KISHIN SAMTANI, THE ADMINISTRATOR OF THE ESTATE OF NARIAN SAMTANI, DECEASED v. CHANDERSEN TIKAMDAS SAMTANI

HCA 496/2011

[2025] HKCFI 4526

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 496 OF 2011

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(by the Carry On Order of Master M Wong dated 31 August 2018)

________________________

________________________

DECISION

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A.  INTRODUCTION

1.  By a Judgment handed down on 18 March 2025 (“the Judgment”)[1], this Court:

(1)  dismissed the plaintiff’s claims (including his misappropriation claim);

(2)  ordered the plaintiff to give an account of profits which Narian had made in Regal Top;

(3)  ordered the plaintiff to pay the defendant the sum found due following such account;

(4)  ordered the plaintiff to pay the defendant nominal damages in the sum of $1,000 for Narian’s occupation of the Evelyn Towers Flat.

2.  In the Judgment, this Court also made an order nisi that the plaintiff shall bear the costs of the defendant, with certificate for two counsel, to be taxed if not agreed (“the Costs Order Nisi”).

3.  On 28 April 2025, the plaintiff applied to vary the Costs Order Nisi[2]. By a letter issued by his solicitors dated 11 July 2025 (“the plaintiff’s Variation Application”), he clarified that the variations that he sought are as follows:

(1)  Subject to sub-paragraph (a)  or (b)  below, the plaintiff do pay the defendant’s costs of the action, to be taxed if not agreed:-

(a)  The defendant do pay the plaintiff all costs (including all costs previously reserved)  in relation to the plaintiff’s claim of misappropriation, up to and including the date of the defendant’s Re-Re-Amended Defence and Counterclaim, to be taxed if not agreed; or alternatively,

(b)  The defendant be disallowed costs of this action (including all costs previously reserved)  in relation to the plaintiff’s claim of misappropriation, up to and including the date of the defendant’s Re-Re-Amended Defence and Counterclaim, to be taxed if not agreed.

(2)  The plaintiff’s costs of the defendant’s dismissed New Witness Statement Summons filed on 16 November 2023 be taxed on indemnity basis; and

(3)  Certificate for two counsel for the hearing of the trial.

4.  By a summons filed on 30 April 2025 (“the defendant’s Variation Summons”), the defendant also applied to vary the Costs Order Nisi.  The proposed terms are as follows:

(1)  The Estate of Narian Samtani, Deceased and Kishin Samtani personally do jointly and severally pay the defendant the costs of this action (including the costs of the trial and all the reserved costs (if any))  to be taxed if not agreed on indemnity basis with certificate for two counsel;

(2)  Alternatively, Kishin Samtani (in his personal capacity)  be joined as a party to this action for the purposes of costs only;

(3)  There be an Order that Kishin Samtani (in his personal capacity)  do pay (jointly and severally with the Estate of Narian Samtani, Deceased)  the defendant the costs of this action (including the costs of the trial and all the reserved costs (if any))  to be taxed if not agreed on indemnity basis with certificate for two counsel.

B.  THE PLAINTIFF’S VARIATION APPLICATION

5.  In gist, the plaintiff’s application consists of 2 limbs:

(1)  The defendant shall bear the plaintiff’s costs of the claim of misappropriation up to the time of the defendant’s filing of his Re-Re-Amended Defence and Counterclaim, or alternatively, there shall be no order as to such costs;

(2)  The plaintiff’s costs of the New Witness Statement Summons be taxed on indemnity basis.

B1.  The plaintiff’s costs of the claim of misappropriation

6.  The plaintiff’s submissions on the costs of the claim of misappropriation may be summarised as follows:

(1)  This Court has found that the credit notes served as compelling evidence of the existence of the CESCO Arrangement.  It is implied in such a finding that the Court accepted that those credit notes must have existed before this action was commenced;

(2)  However, despite the defendant’s undertakings given to this Court on 20 May 2011 and 16 September 2011, he failed to disclose the credit notes;

(3)  The defendant even gave the impression by virtue of his 7^th Affirmation filed on 12 June 2012 that the credit notes were no longer in existence;

(4)  Although the credit notes would have provided the defendant with a complete defence to the plaintiff’s claim of misappropriation, the defendant only produced them by annexing the same to his Re-Re-Amended Defence and Counterclaim filed on 28 October 2019;

(5)  If the defendant had disclosed those credit notes earlier, considerable time and costs would have been saved in the pursuit of such documents let alone the pursuit of such a cause of action.

(6)  Hence, the Court should vary the Costs Order Nisi by taking into account the defendant’s conduct aforementioned pursuant to Order 62 rule 5(2)(d)  of the RHC.

7.  When considering the plaintiff’s application in this regard, it is important to bear in mind this Court’s finding at [164] of the Judgment that:

“[…] it is more likely than not that Narian knew about the CESCO Arrangement. Indeed, it is the evidence of Michelle (which I accept)  that Narian knew about it at all material times […]”

8.  I accept the defendant’s argument that it follows from the above finding that the plaintiff’s misappropriation claim should not have been brought in the first place.  I do not accept the argument of the plaintiff’s counsel that even if Narian knew the existence of the CESCO Arrangement, it does not mean that the funds had been handled accordingly. This is because this was not the plaintiff’s case.  It has all along been the plaintiff’s case that the CESCO Arrangement had never existed[3].

9.  In an attempt to justify the carrying-on with the making of this claim by Kishin, the plaintiff further argues that even if Narian had had knowledge of the CESCO Arrangement, it does not mean that Kishin would have the same knowledge, as the latter had left Kay Tee in 2006. 

10.  This argument is futile, because it is contrary to Kishin’s own evidence – in his supplemental witness statement, he categorically denied that the CESCO had ever existed[4].

11.  In such circumstances, the proposed order that the defendant shall bear the plaintiff’s costs on his claim of misappropriation cannot be a fair one and I have no hesitation in rejecting it.

12.  In relation to the plaintiff’s submission that his time and costs could have been saved if the defendant had disclosed the credit notes earlier pursuant to his repeated requests, the defendant argued that:

“P’s contention is wholly unreal and artificial in that even after the Kay Tee Credit Notes were produced (which were in fact produced in 2011 or 2012), P continued to pursue the misappropriation claim until the end of the trial and contended without evidence that they were fabricated documents, which was rightly rejected by the Court. The contention that P would not have pursued the misappropriation claim if he had sight of the Kay Tee Credit Notes earlier flies in the face of P’s conduct of the action after the production of the Kay Tee Credit Notes and cannot be more unconvincing.”

13.  I agree with the defendant.

14.  Be that as it may, if the defendant has indeed failed in his disclosure obligation despite his undertakings given to the Court as alleged by the plaintiff, then this is something that the Court should take into account when considering whether to grant the entirety of the costs of the misappropriation claim to the defendant (for example, whether the Court should disallow the defendant’s costs incurred before he filed his Re-Re-Amended Defence and Counterclaim (with which a large number of credit notes were annexed)).

15.  However, as demonstrated by the defendant’s counsel, while the plaintiff had indeed asked the defendant for disclosure of “credit notes” since the early stage of these proceedings, such credit notes were in fact different in nature from those which the defendant annexed to the Re-Re-Amended Defence and Counterclaim:  The credit notes which the plaintiff had always asked for were issued by the bank(s), whereas the credit notes annexed to the defendant’s pleadings were Kay Tee’s internal documents.  The fact that the credits notes which had been asked for by the plaintiff were issued by the bank(s)  can be seen from the following references[5]:

(1)  The first request for credit notes was made by Narian on 30 March 2011, by which he asked the defendant for “Commission Accounts – each credit note with attached invoice”.  In answer to the enquiries made by the defendant’s solicitors by letter dated 14 April 2011 as to the meaning of “credit note”, the plaintiff’s solicitors clarified by letter dated 19 April 2011 that:

“ ‘Bank credit notes’ refer to funds received from customers in the form of Telegraphic Transfers (TT’s)  or export documents discounted from banks; whereas ‘bank debit notes’ refer to bank charges or outgoing TT’s.”

(2)  By letter dated 11 July 2011, the plaintiff’s solicitors wrote:

“We refer to […] your clients’ Undertaking dated 20^th May 2011 and your clients’ 2^nd Affirmation dated 24^th June 2011.

Notwithstanding all the above, we are instructed by our client that your client has still failed to produce vitally important accounting documentation.  We refer to credit advices and inward remittance advices from the partnerships’ banks […]”

(emphasis added)

(3)  By another letter dated 15 August 2011, the plaintiff’s solicitors further stated:

“Paragraph 2 of your letter states that ‘our client has never represented to your client that the documents referred in paragraph 2 of your said letter do not exist. What our client said is that he has already provided to your client all the documents in his possession.’ Paragraph 2 of our letter refers to ‘credit advices and inward remittance advices from the partnerships’ banks and collection orders and letters of instructions to said Bank ......’ (collectively referred to as ‘the Requested Outstanding Documents’).

Given you above answer, it is still unclear the whereabouts of the Requested Outstanding Documents. On the one hand, you state that your client never said the Requested Outstanding Documents do not exist. On the other hand, our client still could not find the Requested Outstanding Documents during the inspection carried out on various dates. So where are the Requested Outstanding Documents? The absence of a satisfactory answer necessitates the injunction proceedings to continue as the record of accounts provided by your client is still incomplete.

We recall that the Undertaking given by your client during the hearing before Suffiad J. on 20^th May 2011 expressly refers to the following :-

‘....... to allow access to, inspection and copying of the partnership books and accounts of Kay Tee Corporation and Kishoo Brothers from 2004 to 2010 within 7 days from the date hereof, such books and accounts to include bank statements, credit/debit notes, ledgeres, cheque books, purchase orders, invoices, receipts, commission statements, remittance advices/instructions, full sets of export documents, including collection orders, bills of exchange, bills of lading, packing lists, insurance policies on goods and all other business records.’ (underlined and bold, emphasis added)  Your client no doubt had in mind the ability to produce the same, otherwise he simply would not have agreed to adopt the above underlined wordings when giving the Undertaking.

To facilitate your instruction taking with your client, we enclose samples of inward and outward remittance advices for the two banks (HSBC and Standard Chartered)  where the partnership business Kay Tee Corporation had accounts. You will note that all the enclosed documents were addressed to Kay Tee Corporation. Your client being the one in financial control of the business should have received these documents.

[…]”

The samples attached to the said letter were all issued by Kay Tee’s banks;

(4)  While the plaintiff took out a summons on 11 May 2011 (“the Inspection Summons”)  and asked for, inter alia, an order that the defendant do deliver up to the plaintiff or allow the plaintiff access to certain documents including “credit/debit notes”, in paragraph 40 of Narian’s 3^rd Affirmation which was filed in support thereof on 5 August 2011, it was stated that:

“There are a number of categories of documents which I expected to see but which are missing from the current record of accounts provided by the Defendant which include:-

a)  credit advices from the partnership’s banks;

b)  inward remittance advices from the partnership’s banks;

c)  collection orders to the partnership’s banks; and

d)  letters of instructions to the partnership’s banks

These are documents that are issued by or to banks in the normal course of banking business which the Defendant has no reason not to have available for my inspection.”

(5)  In the 4^th Affirmation of Narian filed on 7 October 2011 in further support of the Inspection Summons, he stated at paragraph 27 that:

“[…] I have collected most of the documents for 7 years, except from the year January / February and March 2011. These documents are still in the office premises. I have not collected them as the document sets are not complete for each of the following documents:

a)  credit advices from the partnership’s banks;

b)  inward remittance advices from the partnership’s banks;

c)  collection orders to the partnership’s banks; and

d)  letters of instructions to the partnership’s banks.

I have told them repeatedly asked the Defendant to produce the complete set but to no avail.

(6)  In the 5^th Affirmation of Narian filed on 3 January 2012 in further support of the Inspection Summons, he stated that:

“4. At the hearing before the Honourable Mr Justice Suffiad on 20^th May 2011, the Defendant agreed to give an undertaking as per the draft approved by himself whereby he agreed to allow the Plaintiff’s access to, inspection and copying of the partnership books and accounts of Kay Tee Corporation and Kishoo Brothers from 2004 to 2010 and the phrase ‘books and accounts’ includes ‘credit/debit notes…commission statements, remittance advices / instructions...’ (hereinafter referred to as ‘the Outstanding Documents’). The Outstanding Documents were not found during my various inspections arranged by the Defendant.

5.   At the hearing before the Honourable Deputy Judge L.Chan on 16^th September 2011, the Defendant repeated the same undertaking covering the Outstanding Documents. In particular, the Defendant was specifically ordered to produce to the Plaintiff copies of the Outstanding Documents or alternatively, file and serve an affidavit explaining the reason for his inability to produce them.[…]

[…]

10. While waiting for the Defendant’s provision of the Outstanding Documents, I in parallel made enquiry with the Standard Chartered Bank (‘SCB’)  with which Kay Tee Corporation had maintained an account for the partnership business. I was able to obtain from SCB various bank statements, ‘credit/debit notes’for my double-checking on various transfers of partnership monies for the past years (i.e. 2004 to 2010).

[…]

15. As far as the documentary record is concerned, the bank statements, ‘credit/debit notes’, ‘remittance advices / instructions’ and even the Defendant’s personal bank account which he had used to receive the partnership funds are all relevant to this action and should be disclosed. The aforesaid exhibit obtained from the SCB demonstrates that these relevant documents did exist and there was no reason why the Defendant could not produce the same for my inspection. The only possible inference to be drawn for the Defendant’s failure to do so is that he has either hidden the record somewhere or destroyed the same or deliberately failed to produce them. In any of these cases, he has to explain the reason for his failure to produce the Outstanding Documents. The Defendant’s current responses (as summarized in para. 7.1 to 7.3 above)  in his 4^th affirmation with regard to the Outstanding Documents simply cannot stand. The Defendant can never be considered as being cooperative in any sense in respecting my rights of inspection as he has up to today’s date still failed to give adequate response with regard to the Outstanding Documents, necessitating the maintenance of my injunction application.

[…]

18.   […] I was unable to prepare this affirmation much earlier as I just received the relevant aforesaid documents from SCB earlier this month. Had the Defendant been cooperative in allowing my access to the Outstanding Documents, this affirmation could have been avoided.”

It can be seen that the credit notes were part of the “Outstanding Documents” which could be obtained from the Standard Chartered Bank, and they are not the same as those credit notes which were attached to the Re-Re-Amended Defence and Counterclaim.  I have also highlighted the references to the undertakings given by the defendant to show that these bank documents were the subject matters in the undertakings which the plaintiff had been complaining about;

(7)  In the letter dated 10 January 2012 issued by the plaintiff’s solicitors to the defendant’s solicitors, it was stated that:

“In light of the parties’ previous exchange of affidavit evidence such as your client’s 4^th Affirmation and our client’s 5^th and 6^th Affirmations in which the reference to the following items (ii)  and (iii)  were made and the fact that equivalent items were missing from your client’s List of Documents, we write to ask for specific discovery under 0.24 r.7, RHC of the following items to be disclosed forthwith :-

[…]

(iii)  credit/debit notes with Standard Chartered Bank

[…]”

Again, the reference to “credit/debit notes” is made in relation to a bank;

(8)  In the 7^th Affirmation of Narian filed on 7 February 2012, he sought to clarify the meaning of what documents he wanted.  He stated:

“36. […] The Defendant in paragraph 36 of the Defendant’s 5^th Affirmation intentionally confused the Court as to the meaning of ‘Commission Credit Notes’ and ‘Commission Statements’. ‘Commission Credit Notes’ refer to the bank credit notes for export documents and inward remittances advices / transfers […]”

(emphasis added)

(9)  In their letter dated 22 March 2012, the plaintiff’s solicitors maintained that:

“[…] the following documents are of utmost relevance to the captioned proceedings (especially after the exchange of the last round of affidavit evidence in support of our client’s application by way of Summons dated 11^th May 2011)  and should be in your client’s possession, custody or power. As such, we write to reiterate our client’s request for specific discovery under 0.24 r.7, RHC of the following items:-

[…]

(iii)  credit/debit notes with Standard Chartered Bank to the customers mentioned in (ii)  above; and

[…]”

(emphasis added)

(10)  In the plaintiff’s summons for specific discovery filed on 23 April 2012 (“the Specific Discovery Summons”), the plaintiff sought specific discovery for, inter alia:

“[…]

(iii)  credit/debit notes in relation to the Samtani Family Businesses issued by Standard Chartered Bank to [CESCO], [E&M] and [Woodies];

(iv)  […] credit notes and debit notes in relation to the Samtani Family Businesses issued by Standard Chartered Bank and/or Hong Kong Bank to the customers and the Samtani Family Businesses; and

[…]”

16.  The 1^st and 2^nd undertakings were given by the defendant on 20 May 2011 and 16 September 2011 respectively.  They include a promise to allow the plaintiff’s inspection of “credit notes”.  However, from items (1)  – (4)  above, it is apparent that the “credit notes” were not the “Kay Tee credit notes” which were disclosed by the defendant in 2019.

