CHEUNG WAI KIE EDWIN AND ANOTHER v. CHEUNG WAI SUM AND ANOTHER

HCA 20/2024

[2026] HKCFI 1265

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 20 OF 2024

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BETWEEN

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DECISION

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Introduction

1.  This court handed down a decision dated 11 August 2025 to dispose of a few applications (“the Previous Decision”). The parties now come back to ask for further determination of certain costs issues reserved therein.

2.  The background facts relating to the present dispute are set out in the Previous Decision and no repetition will be made here. In this Decision, I shall adopt the abbreviations used in the Previous Decision.

3.  To recap, in §§104 and 105 of the Previous Decision, I dismissed the SOS (striking out summons) and directed Edwin and Hing (the then plaintiffs) do on or before 12 September 2025 take out a summons pursuant to O.15 r.15 for their application for a representation order to be supported by an affirmation and a summons for leave to amend the SOC. I further made an order nisi that costs of and occasioned by the SOS and the Amendment of Writ Summons be reserved pending the determination of the expected applications for a representation order and for leave to amend the SOC.

4.  Eventually, pursuant to my direction, on 12 September 2025, Edwin and Hing took out a summons for a representation order (“the Representation Summons”) and a summons for amendment of the Statement of Claim (“The Amendment Summons”).

5.  By two consent summonses, the parties agreed to dispose of these summonses by consent. This court made the two consent orders both dated 17 October 2025 in terms of the two consent summonses (“the Consent Orders”) accordingly. The relevant terms of the Consent Orders are as follows:

(1) The plaintiffs be appointed to represent the Estate in HCA 20/2024;

(2) Leave be granted to the plaintiffs to amend the Statement of Claim as per the 4^th Draft Amended Statement of Claim annexed to the Amendment Summons;

(3) Leave be granted to amend the Writ of Summons with the names of the plaintiff as:

(i) “CHEUNG WAI KIE EDWIN (張偉基) for himself, on behalf of the estate of Mr. CHEUNG Chiu Moon, late; and on behalf of Shing On Realty Company Limited and Gold Pool (HK) Limited as the 1^st Plaintiff.

(ii) “CHEUNG LAI HING (張麗卿) for herself and on behalf of the estate of Mr. CHEUNG Chiu Moon, late” as the 2^nd Plaintiff.

(4) The joinder of Edwin for himself and on behalf of Shing On and Gold Pool; Shing On as the 3^rd defendant and Gold Pool as the 4^th defendant.

(5) The liability and quantum of the costs of, occasioned by and/or incidental to (1) the SOS, (2) the Amendment of Writ Summons, (3) the Representation Summons and (4) the Amendment Summons be determined on papers.

6.  The parties have lodged their respective written submissions for the determination of the aforesaid costs issues of the 4 Summonses.

7.  Ms Wong, together with Ms Lam, for the plaintiffs, indicates that the plaintiffs have agreed by their letter dated 13 October 2025 to bear the costs of and occasioned by the Amendment of Writ Summons and the Amendment Summons. Both the Amended Statement of Claim and the Amended Writ of Summons were filed on 31 October 2025.

8.  Therefore, only the SOS and the Representation Summons call for my determination.

Costs of the SOS

9.  This court dismissed the SOS. The defendants principally relied on the lack of locus standi ground and the limitation ground. This court was not impressed with the latter ground.

10.  For the former ground, this court held that whilst Edwin and Hing did not have the locus standi to represent the Estate to bring the action against the defendants, I opined that this defect was curable by a representation order which might be granted on a proper application made under O.15 r.15 and appropriate amendments.

11.  Ms Wong submits that the turning point was 9 January 2025 when the plaintiffs filed the 1^st Amendment Summons dated 8 January 2025 to cure the locus defect. She submits that the defendants should be put on notice that the lack of locus standi issue could be resolved and they should then abandon their striking out application.

12.  Hence, Ms Wong argues that Edwin and Hing should pay costs to the defendants up to 9 January 2025 only. Thereafter, their costs should be borne by the defendants due to their unreasonable persistence in the SOS.

13.  Ms Wong refers to Chan WS v CC Bank [2022] 3 HKLRD 520 and submits that a defendant could claim costs of his striking out application only up to the point that it was no longer reasonable to continue pursuing his application.

14.  I am not persuaded by Ms Wong’s submissions.

15.  As pointed out by Mr Tsang, for the defendants, the defendants already raised the lack of locus issue in their letter dated 16 February 2024. At the very first call-over hearing of the SOS on 4 October 2024, the plaintiffs accepted that they were aware that the defendants challenged their locus and indicated to Master Ho that they would amend the SOC. That was the reason why another call-over hearing was fixed for 1 November 2024. The 2^nd call-over hearing was further adjourned upon the Undertaking (that an application for leave to amend the SOC would be taken out by 4 December 2024).

16.  The Sanction was imposed at the 3^rd call-over hearing on 13 December 2024. The effect of the Sanction is clear. Edwin and Hing were debarred from seeking to amend the SOC in response to the SOS.

