonably. In the correspondence, Sum always required Shing to give a reply within an unreasonably short period of time.

(2)  Shing never received the letter from Sum’s solicitors dated 13 December 2022. When Shing, by his letter dated 20 January 2023 to Sum’s solicitors, requested for a Chinese translation of the letter dated 13 December 2022, no such translation was provided to Shing.

(3)  These proceedings were unreasonably commenced by Sum, without trying to further explore to resolve the differences between the parties through further communication with a clearly responsive defendant.[4]

(4)  Sum’s rejection of Shing’s 1^st Offer and Shing’s 2^nd Offer is unreasonable, leading to further costs being incurred.

(5)  The raising of irrelevant issues, such as issues relating to the Partnership, unnecessarily increases the costs of these proceedings.

(6)  Shing has demonstrated his sincerity in performing his duties as the executor of the Estate. This should be taken into account.[5]

(7)  If there is any delay by Shing in producing the Supporting Documents, the delay would only be the period starting from Shing’s letter dated 20 January 2023.

(8)  It should also be noted that before the commencement of these proceedings, Sum was only requesting for the Supporting Documents. However, in the OS, Sum is asking something more, ie producing the Supporting Documents by an affirmation.

Discussion

10.  As said by Lord Scott of Foscote NPJ in Cheng Pui Yuen, to determine costs in administration proceedings is an exercise of judicial discretion, with reference to the principles and based upon the particular circumstances of the case before the court. Accordingly, each case would depend upon its own facts.

11.  In my view, subject to the matter in §16 below, costs of these proceedings should be paid by Shing personally to Sum.

12.  As to costs up to the clarification provided by Shing’s solicitors on 11 April 2023, those costs should be paid by Shing personally to Sum.

(1)  In my view, this case is within the third category of the principles in the Re Buckton case. I am of the view that Shing had defaulted in discharging his duties as the executor of the Estate by failing to provide the Supporting Documents to Sum upon request. Even approaching the matter on the basis that Shing did not receive Sum’s solicitors’ letter dated 13 December 2022, the following facts are indisputable:

(a)  Sum’s solicitors first raised the request for the Supporting Documents in their letter dated 5 December 2022. There is no allegation from Shing that his solicitors did not receive this letter, nor his solicitors did not relate the contents of this letter to him.

(b)  Shing did receive Sum’s solicitors’ letter dated 13 January 2023, which enclosed a Chinese translation of Sum’s solicitors’ letter dated 3 January 2023. In that Chinese translation, the request for the Supporting Documents was clearly set out.

(c)  Sum made a request for the Supporting Documents on 5 December 2022, and repeated the request on 13 January 2023 (assuming that Shing did not receive Sum’s solicitors’ letter dated 13 December 2022, and Shing only came to be aware of the contents of Sum’s solicitors’ letter dated 3 January 2023 by reading the Chinese translation of the same enclosed in Sum’s solicitor’s letter dated 13 January 2023). From the time when P made the request for the Supporting Documents (ie 5 December 2022) to the time when P issued the OS and commenced these proceedings (ie 21 February 2023), around 2½ months lapsed. During these 2½ months, Shing did not provide the Supporting Documents to Sum, nor requested for time to prepare the Supporting Documents. There is no explanation from Shing as to why he did not do so in these 2½ months. There is also no suggestion from Shing that a period of 2½ months would not be sufficient for him to prepare the Supporting Documents with reasonable diligence.

(d)  After making the request for the Supporting Documents on 5 December 2022, Sum repeatedly reiterated the request and waited for 2½ months before issuing the OS herein. In the circumstances, it cannot be said that Sum had not tried to resolve the matter through communication, and it cannot be said that Sum issued the OS with unreasonable haste.

(e)  With respect, I have difficulties in understanding Mr Pang’s submission that the period of delay in producing the Supporting Documents should only start to run from 20 January 2023, and in any event I do not accept this submission. In my view, this point is unmeritorious and without any reasonable basis.

