LI KA SING, the executor of the Estate of Kong Wing Hong, deceased v. KONG COLIN CHUNG PING AND OTHERS

HCMP 1620/2016 HCMP 645/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1620 OF 2016

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D E C I S I O N

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Introduction

1.  This is an application of the 1^st and 2^nd defendants for leave to appeal against my decision made at the call-over hearing of the Originating Summons dated 24 June 2016 (“the OS”). Shortly before the hearing, the 1^st and 2^nd defendants took out a summons dated 10 November 2016 for their application to strike out paragraph 2 of the OS (“the Summons”) on 16 November 2016 and alternatively the same to be disposed of as a point of law under O.14A or as a preliminary issue under O.33, r.3.

2.  At the said hearing, I gave directions to the parties in regard to the filing of evidence for the purposes of both the OS and the Summons. I further ordered that the OS and the Summons are to be heard together on a date to be fixed in consultation with counsel’s diaries with one day reserved  (“the Direction”).  At the same time, I vacated the call-over hearing of the Summons fixed on 24 November 2016 before a master.

3.  The 1^st and 2^nd defendants are dissatisfied with the Direction and they think it is only right that the Summons should be heard and determined before the hearing of the OS. They intend to take this matter to the Court of Appeal.

4.  The 3^rd defendant and the 4^th defendant through their solicitors indicated in writing their neutral position in respect of this application. I note that at the hearing, the 3^rd defendant actually supported the Direction.  I excuse their attendance in light of their current position.

Decision under challenge

5.  Since the Direction was made orally at the hearing, there is no written reason given. The transcript shows the exchange between this court and the parties on this matter. I made it clear that the present O.85 proceedings are administrative actions calling for speedy resolutions so that trustees could proceed with the administration expeditiously.

6.  This court noted that the 1^st and 2^nd defendants by the Summons apply to strike out paragraph 2 of the OS only. No affirmation had been filed in support of the Summons. The resolution of the Summons does not dispose of the OS entirely. To avoid unnecessary costs and interlocutory hearings before the substantive hearing of the OS, this court was of the view that both the Summons and the OS should be heard together.

7.  Mr Tsui, for the 1^st and 2^nd defendants at the call-over hearing, urged this court to take the two-stage approach which would be elaborated later in this Decision so as to ease their concern about the operation of a particular provision of the codicil in question. I was not persuaded that such a concern was sufficiently cogent.

8.  I also note that the call-over hearing was not open to public and hence the order containing the Direction was made confidential whereas the hearing of this leave application is open to public. Nevertheless, I shall only disclose minimum facts necessary for the understanding of this Decision.

Applicable legal principles

9.  The applicable principles relating to this application are not in dispute. The applicant has to fulfil the requirements in section 14AA(4) of the High Court Ordinance, Cap.4A in that it must be shown the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard.

10.  The Direction is clearly a case management decision in nature. The Court of Appeal has made it clear the threshold of appeals against case management decisions and I need only refer to a more recent decision of the Court of Appeal in First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd and Anor. [2016] 4 HKLRD 360 where Kwan JA said the following at §5:

“A number of decisions on the relevant threshold test in this regard have been cited to the judge and to this court. We need only refer to the decision of the Chief Judge in 廈門新景地集團有限公司 v Eton Properties Limited, HCMP 13, 15, 18 and 21/2012, 14 February 2012 at §9:

“No leave to appeal should be granted unless the threshold test of reasonable prospect of success is satisfied, or (which is not relevant to the present case) there is some other reason in the interests of justice why the appeal should be heard: section 14AA(4), the High Court Ordinance (Cap 4). But the court still retains a discretion whether to grant leave even if the threshold test is satisfied. This is particularly so in relation to an intended appeal against a case management decision. In relation to such an intended appeal, this court rarely intervenes save in exceptional circumstances. As Kwan JA reiterated in the recent case of Mimi Kar Kee Wong Hung v Severn Villa Limited, HCMP 2192/2011, 12 January 2012, para 31, it need hardly be emphasized that generally, an appellate court will not interfere with a judge’s exercise of discretion unless the judge has misunderstood the law or the evidence or the exercise of his discretion was plainly wrong such that it was outside the generous ambit within which a reasonable disagreement is possible. In relation to case management decisions, the intended appellant must show that the judge “has gone clearly wrong and made orders which will clearly involve an injustice or an inability for the trial court to carry out its task”, or if the judge “erred in principle or the order was irrational having regard to the issues that had to be resolved”. It is of great importance that this court does not descend to micro‑managing cases pending before the court below.”

Grounds of the intended appeal

11.  I should first say a bit more about the background. Paragraph 1 of the OS concerns a question of construction relating to Clause 3 of the codicil in question under which all the defendants are beneficiaries. The plaintiff is the executor and by the OS he seeks the assistance of this court to decide on the proper construction of the provision, which relates to a property. In the supporting affirmation, it is alleged that both the legal advisors of the plaintiff and those of the 1^st and 2^nd defendants advised the plaintiff to seek assistance from the court by way of the present administrative proceedings.

12.  Paragraph 2 of the OS invites a determination of the question as to whether upon the true construction of the codicil and in the events which have happened any of the defendants had disputed the will in question and/or the codicil and if so the in terrorem provision contained in Clause 2 (“No-Contest Clause”) in the codicil should be triggered so as to deprive the contesting beneficiary of his shares of the estate.

13.  Mr Lynn, for the 1^st and 2^nd defendants not having appeared at the call-over hearing, puts forth two main grounds in this application. First, he submits that this court failed to take into account sufficiently or at all the line of cases governing the timing of striking out applications. He further submits that this court ought to have concluded that the objective of the striking out application would be defeated if the OS is also heard at the same time.

14.  I see no merit in this ground. It is trite that striking out applications should be made as soon as possible so as to save unnecessary costs. However, it does not follow that in every case such striking out applications must be determined before the substantive hearings. How to deal with a striking out application depends on its scope and nature and the particular circumstances of the matter in question. I fail to see how the Direction made in light of the circumstances of these proceedings is against the general principles or it is plainly wrong.

15.  I do not agree that the purpose of the striking out application will be defeated if it is to be heard together with the OS. Indeed this is the two-stage approach advocated by Mr Tsui at the call-over hearing and insisted here by Mr Lynn. This is the second ground advanced by Mr Lynn.

16.  The major concern of the 1^st and 2^nd defendants is that if they take part in the hearing of the OS and make submissions on the construction of Clause 3, there is a danger that they will be taken to have contested the will and/or the codicil. No-Contest Clause will be hence invoked leading to drastic consequences. Understandably they want to have the ruling of the court on the application of the No-Contest Clause first before they decide whether to proceed to argue on the construction of Clause 3.

17.  It did, and still does, not appear to be a valid concern to me so as to necessitate a separate hearing of the Summons prior to that of the OS.

18.  Mr To, for the plaintiff, confirmed at the call-over hearing, as shown in the transcript, that the possible triggering event in Paragraph 2 of the OS actually refers to the indication of the views of the 1^st and 2^nd defendants on Clause 3 with reference to the letter of the plaintiff’s solicitors dated 2 November 2016. Given this confirmation, I see no reason why the parties should be given directions to file separate evidence for the purpose of the Summons and argue the same on a separate date prior to the OS. Costs and delay are always my principal considerations.

19.  The plaintiff finds it necessary to seek the assistance of the court by the OS because he is not sure about the construction of Clause 3. With or without the submissions of the 1^st and 2^nd defendants on the same, the plaintiff has to proceed with the OS and the substantive hearing of the OS could not be dispensed with. The 1^st and 2^nd defendants may simply make submissions on the construction of Clause 3 on an expressly without prejudice basis. Mr To agrees to this course at the hearing though Mr Lynn draws to my attention that the 3^rd and 4^th defendants have not yet expressed their views on this. I indicate to him that the judge hearing the OS and the Summons can certainly allow this course with or without the agreement of the 3^rd and 4^th defendants in order to dispose of the matters in fairness. 

20.  If the court decides on the effect of the Non-Contest Clause in favour of the 1^st and 2^nd defendants, the court can proceed to determine the construction of Clause 3 in light of their submissions on the same. If the court decides otherwise, their submissions on the same can simply be disregarded without triggering the Non-Contest Clause. I believe that this is the most costs-effective way to deal with both the Summons and the OS.

30.  In the premises, I am not satisfied that the 1^st and 2^nd defendants can show exceptional circumstances under which the Court of Appeal would interfere with my case management decision. I see neither obvious error in nor serious injustice caused by the Direction. The 1^st and 2^nd defendants fail to meet the threshold of section 14(A)(A)(4) of the High Court Ordinance in my judgment.

Conclusion and Order

31.  For the reasons given above, I dismiss the application of the 1^st and 2^nd defendants. I make an order nisi that the 1^st and 2^nd defendants should pay the plaintiff his costs of this application forthwith to be taxed if not agreed.