LAM CHI YING v. TO PIK HA

HCA 1930/2013 &
HCMP 557/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1930 OF 2013

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AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 557 OF 2013

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(Heard Together)

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D E C I S I O N

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1.  I have an application by two summonses dated 31 July 2015 before me to vary the costs order nisi that I made in the judgment after trial I handed down on 17 July 2015.

2.  Although there were two sets of proceedings, namely a petition under section 168A of the Companies Ordinance, Cap 32, and a High CourtAction and a number of parties involved, essentially it was dispute between two camps in the family against each other. 

3.  The petition and the High CourtAction had, since May 2014, been ordered to be tried together, and there was much overlap in the evidence in the two sets of proceedings. 

4.  There were three main issues at the beginning of the trial, namely:

(1) whether the allotment of additional shares in the company in 2012 was made with the express consent of Lui Wai Hang, said to have been given at a meeting in April 2012;

(2) the question of Madam To’s locus, in particular whether Lui Wai Hang held the one share in the company during his lifetime as one of the two administrators of his father’s estate;and

(3) the proceeds of the Cheung Sha Wan property, which was sold in 1989.

5.  The camp of thefamily, that was Ms Wu’s clients, lost on two of those three issues. 

6.  Ms Wu submitted that a good part of the trial had been spent on the question of locus.  That is correct.  But, in my recollection, a very substantial amount of time was also taken up by the allotment and consent issue. 

7.  It has been submitted that the allotment and consent issue was not strictly necessary given my findings in the end on the locus issue.  But that would be to look at the matter with the benefit of hindsight.

8.  It was the respondents to the petition who pleaded and relied heavily upon the allotment and the consent allegedly given by Wai Hang.  In fact, the allotment was what triggered the litigation in the first place.  It was what brought about the petition presented by Madam To which complained of unfairly prejudicial conduct in the form of an allotment which, on the face of it, diluted the shares held by the existing shareholders, including Wai Hang.

9.  The respondents’ evidence on the meeting and on the consent given by Wai Hang, was thoroughly disbelieved and wholly rejected.  So was the evidence about the minutes said to have been created by Wai Kuen and signed by Wai Hang. 

10.  Ms Wu submitted that the reliefs sought by Madam Lam, the mother, in the High Court Action could not have been sought in the petition.  But the substance of the dispute was entirely raised in the petition.  The point that the share was not held by Wai Hang beneficially but by him as an administrator, was raised squarely by the respondents in the petition itself.

11.  The reliefs sought by Madam Lam in the High Court Action would, therefore, seem to me to be in the nature of a formality that would necessarily follow the findings in the petition.

12.  What was new and separate in the action was a claim for an account of the sale of the Cheung Sha Wan property which turned out to be without any basis whatsoever.  It was about a sale that had taken place some 25 years ago.  The mother, when asked about the sale of the property at trial immediately came up with the answer that the proceeds went back into the family business, which makes one wonder how the claim could have been brought in the first place, let alone pursued at trial up to the stage of closing submissions. 

13.  Another thing that was separate and new in the High Court Action was the allegation that Wai Hang fraudulently, or dishonestly, misappropriated the one share held by him, and had acted in breach of trusts and of his fiduciary duty.  I regret to say that that was quite an inappropriate allegation to make in circumstances where there was no evidence to substantiate it at all.  It was, again, wholly without basis.  Such allegations of dishonesty against a deceased person ought never to have been made without proper basis.

14.  Costs are often a difficult matter, with many things that can be said on both sides.  The order nisithat I made in my judgment was not the product of an exact science that seeks to break down all the steps taken with a view to allocating them precisely into individual pigeon-holes.  It is a broad discretion that I exercised in an attempt to reflect the broad justice of the case as I perceived it. 

15.  In the circumstances, I am not satisfied that my order nisi was inappropriate, or that any other order would be manifestly more appropriate.  I shall therefore dismiss the summonses with costs to Madam To.