(2)  In the circumstances, it cannot be said that Sum was acting unreasonably by commencing these proceedings on 21 February 2023.

(3)  The Supporting Documents were provided to Shing for the first time on 17 March 2023. By Shing 1^st Aff filed on 22 March 2023, Shing confirmed that all the Supporting Documents had been provided to Sum. However, some matters would still need to be clarified, and the clarification was only provided on 11 April 2023. Accordingly, it is plain that costs of these proceedings up to 11 April 2023 should be paid by Shing personally to Sum.

(4)  It is true that in the OS, Sum is seeking an order requiring Shing to produce the Supporting Documents by an affirmation. However, had the Supporting Documents been produced by Shing prior to the commencement of the proceedings herein, Sum would have had no need to issue these proceedings. The fact remains that these proceedings are caused by the inexcusable delay by Shing in producing the Supporting Documents to Sum.

(5)  The application before me is not an application for removing Shing from the office of the executor of the Estate. With respect, Mr Pang’s submission based upon Chang Wing Ka John is not relevant. Shing’s motive and/or intention is also not relevant. The fact remains that by failing to produce the Supporting Documents in the circumstances as set out in the above, Shing has failed to discharge his duties as the executor of the Estate.

13.  After 11 April 2023 and before Sum issuing the Summons on 3 January 2025, neither party has taken any step in these proceedings. Accordingly, after 11 April 2023, costs incurred by the parties in these proceedings would be costs of the Summons.

14.  For the reasons as set out in the above, I am of the view that substantial costs of these proceedings should be awarded to Sum and against Shing personally. Shing’s claim that he should have the costs of these proceedings is rejected. Since Sum is the successful party in the contention for costs, costs of the Summons should also be paid by Shing personally to Sum.

15.  While Sum is entitled to have substantial costs of these proceedings, his refusal to accept Shing’s 1^st Offer and Shing’s 2^nd Offer, ie discontinuing these proceedings with no order as to costs, is not an unreasonable refusal.

16.  All the above is subject to one matter. I agree with Mr Pang that the issues in the dispute relating to the Partnership are not relevant for the purpose of these proceedings. The administration of the Estate is not a matter in that dispute at all. The raising of irrelevant issues in affirmations and in submissions has unnecessarily increase the costs of these proceedings. In the circumstances, I am of the view that Sum should only be able to have 80% of the costs of these proceedings (including costs of the Summons and costs reserved, if any).

17.  Without prejudice to the above, there is a separate matter raised in the hearing before me, ie costs incurred by Shing in preparing the Supporting Documents and providing the same to Sum. In my view, as a matter of principle, being an executor of the Estate, Shing should be entitled to recover these costs from the Estate on trustee basis. With no objection from Mr Chan, I am prepared to make an order to take care of this.

Disposition

18.  I grant leave to Sum to discontinue these proceedings.

19.  I make the following costs orders:

(1)  80% of costs of these proceedings (including costs of the Summons and costs reserved, if any) be paid by Shing personally to Sum on party and party basis. Those costs be summarily assessed by me on paper without an oral hearing. There be leave to Sum to lodge a bill of costs (not more than 3 pages) with the Court and serve the same on Shing within 7 days, and leave to Shing to lodge a list of objections to Sum’s bill (not more than 3 pages) with the Court and serve the same on Sum within 7 days thereafter.[6]

(2)  Costs incurred by Shing in preparing the Supporting Documents and in providing the same to Sum be paid by the Estate to Shing on trustee basis. Those costs be summarily assessed by me on paper without an oral hearing. There be leave to Shing to lodge a bill of costs (not more than 2 pages) with the Court and serve the same on Sum within 7 days, and leave to Sum to lodge a list of objections to Shing’s bill (not more than 2 pages) with the Court and serve the same on Shing within 7 days thereafter. Since the Estate has already been disturbed and 2/3 of the assets in the Estate have been given to Sum, Sum would have to pay 2/3 of the sum assessed by this Court to Shing.

20.  Lastly, I thank counsel Mr Chan and Mr Pang for the assistance provided to the Court.