CHEUNG CHO KAM SINDY AND ANOTHER v. CHEUNG YUET YING ROSE

CACV 178/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 178 OF 2008

(ON APPEAL FROM HCA NO. 885 OF 2005)

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DECISION

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1.  This is an application for security for costs of an appeal which is set down for hearing in July of this year.  The matter was a claim by two sisters against their older sister who operated their mother’s bank accounts prior to the mother’s death.  The mother had been a shrewd person financially, starting from humble a background and running a shop.  She had made quite a significant amount apparently by operating the shop but also on the Stock Market.  Towards the end of her life, it appears that the defendant had operated the accounts.

2.  The other brothers and sisters and the husband, to a certain extent, as far as I can see - took grave suspicion as to what the defendant had done.  When the defendant was tackled about this immediately after the mother’s death, she returned in total, two sums.  The first was $4 million; the second was $6.7 million which was paid to the other siblings, seemingly without very much attention being paid as to whether there should be any estate duty paid, the provisions of which I believe was still in force at that stage.

3.  However, the case then went to trial with the two sisters claiming that there had been more money.  The judge came to the conclusion at paragraph 90 that there was $6.8 million which should be paid.  He had clearly, on the figures shown there, done what seems to me to have been taking partial account and then also ordered an account to be taken.  I have grave reservations as to whether that was the right course to take.  In my view, if the judge had seen that there was a further sum to be paid in addition to the $10.7 million which had already been paid, then what should have happened is that there should have been a proper account taken, not a partial account.  If necessary, the judge could have said, “Well, assets should be frozen in the meantime.”  That would have been the correct way of going about it.  But at the moment, it seems to me, that the judge has come to a conclusion that there is more money which the defendant has or has taken which has not been accounted for.  However, it is not clear on the judgment, at all, how he arrived at that figure.  In those circumstances, I have grave doubts that the right order was made.

4.  The defendant does appear to be impecunious.  I do not think there is much doubt about that and, indeed, that is the basis upon which this application has been brought.  Nevertheless, I am not prepared to grant security for costs on this appeal because I consider that there are strong grounds for saying that the wrong order has been made and the matter should have been gone about in a different way.

5.  I will say this, however - and this is with a view to the Civil Justice Reform coming into effect later this week - that this is essentially a family dispute.  The defendant was the oldest sister.  There seems to be some animosity between the sisters - some of them are actually overseas - but what should happen, in my view, is that the parties should really try and sit down together and sort out their differences.  It may be that the defendant has taken this money but it may also be that the defendant really has not got any money.  Maybe the money was spent; maybe some of the money was spent on the mother and her medical expenses.  I do not know.  The mother was in hospital for a very long time.

6.  But it seems to me that the family is in danger of tearing itself apart by relying on strict legal principles.  It may be that matters would be best served if some accommodation could be found between the members of the family which would not necessarily be on strict legal basis but would satisfy each of the parties as to what can be obtained, what can be put right, and what can no longer be put right.  I would suggest to the parties that they try and solve their differences other than by strict resort to litigation.

7.  So I propose to decline the application for security for costs but, in view of the reasons for doing so, I am not going to award any costs to either party.  I simply make no order as to costs.