17.  In reply to the defendant’s argument that what the plaintiff had always asked for was a different category of documents, the plaintiff submitted that:

“22. D seeks to confine the Plaintiff’s request for ‘credit notes and debit notes in relation to the Samtani Family Businesses issued by Standard Chartered Bank and/or Hong Kong Bank to the customers and the Samtani Family Businesses’ to documents issued solely by the banks. With respect, this interpretation is unduly narrow and conveniently overlooks the commercial realities of how businesses operate.

23. The phrase ‘in relation to the Samtani Family Businesses’ is broad and plainly encompasses all credit and debit notes generated in the course of business. This includes those issued by the Samtani Family Businesses themselves to their customers, suppliers, or internal accounts.

24. The grammatical structure of the request does not exclude the possibility that the Samtani Family Businesses were themselves issuers of such documents. On the contrary, it is entirely routine for businesses to issue credit notes to reflect adjustments, rebates, or commissions, and debit notes to record charges or corrections. To exclude these from the scope of discovery is to ignore both the language of the request and the practicalities of business accounting.

[…]

26.  In light of the above, it is submitted that P’s request must be interpreted purposively and commercially, to include credit and debit notes issued by the Samtani Family Businesses themselves.  Any narrower reading would be artificial, illogical, and contrary to the principles of fair and transparent disclosure.”

18.  Such arguments, with greatest respect, are hopeless.  First of all, it only focused on the request made pursuant to the Specific Discovery Summons and did not answer the unequivocal expressions made in various solicitors’ letters and affirmations.  Secondly, in my view, the plaintiff’s request cannot be clearer if one takes a look at the plaintiff’s Specific Discovery Summons.  It is trite that, as the applicant, the plaintiff has to identify the category of documents with precision.  When the documents requested were described as “issued by Standard Chartered Bank” and issued by Standard Chartered Bank and/or Hong Kong Bank, there is simply no room for the plaintiff to say that the interpretation of the request should be wider.

19.  The plaintiff’s reliance on the defendant’s 7^th Affirmation (filed on 12 June 2012)  to allege that the defendant had misled the Court is also misconceived.  In the plaintiff’s written submissions lodged on 28 April 2025, it was argued that:

“Parts of D’s 7^th Affirmation are cited for their importance:

(1)  Having gone through some his historical events, D says ‘All the above suggest that the Plaintiff is concerned with ‘credit / debit notes’ and ‘remittance advices / instructions’ in the Injunction Application… If that is the case, the Plaintiff should not be allowed to take advantage of the procedures and seek specific discovery of those documents which the Plaintiff has already conceded not to obtain in the Injunction Application.’

(2)  ‘For Category (iii)  (i.e. Credit / Debit notes), the usual practice of the partnership was as follows:-

When there was a deposit / withdrawal from the partnership account, there would be a deposit / withdrawal (credit/debit)  slips.

Once such deposit / withdrawal (credit / debit)  slips had been checked against the entry in the bank statement, this deposit / withdrawal (credit / debit)  slips would usually be discarded …’.

(3)  The implication was that the very credit/debit slips sought in the Specific Discovery application had been discarded.

(4)  The above called into question the bona fides of the 2 Undertakings and various Affirmations under oath.”

20.  The 7^th Affirmation of the defendant quoted above was dealing with “category (iii)” document in the Specific Discovery Summons, that is, “credit/debit notes with Standard Chartered Bank to the customers”[6]. They are not referring to the credit notes which were subsequently disclosed together with the Re-Re-Amended Defence and Counterclaim.  Further, the content of the said 7^th Affirmation is also very clear – the defendant was referring to the “credit/debit slips” which would be issued “when there was a deposit / withdrawal from the partnership account”.

21.  Insofar as the plaintiff relies on the defendant’s late discovery of credit notes to say that those evidence should have been disclosed earlier, I am of the view that it is an opportunist’s argument because:

(1)  While it is true that Kay Tee’s credit notes were only first disclosed when the Re-Re-Amended Defence and Counterclaim was filed in October 2019, it should be borne in mind that the CESCO Arrangement had already been set out in the defendant’s 5^th Affirmation filed on 19 January 2012.  With Narian’s knowledge of such an arrangement at all material times (as found by this Court), he should have re-considered the merits of his misappropriation claim once the defendant had expressly referred to it even though he had yet to amend his pleadings;

(2)  It should also be remembered that this action had been left dormant between 5 April 2013 (the date of death of Narian)  and 31 August 2018 (when a carry-on order was made by Master M Wong).  Hence, the prima facie long delay should be viewed in such light.

22.  In relation to the Specific Discovery Summons which was eventually dismissed by Master Hui on 7 September 2022 with “costs reserved”, the plaintiff submitted that he should be entitled to the costs thereof because:

“Had the above documents been disclosed by D, as was his duty, there would have been no need for P to go through the lengthy exercise of analysing other documents in order to ascertain the shortfalls in amounts received that ought to have been received by the Business.”[7]

23.  This argument collapsed upon the above finding that the “credit notes” which the plaintiff had been seeking for were of a different category to those which were attached to the defendant’s Re-Re-Amended Defence and Counterclaim.

24.  Since the purpose of the Specific Discovery Summons was to substantiate the plaintiff’s claim for misappropriation, now that this claim has been dismissed, there is no reason why the plaintiff should not bear the costs of that application, particularly when that discovery summons had been dismissed too.

B2.  Costs of the New Witness Statement Summons

25.  To recap, the plaintiff is now asking the Court to order that his costs of the New Witness Statement Summons be taxed on indemnity basis.

26.  The New Witness Statement Summons was taken out by the defendant on 16 November 2023, and returnable on the first day of the trial (27 November 2023), on which day this Court, having heard submissions from both sides, dismissed the application.  This Court also made an order at the hearing that the costs of the summons be borne by the defendant.

27.  In light of the aforesaid, the defendant made a preliminary point that it is now not open to the plaintiff to “vary” the costs order of the New Witness Statement Summons since such a costs order was not made on a nisi basis.

28.  On the other hand, it was submitted by Mr Lo for the plaintiff that:

“The costs order for the New Witness Statement Summons was neither made on a nisi nor absolute basis and should therefore, not be precluded from P’s Costs Application.”[8]

29.  With greatest respect, Mr Lo’s argument that the costs order was made neither on a nisi nor absolute basis is totally incomprehensible.

30.  I agree that, if the plaintiff would like to ask for indemnity costs in respect of the said summons, he should have done so there and then.  However, he did not do so, and as a result, a final order in that regard had been made.  The plaintiff’s application to “vary” the said costs order should therefore be dismissed on this ground alone.

31.  In any event, the plaintiff’s application is totally unmeritorious.

32.  This Court held in [51] of the Judgment that New Witness Statement Summons should be dismissed for the following reasons:

“(1)  Jason explained that the Original Advices were discovered in the cabinets in the 4/F Conwell Office. There was no evidence which showed that those documents were only placed thereat recently, and it might be inferred that they had always been put in those cabinets. In these circumstances, the first question must be why they were not discovered earlier, particularly when those documents had been specifically requested for by the plaintiff long time ago, and indeed, they were documents which the defendant was obliged to produce pursuant to a court order dated 16 September 2011. However, no such explanation had been given. In my view, there had been inexcusable delay on the part of the defendant, and the application could be dismissed on this ground alone.

(2)  In the event leave was granted for the defendant to rely on the Supplemental Witness Statement of Michelle, as a matter of fairness, time must be given for the plaintiff’s legal team to go through the new documents carefully, consider the interrelationship of the Original Advices with the many documents already included in the trial bundle and take further instructions from the plaintiff. Mr Hingorani informed this Court that he would need at least 3 days but preferably 4 days to complete the process, which must be reasonable in the circumstances. Although a total of 14 days had been reserved for this trial, it must be borne in mind that the long period of trial was fixed having taken into account the defendant’s need to take long breaks from time to time while he was giving evidence in Court. Hence, the loss of 4 days might therefore lead to the case being part-heard, which was highly undesirable, particularly when this case had been pending for 12 years.

(3)    It could not be disputed that the defendant’s very late application had disrupted the plaintiff’s preparation of the trial as attention, time and effort had been diverted to the opposition of the late application.  This in itself was a form of prejudice.  Even if this Court only granted a short adjournment (say, for a few days, so that the plaintiff could take further instructions on the Original Advices), that would mean that further prejudice would be caused to the plaintiff, which was very unfair to the plaintiff.”

33.  The plaintiff submitted that the costs of the New Witness Statement Summons should be taxed on indemnity basis for all the above reasons, together with the fact that it was a last-minute application with which was taken out less than 2 weeks before the trial, and which sought to adduce new documents.

34.  In Holinail H.K. Limited v Matthias Pou & Others [2025] HKCFI 1157, this Court referred to a number of authorities which set out the trite general principles on when it would be appropriate to make an indemnity costs order as follows:

“43. In Overseas Trust Bank Ltd v Coopers & Lybrand (a firm)  and Others [1991] 1 HKLR 177, Godfrey J (as his Lordship then was)  explained that:

‘[…] In order to justify a taxation on the indemnity basis, the successful party has to show, either that the case is one of a type already recognised in the practice of the court as warranting a taxation on that basis (such as, for example, the contempt cases to which I have already referred)  or that there is some feature in the case even more special or unusual than one which would justify a taxation on the common fund basis. A case in which the successful party has demonstrated that the proceedings were initiated or prosecuted by the unsuccessful party in a manner which constitutes that party’s proceedings an abuse of the process of the court might well be a candidate for an award of taxation of costs on an indemnity basis. A taxation of the successful party’s costs on an indemnity basis could properly be ordered, in my opinion, where the proceedings were scandalous or vexatious, or had been initiated or prosecuted maliciously, or for an ulterior motive, or in an oppressive manner. Any proceedings instituted or prosecuted in such circumstances as to constitute an affront to the court could properly be the subject of a direction for taxation of the successful party’s costs on an indemnity basis.’ (at 182G – 183C)

44.  In Choy Yee Chun (The representative of the estate of Chan Pui Yiu)  v Bond Star Development Ltd[1997] HKLRD 1327, Stock J (as his Lordship then was), having referred to the Judgment quoted above, stated:

‘It has since been held that, though there must still be shown special and unusual features, even the circumstances particularised by Godfrey J. are not to be taken as exhaustive of the conditions in which it might be appropriate to make such an award, and that the power to award taxation on an indemnity basis is not confined to cases which have been brought with an ulterior motive or for an improper purpose. (See Macmillan Inc. v. Bishopsgate Investment Trust Ltd., 10 December 1993 (unreported)  cited in Sung Foo Kee Ltd. v. Pak Lik Co. [1996]3 HKC 570).

In Sung Foo Kee Ltd a litigant had been repeatedly in contempt of court orders and the trial judge had found that the defendant had deployed defences which he termed “hocus pocus” and had used the legal process to prevent the plaintiff obtaining its just payment.  The Court of Appeal said that it would have awarded costs on an indemnity basis.  It remarked (at page 575)  that the circumstances in which an indemnity award might properly be made were not restricted to circumstances such as those described by Godfrey J. in Overseas Trust Bank (supra).  At p.575B - E of Sung Foo Kee Ltd. (supra), Godfrey J.A. said –

‘Here, as in England and Wales, the judge has a discretion, in a case which does fall outside the general rule, to direct the taxation of the receiving party’s costs on the basis which he considers to be appropriate to that case. This is not a discretion limited by indications in previous cases, such as, eg the observations of Godfrey J in Overseas Trust Bank Ltd v Coopers & Lybrand [1991] 1 HKLR 177 (in which he declined to order the successful party’s costs to be taxed on the indemnity basis), as to the sort of special or unusual feature (there does have to be some special or unusual feature)  which could justify an award of indemnity costs. Although the examples given in the judgment of Godfrey J at 182J-183C may be of assistance in other cases in which indemnity costs are claimed, his judgment does not purport to be and is not to be taken as determinative of the sort of case in which indemnity costs may be ordered.’

The Court of Appeal endorsed the view of the English courts that :

‘The power to order taxation on an indemnity basis is not confined to cases which have been brought with an ulterior motive or for an improper purpose. Litigants who conduct their cases in bad faith, or as a personal vendetta, or in an improper or oppressive manner, or who cause costs to be incurred irrationally or out of all proportion as to what is at stake, may also expect to be ordered to pay costs on an indemnity basis if they lose, and have part of their costs disallowed if they win.  Nor are these necessarily the only situations where the jurisdiction may be exercised; the discretion is not to be fettered or circumscribed beyond the requirement that taxation on an indemnity basis must be ‘appropriate’.’ (see Macmillan Inc. v. Bishopsgate Investment Trust Ltd. supra)

Further at p.576 -

‘… it is a pity that various courts have attempted to define in exactly what circumstances indemnity costs may be ordered.’ (see Munkenbeck & Marshall v. McAlpine (1995)  44 Con LR 30 per Hollis J, at page 33)

The Court of Appeal in Sung Foo Kee Ltd at page 576F added :

‘… Our rules do now expressly provide for the taxation of costs on an indemnity basis and when they consider it appropriate judges should not be slow to make orders for the receiving party’s costs to be taxed on that basis.’ ’

(at 1334G – 1335G)

45.  In Cheung Wei Man Vivien and Chan Kim Thiam v Centaline Property Agency Ltd & Others (HCA 286/2000, unreported, 15 December 2006), Lam J (as Lam PJ then was)  also had the following to say:

‘6. It is also useful to remind ourselves what Simon Brown LJ said in Liam v MGN Ltd (No.2) [2002] 1 WLR 2810 at Paras.11 and 12 in considering whether the conduct of a losing party is so unreasonable so as to warrant an award of indemnity costs. In particular, at Para.12, His Lordship observed,

‘I for my part understand the court there to have been deciding no more than that conduct, albeit falling short of misconduct deserving of moral condemnation, can be so unreasonable as to justify an order for indemnity costs. With that I respectfully agree. To my mind, however, such conduct would need to be unreasonable to a high degree; unreasonable in this context certainly does not mean merely wrong or misguided in hindsight.’ ’

46.  It can therefore be seen that, while the Court would take into account the litigation conduct of a party when deciding whether to make an indemnity costs order, such conduct has to be ‘unreasonable to a high degree’, and unreasonable in this context ‘certainly does not mean merely wrong or misguided in hindsight’.”

35.  In gist, the Court’s discretion on making indemnity costs orders is unfettered.  The question is whether the circumstances of a particular case render it appropriate to do so.  While case authorities may provide examples on when the courts had made such an order, it should not be taken as if those courts were trying to define in exactly what circumstances indemnity costs should be ordered.  The categories of cases in which such a costs order may be considered appropriate are not closed. However, when considering the question of appropriateness, the Court should bear in mind that in order to justify the making of such an order, there must be some special features in the case. 

36.  Bearing the above in mind, with respect to the plaintiff’s counsel, although the New Witness Statement Summons was dismissed for the reasons set out in the Judgment, I am of the view that the taking out of the said summons cannot be said to be “unreasonable to a high degree”.  This is so even though it was a last-minute application.

37.  The plaintiff’s application for an indemnity costs order would therefore have been dismissed anyway even if he did not have the procedural difficulty in making the application at this stage.

B3.  The defendant’s medical condition

38.  At the end of the plaintiff’s written submissions lodged on 28 April 2025, the plaintiff further argued that:

“58. […] time and costs were also suffered, to P’s detriment, by reason of D’s medical condition which, it was announced by D’s Counsel after 5 days into the trial, would disable D from being cross-examined for more than 3 hours per day. D’s family must have known this and the effects of D’s medication for some time. Had they informed P earlier, consequential applications could have been made on his behalf in the context of the time estimate for cross-examination based on a 5-hour day. As it was, the cross-examination overran by 4.5 days. P respectfully submits that he should not be required to shoulder this additional financial burden. Your Lordship is invited to consider exercising Your discretion in P’s favour in this regard.”

39.  With greatest respect, this is a very bad point which should not have been made:

(1)  In the circumstances where the plaintiff is not challenging the genuineness of the defendant’s medical condition, asking the Court to make a costs order on the basis of the defendant’s medical condition is in effect inviting the Court to penalise the defendant for his sickness. This is plainly not right;

(2)  The plaintiff’s logic is not understood.  It seems that he is suggesting that if he had known about the defendant’s medical condition beforehand, the trial would not have over-run, because he would have asked for a longer trial length in the first place.  How is that related to the “additional legal costs” which the plaintiff now asks the defendant to bear?

(3)  In any event, this is not part of the plaintiff’s application for variation of the Costs Order Nisi in accordance with the letter issued by his solicitors dated 11 July 2025. Indeed, he has not, for example, asked for any order in the said letter that the defendant should be liable for the costs of 4.5 days of the trial. The plaintiff should not be allowed to amend his application as such.

40.  I would therefore reject this submission.

C.  THE DEFENDANT’S VARIATION SUMMONS

41.  The defendant’s application for variation is in 2 parts:

(1)  He asks that Kishin be ordered to bear the defendant’s costs of the action personally; and

(2)  He further asks for an indemnity costs order against the plaintiff.

42.  I will deal with these 2 parts of the defendant’s application in turn below.

C1.  Personal liability of Kishin to pay costs

43.  In relation to the first part of the defendant’s application, the defendant submitted that the Court should order Kishin to be personally liable for the defendant’s costs:

(1)  primarily on the bases that he is the administrator of Narian’s estate, and that he has adopted the present action;

(2)  alternatively, on the basis of the court’s jurisdiction under section 52A(2)  of the High Court Ordinance (Cap.4, Laws of Hong Kong)  and Order 62 rule 6A of the RHC to make a costs order against non-party.

44.  Mr Lo, in his written submissions dated 18 July 2025, does not dispute that Kishin should be liable personally for the defendant’s costs at all.  However, he submitted that the defendant’s summons for variation of the costs order nisi should nonetheless be dismissed for the reason that Kishin has represented repeatedly that he would be so liable.  It was therefore said that the defendant’s Variation Summons is “wholly academic and effectively beating a dead horse on an issue that was abundantly clear to all parties involved and is wholly unnecessary”[9].

45.  With respect, I disagree with the plaintiff’s submissions.

46.  First, as Mr Lo accepted, in the present case, Kishin, as the personal representative of Narian’s estate, is only “prima facie personally liable”[10] for the defendant’s costs. 

47.  Hence, there is no fixed rule that Kishin is as a matter of course personally liable for such costs. 

48.  As Mr Lo has expressly confirmed that he raises no dispute on the relevant legal principles cited by the defendant’s counsel in their written submissions dated 11 July 2025, I would gratefully set out the same below for the sake of clarity:

“4. In Williams, Mortimer & Sunnuck on Executors, Administrators and Probate (22^nd Ed, 2023), it is explained at §59-01:-

‘[59-01] In hostile litigation with outsiders, whether brought by representative as claimants or brought against them as defendants, the representatives will be in the position of any other litigants. The costs will be in the discretion of the court, but the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party. The representative will be personally liable to the other party for any costs order made against them, and their liability will not be limited to the assets of the estate even if their liability on the rest of the judgment debt is limited to the assets. The judge making such a costs order will not be concerned as to whether the representative will be entitled to be indemnified against that order out of the estate, and will have no jurisdiction to decide that question, because the persons interested in the estate are not party to the proceedings…’ (emphasis added)

5. In Lewin on Trusts (20^th Ed, 2020)  at §48-113, the learned authors explained a trustee’s personal liability to bear the costs of unsuccessful claim:-

‘Trustees are not in general in a privileged position as to costs in third-party proceedings, as between themselves and the other party to the dispute, merely because they are trustees. The general position is that the trustee is on no better footing than any ordinary plaintiff or defendant, for the circumstances of the trust cannot be allowed to affect the interest of a third party.Accordingly, if a trustee makes a claim against a third party and loses, the trustee will normally be ordered to pay the costs…’ (emphasis added)

6. In Dagnell v J.L. Freedman & Co [1993] 1 WLR 388 at 392B-D, Lord Browne-Wilkinson held that:-

‘… In an action between trustees as plaintiffs and strangers to the trust as defendants, the costs of the action will be dealt with by the trial judge on the normal basis and without regard to the fact that the plaintiffs are trustees. If, in such an action, trustee plaintiffs are ordered to pay the defendants’ costs, the trustee plaintiffs will be personally liable so to do…’ (emphasis added)

7. In Wong Chong Kwai Yin v Tsang Hau Ling, the executrix of Tang Lan Fong [2022] HKCFI 1367 at §§7-10, DHCJ Douglas Lam SC applied the above principles stated in Williams, Mortimer & Sunnuck[D#1] and Lewin on Trusts and ordered that the executrix defendant should be made personally liable for the costs of the action commenced against the deceased during her lifetime.

8.  The starting point is that the personal representative shall be liable for all the costs from the start in the same manner as if they had commenced the action. The burden would be on the party seeking to depart from it to justify such a departure: see Wong Chong Kwai Yin at §§15-22, per DHCJ Douglas Lam SC; see also Williams, Mortimer & Sunnuck at §55-10.”

(original emphasis)

49.  It can therefore be seen that a cost order against the administrator of the deceased’s estate is only described as “normal”, “a general rule” and “a starting point”, and that the Court retains a discretion as to whether such an order should be made or not.  In other words, an expressed court order is necessary so as to make Kishin personally liable, as well as for the purpose of enforcement.

50.  Second, while Kishin had acknowledged before that he might be personally liable for the defendant’s costs, I do not agree with his counsel’s submissions that “it was clear as day to all parties”[11] that Kishin would be personally liable for the defendant’s costs if the action was unsuccessful.

51.  In this regard, I only have to refer to Kishin’s 3^rd Affirmation filed on 20 June 2025, which reads:

“1. I am the Plaintiff in this Action and I make this Affirmation in opposition to the Summons taken out by the Defendant on 30 April 2025 seeking to vary the cost order nisi made by the Honourable Mr. Justice H. Au-Yeung in the Judgment dated 18 March 2025.

[…]

27.  I also acknowledge that I may potentially be personally liable for the costs of this Action but I oppose the Defendant’s Summons seeking to vary the cost order nisi.”

52.  Kishin’s position cannot be clearer: even up to the time when he made his 3^rd Affirmation, he was still opposing the defendant’s variation application.  It should be reiterated that, according to the said Affirmation, such a stance was made not on the ground that he had allegedly given any consent to a court order to that effect.  Indeed, if that was his stance, he could have informed the Court and the defendant’s solicitors once he had been served with the defendant’s Variation Summons, so that costs could have been saved on at least the first part of the defendant’s application.

53.  In any event, given the plaintiff’s latest stance, the defendant’s application should be allowed. 

54.  For the avoidance of doubt, I am of the view that in the circumstances of this case, Kishin’s personal liability should cover the defendant’s costs of the whole action rather than from the time when he obtained the carry-on order. The plaintiff has not contended otherwise.

55.  Given the above conclusion, there is no need for the Court to consider the defendant’s alternative application made pursuant to section 52A(2)  of the High Court Ordinance and Order 62 rule 6A of the RHC.

C2.  Indemnity costs

56.  I have already set out the applicable general principles in the earlier part of this Decision, and I will not repeat the same here.

57.  In the present application, the grounds relied on by the defendant are as follows:

(1)  The plaintiff’s claims were clearly devoid of merits and were brought without sufficient evidential foundation;

(2)  It can be inferred that Kishin continued with this unmeritorious action because he wanted to take advantage of the defendant’s poor health condition;

(3)  Kishin had given false or untruthful evidence (including the advancement of the factual case of the Understanding and the alleged Indian family tradition)  which have been rejected by this Court;

(4)  Kishin has no intention to reach an amicable settlement with the defendant by asking for an unreasonable amount of $116 million for settlement.

58.  Having considered carefully the defendant’s elaboration on the aforesaid matters, I am of the view that this is not a case which warrants the making of an indemnity costs order against the plaintiff. My reasons are as follows.

59.  First, although this Court has found against the plaintiff on all his claims, in my view, this is just another case in which a plaintiff has not been able to establish his claims on the balance of probabilities.  Such a failure does not necessarily mean that the plaintiff should be further penalised by the Court’s adoption of a higher scale of taxation of costs.  As emphasized by To J in KJ v KMLM (HCMC 4/2010, unreported, 21 May 2014)  at [22]:

“If unreasonable conduct is relied on, the losing party’s conduct would need to be unreasonable to a high degree. In this context, ‘unreasonableness’ does not mean merely wrong or misguided in hindsight: see Kiam v MGN Ltd (No 2)[12]. Advancing a case which is difficult, unlikely to succeed or which in fact fails, or without any foundation in law or fact, or devoid of merits, is not necessarily in itself a sufficient reason for an award of indemnity costs: see Overseas Trust Bank[13]; Shaina Investment Corporation v Standard Bank London Ltd[14]; Golden Sand Marble Ltd v Hsin Chong Construction Co Ltd[15]; Kao, Lee & Yip (a firm)  v Midland Realty International Limited[16]. The court’s finding that the claim or the ground of defence is plainly and obviously incredible on the fact, or that the evidence has been deliberately untruthful will not necessarily in itself warrant an order for indemnity costs. The conduct of the losing party must be of a more venal kind and the conduct of the litigation has in some sense been wicked: see Choy Yee Chun v Bond Star Development Ltd[17]; and Kao, Lee & Yip[18].”

60.  Second, although I have found that Kishin was an incredible witness, that, again, does not necessarily mean that an indemnity costs order should be made.  As Deputy High Court Judge Lisa Wong SC (as she then was)  pointed out in Kao, Lee & Yip (a firm)  v Midland Realty International Limited (HCA 2153/2007, unreported, 31 March 2010)  at [18]:

“To my mind, it must at the end of the day be a question of extent and degree. […] Indeed, in every case where there is a material dispute of fact, the Court is bound to prefer one party’s account. Such a finding, without more, is not a special or unusual feature making indemnity costs appropriate.”

61.  Third, while it is true that this Court has at the end of the day accepted the existence of the CESCO Arrangement, it should be borne in mind that it has also been commented in the Judgment that it was indeed suspicious for the defendant not to plead such an arrangement in his first version of the Defence.  Hence, the plaintiff’s allegation of fabrication, though not accepted, cannot be said to be so unreasonable that should lead to a more serious costs consequence.

62.  Fourth, there is not enough material to infer that Kishin’s decision to continue with the present action was reached out of his desire to take advantage of the defendant’s poor health condition.

63.  Fifth, the offer of $116 million was made in the form of a sanctioned offer.  As accepted by the defendant, this was just a part of the plaintiff’s claims, for the defendant stated in his 9^th Affirmation that:

“6. […] Even just taking Kishin’s settlement offer of HK$116,000,000 (exhibit ‘CTS-86)  as an illustration, Kishin’s share to that would have been HK$16,571,428.60 (i.e. one seventh thereof)  which would be a substantial sum. This is not to mention that if Narian’s claim were wholly successful, Kishin’s share would be much greater.”

(emphasis added)

64.  Hence, it cannot be said that the offer was “plainly unreasonable” as alleged.   

65.  Looking at the matter in the round, I am not satisfied that the threshold of making an indemnity costs order is met.

66.  I therefore conclude that the defendant’s costs should only be taxed on the usual party-and-party basis.

D.  ORDER

67.  I therefore make the following orders:

(1)  The Estate of Narian Samtani, Deceased and Kishin Samtani personally do jointly and severally pay the defendant the costs of this action (including the costs of the trial and all the reserved costs (including the costs of the Specific Discovery Summons filed on 23 April 2012)), to be taxed on party-and-party basis if not agreed, with certificate for two counsel.

(2)  The plaintiff’s Variation Application be dismissed.

E.  COSTS

68.  I make a costs order nisi that the Estate of Narian Samtani, Deceased and Kishin Samtani personally do jointly and severally pay the defendant his costs on the plaintiff’s Variation Application and 50% of his costs of the defendant’s Variation Summons, with certificate for two counsel, to be taxed if not agreed.

69.  The above order nisi shall become absolute in the absence of application to vary (which, if any, will be disposed of on paper)  within 14 days hereof.