WONG CHEONG MING v. WONG CHAK MING

HCMP 2189/2020

[2023] HKCFI 2365

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2189 OF 2020

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DECISION ON COSTS

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1.  The Deceased died in June 2016 leaving a will (the “Will”) naming the plaintiff and the defendant as executors.

2.  Since about December 2016, the plaintiff and the defendant had been appointed as the two co-executors of the Estate of the Deceased (the “Estate”).

3.  As per the Will, there are 5 beneficiaries to the Estate (collectively, the “Five Beneficiaries”), namely:

(1)  the plaintiff;

(2)  the defendant;

(3)  Mei Lee (“Mei Lee”);

(4)  Madam Li (“Madam Li”); and

(5)  Ka Ming (“Ka Ming”).

4.  The Deceased had two marriages and a total of 4 children.

(1)  The plaintiff, Mei Lee and the defendant were the 3 children born out of the Deceased’s first marriage with his first wife, who died in about 1980;

(2)  Ka Ming was the only son born out of the Deceased’s second marriage with Madam Li.

5.  The Estate consisted of mainly the following assets:

(1)  4/5 shares in a shop on Castle Peak Road, Kowloon, Hong Kong (the “Shop”);

(2)  a residential flat in Tsuen Wan, New Territories (“Cheong Tai Property”), which has been and is still being occupied by Ka Ming and Madam Li as their residence;

(3)  2 houses in Luchuan County, Guangxi Province, the PRC, which has been let out to others for rental income.

6.  By the Will, all the assets in the Estate (save the Cheong Tai Property[1]) are given to the Five Beneficiaries in equal shares.

7.  The 4/5 shares in the Shop, being the most valuable asset of the Estate, has an additional redevelopment value, such that:

(1)  The defendant had received an offer to purchase the Shop at HK$68 million in 2018.

(2)  The developer has offered about HK$44.3 million for the 4/5 shares in the Shop.

8.  It was the plaintiff’s case that the plaintiff and the defendant, in their joint administration of the Estate, had faced serious difficulties, problems, and disagreements.

9.  As a result, there had been little progress in respect of the administration of the Estate since grant of probate.

10.  Accordingly, with the view to enabling due and proper administration of the Estate without further delay, the plaintiff took out the Originating Summons herein (“OS”) in November 2020.

11.  By the OS, the plaintiff, as one of the 2 co-executors of the Estate, applied under section 33(3) of the Probate and Administration Ordinance, Cap 10 (“PAO”) for inter alia:

(1)  an order that the defendant, being the other co-executor of the Estate, be removed from being the co-executor of the Estate; or

(2)  alternatively, if the court deems appropriate, an order that both the defendant and the plaintiff be removed as co-executors of the Estate with an independent professional administrator (“IPA”) be appointed in their places.

12.  Subsequently, the plaintiff and the defendant, as well as all the Beneficiaries, agreed that:

(1)  both the plaintiff and the defendant be removed as co-executors of the Estate; and

(2)  Mr Wong Tak Shing (“WTS”) of Messrs Wong Shum & Co, who was nominated by the defendant, be appointed as an IPA of the Estate.

13.  Then, the plaintiff and the defendant together with all the Beneficiaries signed the Consent of Appointment of Administrator (the “Consent”) confirming their respective consents to appoint WTS as the IPA of the Estate.

14.  With the intent to fully settle the OS save on the issue of costs, the parties signed the Consent Summons on 11 October 2021 (“Consent Summons”).

15.  On 15 October 2021, this court granted the Consent Order pursuant to the Consent Summons.

16.  The Consent Order expressly provides inter alia that:

(1)  Both the plaintiff and the defendant be removed as co-executors of the Estate;

(2)  Leave be granted for WTS to be appointed as the IPA of the Estate in place of the plaintiff and the defendant under section 33(3) of the PAO “subject to IPA’s service terms and conditions to be accepted by the parties”;

(3)  Costs of these proceedings (being the only remaining issue of these proceedings) be dealt with on paper submissions.

17.  This is my determination on the question of costs.

18.  The relevant legal principles on costs have been summarised in Perrine Chamonix Ltd v Star League Ltd, HCA 1139/2017 (unrep, 13 September 2017) (“Perrine”) at §§24-26. In particular:

(1)  First, when a party has achieved substantially what he or she sought in the action or application, costs should be awarded to him or her. This is an application of the principle that normally costs should follow the event (§24).

(2)  Second, the court does not adopt a mechanical approach, and instead looks into the substance and the merits of an application. If, but for a plaintiff’s or an applicant’s application, he or she would not have obtained the relief he or she seeks in a writ of summons or a summons, then he or she is in effect the substantive winner of the case (§25).

(3)  Third, the fact that a defendant consents to the claims by a plaintiff or an applicant which renders it unnecessary for the plaintiff or the applicant to continue the action or summons should not be a reason for denying the plaintiff or the applicant his or her costs (§25).

19.  In the present case, the Perrine principles clearly apply: the plaintiff has achieved substantially what he sought in the OS (albeit as an alternative relief); he would not have obtained the relief but for his application; and the fact that the defendant consented to the appointment of the IPA is no reason for denying the plaintiff his costs.

20.  The defendant further argues that the plaintiff should not have continued with the present proceedings upon having received the defendant’s “without prejudice save as to costs” offer for settlement on 24 December 2020.

21.  In this regard, I agree with the plaintiff’s submissions. Where an IPA is to be appointed, undoubtedly there would be an incurrence of substantial costs by the Estate upon appointment of an IPA.

22.  The plaintiff, being an executor (trustee) of the Estate having a duty to act for the best interest of the Estate and the beneficiaries thereof, should act with great care before accepting the defendant’s proposal, such that the plaintiff should not accept it unless he has ensured with sufficient reasons that there is no other better alternative than the appointment of an IPA.

23.  In the circumstances, I accept that the plaintiff has all along acted reasonably in withholding his agreement to appoint an IPA until all parties had filed their evidence and the plaintiff had obtained a counsel’s opinion on the matter.

24.  For the reasons set out above, I make the following order on costs:

(1)  The defendant do personally pay the plaintiff’s costs of and incidental to the OS, including inter alia the plaintiff’s costs of the administration of the Estate and of the hearing on 15 October 2021, with certificate for counsel, to be taxed if not agreed;

(2)  The plaintiff’s own costs of and incidental to the OS, including inter alia the plaintiff’s costs of the administration of the Estate and of the hearing on 15 October 2021, shall be indemnified by the Estate, to such extent that they are not recovered from the defendant; and

(3)  The plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations.