CHIU YEE MUI v. FUNG YUEN KWAN, VERONICA

HCA 148/2024

[2025] HKCFI 3892

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 148 OF 2024

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DECISION ON COSTS

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Introduction

1.  By Decision herein dated 1 August 2025 (see [2025] HKCFI 3207):[1]-

(1)  I order that upon the Defendant’s undertakings (the “Undertakings”)  to (i)  make an application to restore the Company in the BVI forthwith; (ii)  prosecute the application with due diligence; and (iii)  keep the Plaintiff informed of the proceedings relating to the application, the present proceedings be stayed pending the final determination of the ownership of the Share in the Company as a preliminary issue in the ancillary relief proceedings in FCMC 10614/2023 (including any appeals therefrom): see para 47.

(2)  I did not strike-out any part of the Plaintiff’s statement of claim. In this regard, I indicated that had it been necessary to deal with the Defendant’s striking-out application, I would only have struck out prayers (11)  and (12): see para 56.

(3)  In light of the stay order that I made and the Plaintiff’s clarification under the amendments to the statement of claim, I set aside the Stay Order made by the Master (which was confined to the determination of the Validity of Marriage Issue in FCMC 10614/2023[2]): see paras 57 to 59.

2.  Pursuant to the directions set out in paragraphs 63 of my Decision, the parties have lodged written submissions on the question of costs, which I have considered.

3.  This is my Decision on Costs.

Deliberation

4.  The issues that were argued before the Court were:-

(1)  whether the present proceedings should be stayed pending the final determination of the ownership of the Share in the Company as a preliminary issue in the ancillary relief proceedings in FCMC 10614/2023 (the “Main Stay Issue”);

(2)  whether the pleas and prayers in the statement of claim that are unrelated to the ownership of the Shares in the Company are liable to be struck out (the “Striking-out Issue”); and

(3)  whether the Stay Order made by the Master should be set aside or lifted (the “Master’s Stay Order Issue”).

5.  In Kwok Hiu Kwan v Convoy Global Holdings Ltd [2020] HKCFI 3026 at para 10, Coleman J pointed out that:-

“It is also now settled that there is a broader or wider discretion in the court on matters relating to the costs of interlocutory arguments. Issue-based costs orders are now more common than prior to CJR”

6.  In Waxman v Li Fei Yu & Anor [2013] 6 HKC 424 at para 19, To J stated:-

“Summing up on the post-CJR position, I think the court has much wider discretion as to costs in interlocutory proceedings. Unlike other proceedings, the general rule of costs following the events do not apply. The court is entitled to take into account all the circumstances of the case, including those set out in rule 5, to make such order as it thinks fit. In the exercise of its discretion, the court may take the issue-based approach or may take into account merit of the parties’ case or the possible outcome of the action. The circumstances of interlocutory proceedings are so numerous that it is impossible to make any general rule. Costs to follow the event and costs be to the successful party’s costs in the cause are obvious options.”

7.  Bearing in mind that the contentions advanced by the parties on the 3 Issues were, by and large, distinct, I am of the view that it would be just and fair to apply the issue-based approach to deal with the question of costs.

The Main Stay Issue

8.  As early as 3 April 2024, the Defendant’s solicitors proposed to the Plaintiff’s solicitors that the Defendant be joined to the ancillary proceedings in FCMC 10614/2023, such that the ownership of the Share could be determined as a preliminary issue therein under the TL v ML procedure. The aforesaid proposal was rejected by the Plaintiff: see letter from the Plaintiff’s solicitors dated 11 April 2024.

9.  In the circumstances, the Defendant took out the summons dated 21 May 2024 seeking to, inter alia, stay the present proceedings in favour of the ancillary proceedings in FCMC 10614/2023.

10.  For the reasons elaborated in my Decision dated 1 August 2025 (see paras 29 to 46), I was persuaded to exercise my case-management powers to order that the present proceedings be stayed in favour of the ancillary relief proceedings in FCMC 10614/2023.

11.  I accept the submissions of Ms Bonnie Cheng and Mr Alexander Burg that the Defendant was clearly the successful party in respect of the Stay Issue.

12.  Whilst Mr Anson Wong SC and Mr Martin Kok fairly accepted that the Plaintiff was the unsuccessful party in respect of the Stay Issue, they pointed out that the stay order that I made was subject to the Undertakings, which were only belatedly offered by the Defendant’s leading counsel at the substantive hearing on 17 July 2025.

13.  The Undertakings were a powerful response that practically demolished the Plaintiff’s contentions on jurisdiction. However, for those reasons set out in paragraphs 38(1)  to (9)  of my Decision, I did not accept the Plaintiff’s contention that the family court has no jurisdiction to determine the ownership of the Shares. In other words, the Undertakings were merely an additional reason for rejecting the Plaintiff’s contentions on jurisdiction, and I would not have accepted the Plaintiff’s contentions, regardless of whether the Undertakings were provided.

14.  In the premises, I am not of the view that Undertakings were a reason for reducing the costs to which the Defendant is entitled.

15.  I hold that the Defendant is entitled to the entirety of the costs in respect of the Main Stay Issue.

The Striking-out Issue

16.  In light of my decision to stay the present proceedings in favour of the ancillary relief proceedings in FCMC 10614/2023, it was unnecessary to rule on the Striking-out Issue. In the circumstances, the Defendant did not obtain the reliefs that were sought under paragraphs 1(a)  to (h)  of her summons dated 21 May 2024.

17.  In any event, for the reasons elaborated in paragraphs 50 to 56 of my Decision, I was of the view that the Defendant’s striking-out application would have been substantially unsuccessful, in that:-

(1)  I was only minded to strike out prayers (11)  and (12)  in the amended statement of claim.

(2)  I was of the view that the Defendant could not have successfully struck out paragraphs 25.1, 25.2(ii)  and (iii), 27, 28, 29 as well as prayers (4), (6), (9)  and (10)  in the amended statement of claim.

18.  In the premises, the Defendant is substantially unsuccessful on the Striking-out Issue.

19.  Accordingly, I hold that the Plaintiff is entitled to 80% of her costs in respect of the Striking-out Issue

The Master’s Stay Order Issue

20.  Mr Wong and Mr Kok submitted that the Plaintiff was successful in setting aside the Master’s Stay Order.

21.  However, the stance of the Plaintiff was that the dispute regarding the ownership of the Share should be litigated in the present proceedings, rather than the ancillary relief proceedings in FCMC 10614/2023.

22.  In the premises, I am not of the view that the Plaintiff managed to achieve her strategic purpose. In my view, her “so-called” success regarding the Master’s Stay Order was illusionary.

23.  Be that as it may, for the following reasons, I am of the view that it would be fair to make no order as to costs in respect of the Master’s Stay Order Issue:-

(1)  First of all, the Validity of Marriage Issue (which was the basis for granting the Master’s Stay Order)  was raised by the Master on his own volition.

(2)  Second, one of the reasons why I set aside the Master’s Stay Order was that it was overtaken or superseded by my decision to stay the entirety of the present proceedings in favour of the ancillary relief proceedings in FCMC 10614/2023: see my Decision, para 57.

(3)  Third, another reason why I set aside the Master’s Stay Order was that the Plaintiff belatedly amended her statement of claim by making clear that the outcome of her claims does not depend on the Validity of Marriage Issue (in that even if her marriage with Sam Pa is null and void, she could still seek ancillary relief against Sam Pa on the grant of a decree of nullity): see my Decision, para 58 

24.  In the premises, I make no order as to costs in respect of the Master’s Stay Order Issue.

Conclusion

25.  In the premises, in regard to (i)  the Defendant’s summons dated 21 May 2024; (ii)  the Plaintiff’s notice of appeal taken out on 31 October 2024; (iii)  the Plaintiff’s summons dated 6 December 2024; and (iv)  the Defendant’s summons dated 11 July 2025, I order that:-

(1)  The Plaintiff do pay the Defendant’s costs in respect of the Main Stay Issue to be taxed if not agreed on a party-to-party basis (with certificate for 2 counsel);

(2)  The Defendant do pay 80% of the Plaintiff’s costs in respect of the Striking-out Issue to be taxed if not agreed on a party-to-party basis (with certificate for 2 counsel); and

(3)  There be no order as to costs in respect of the Master’s Stay Order Issue.

26.  I make a costs order absolute to such effect.

27.  With a view to simplifying the process of taxation, I should indicate that having considered the substantive submissions of the parties and their evidence, I am of the view that:-

(1)  55% of the costs incurred by the parties was attributed to the Main Stay Issue;

(2)  35% of the costs incurred by the parties was attributed to the Striking-out Issue; and

(3)  10% of the costs incurred by the parties was attributed to the Master’s Stay Order Issue.

28.  I thank Mr Anson Wong SC, Mr Martin Kok, Ms Bonnie Cheng and Mr Alexander Burg for their very helpful assistance.