17.  It is noteworthy that by Master Ho’s 3^rd Order, the 1^st Amendment Summons was dismissed on 13 January 2025.

18.  The upshot is that when the substantive hearing of the SOS took place on 9 May 2025, Edwin and Hing were not allowed to apply for amending the SOC to remedy the locus standi problem and their previous attempt to represent the Estate was rejected by Master Ho.

19.  Against this background, I am of the view that it was reasonable for the defendants to pursue the SOS when Edwin and Hing appeared to be unable to remedy the lack of locus standi problem in light of the Sanction and the dismissal of the 1^st Amendment Summons.

20.  This court directed Edwin and Hing to make a proper application for a representation order after dismissing the SOS in the Previous Decision. They were given one last chance to resolve the locus issue. This does not mean that the defendants did not have sufficient ground to continue to proceed with the SOS on 9 May 2025.

21.  For completeness, the Chan WS case does not assist Edwin and Hing. There, the two applicants were husband and wife and they applied to set aside the statutory demands respectively served on them by the respondent. The respondent cast doubt on the authority of the husband to apply to set aside the statutory demand served on the wife. The wife then filed an affirmation to confirm the authority of the husband. The issue of lack of authority was then resolved. On this basis, Au JA found that after the filing of the confirmatory affirmation of the wife, it was unreasonable for the respondent to pursue the striking out application.

22.  Mr Tsang refers to Liquidation Committee of Foshan Honda Development Ltd v East Legend Investment Limited [2009] 1 HKLRD 169 where Cheung JA, at §18, pointed out that once it is clear that the action was improperly constituted it must be brought to an end either by way of dismissal, striking out or stay.

23.  In the present case, Edwin and Hing were inexplicably unable to resolve the lack of locus issue before the imposition of the Sanction though they had ample time and chances to do so. Their failure to do so is inexcusable and in breach of the Undertaking. The Sanction being in force, the defendants could not be faulted for proceeding with their striking out application on 9 May 2025.

24.  In the circumstances, despite the dismissal of the SOS, I opine that Edwin and Hing should pay the defendants their costs of and incidental to the SOS.

The Representation Summons

25.  Ms Wong submits that the application of Edwin and Hing for a representation order was granted and so it was successful. Costs should then follow the event.

26.  Ms Wong draws my attention to the decision of Master J Wong in Tsang Pei Ying Grace (曾佩盈) (minor) and Tsang Chi Yeung Henry (曾子揚) (minor) by their mother and next friend Xu Hong (徐 泓) v Kan Sau Lan (簡秀蘭) (unreported, HCAP 1/2007, 2.11.2007). There, the learned master granted a representation order under O.15 r.15 and leave to amend the Writ of Summons. He went on to say that costs should follow the event and the defendant was ordered to bear the costs of the application.

27.  Ms Wong then submits that costs should also follow the event in the present case and the plaintiffs are entitled to costs by reason of the grant of the representation order.

28.  I cannot accept her submissions. Edwin and Hing could only bring the present action with a representation order under O.15 r.15, which could only be granted upon their application to the court. In other words, inevitably they had to take the necessary step to issue the representation summons whatever the defendants’ position was.

29.  In the Tsang Pei Ying Grace case, the defendant opposed the application but in vain. It was on this basis that the learned master adopted the general principle of costs following the event. Here, the defendants very sensibly agreed to the grant of the representation order sought by the plaintiffs. There is no reason why the defendants have to pay the costs of the plaintiffs.

30.  Since the representation order is indispensable for the plaintiffs to pursue the claims against the defendants, I am of the view that costs of the Representation Summons should be in the cause of the action.

Quantum of costs

31.  The defendants have provided a Statement of Costs which covers the costs of the SOS and the Representation Summons. It does not cover their costs of the Amendment of Writ Summons and the Amendment Summons which the plaintiffs agree to pay.

32.  In carrying out the summary assessment of the defendants’ costs of the SOS, the Amendment of Writ Summons and the Amendment Summons, I shall take a broad-bush approach and refrain from embarking on a mini-taxation.

33.  I should make it clear that I do not agree that the defendants are entitled to a certificate for two counsel and indemnity costs. The SOS is straightforward and the locus issue is very obvious. The conduct of the plaintiffs will be taken into account in the taxation of costs of their other applications and does not appear to me to have a significant bearing impact on the SOS.

34.  I would allow HK$150,000 for counsel fee covering the SOS Summons and the present dispute over costs. I would allow HK$170,000 for all the charges and disbursements of the defendants’ solicitors. The total amount of costs recoverable from the plaintiffs is HK$320,000.

Conclusion and orders

35.  For the reasons given, I conclude that the plaintiffs should pay the defendants their costs of and occasioned by the SOS, the Amendment of Writ Summons, the Amendment Summons and costs of this application summarily assessed at HK$320,000. I so order.

36.  I further order that the costs of the Representation Summons be in the cause.

37.  I note that in the plaintiffs’ Statement of Costs, they ask for a total sum of HK$1,097,148. This amount is wholly unreasonable and plainly excessive. It actually epitomizes how the plaintiffs have conducted this litigation thus far. They must seriously review their approach with a view to a proper and just determination of their substantive rights in these proceedings.