CHAU YEE CHAI HENRY v. CHAN YUK KWAN

HCAP 10/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 10 OF 2004

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J U D G M E N T

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1.  As a general rule, costs should follow the event.  In determining the event, the court looks at the substance of the matter. 

2.  The probate action was commenced for a single purpose, namely, for the Plaintiff to obtain grant of representation of the estate of the deceased involved in the present case.  The outcome of the litigation is that the Defendant will withdraw the caveat that she has entered in relation to the estate so as to enable the Plaintiff to obtain the grant without hindrance.  To avoid a court hearing in order to prove his entitlement to a grant in solemn form which would involve further costs, the Plaintiff has, very wisely, chosen to ask for leave to discontinue the present action, following which, he will apply for a grant of representation in the common form.  That application will no longer be obstructed by any caveat, as the caveat that has been entered by the Defendant will have been withdrawn as I have just mentioned.

3.  So looking at the substance of the matter, the Plaintiff has essentially succeeded in his claim, albeit without a full trial.  The Plaintiff must, prima facie, have the costs of the present action, including today’s argument on the proper relief to be granted by the Court following the abandonment of the Defendant’s defence and on costs. 

4.  I do not think the Plaintiff has done anything unnecessary or unreasonable in commencing the present action or in prosecuting it.  In this regard I have heard, but do not accept, the submissions of Ms Tsang, appearing for the Defendant.  Given the caveat and the appearance to the warning, the Plaintiff had no alternative but to commence the present action.  I do not think the Plaintiff has done anything unnecessary, unreasonable or improper in the course of prosecution of the present action.

5.  As I have observed during previous interlocutory hearings before me, there really was no defence to the Plaintiff’s case.  Very wisely, the Defendant decided to abandon her defence.  That had the result of reducing costs in the present action, but that cannot be a reason for depriving the successful Plaintiff of his costs in the action. 

6.  Ms Tsang said the abandonment of the defence was for the interests of both parties and the court.  To the extent that the abandonment brought about a cutting down of the costs of the probate action and a saving of time and resources of the court, that submission was true, but other than that, I do not see how that submission could provide a legitimate ground for resisting the Plaintiff’s claim for the costs of the present action. 

7.  I do not accept the Defendant’s fear of the Plaintiff’s distribution of the estate of the deceased if he should be granted representation, contrary to her contention that she is a creditor of the estate, as a sufficient or good ground for lodging the caveat or resisting the present probate action.  Her claim as a creditor is yet to be determined in a separate High Court action, which is where the matter should be tested.  If there is a real fear of the Plaintiff, as administrator of the estate, ignoring her claim and distributing the assets prior to the determination of that High Court action after the Plaintiff’s obtaining successfully the grant, the Defendant should go for injunctive relief against the estate in that High Court action. 

8.  I do not accept that it was right or proper for the Defendant, in order to cater for her fear, to enter the caveat or enter an appearance to the warning filed pursuant to the caveat, or worse still to oppose the present probate action.

9.  I do not think, in short, the Defendant has, through counsel, shown any good ground for depriving the Plaintiff of his costs of the present action.  As I said, in substance, the Plaintiff has been successful in the action.  He must have the costs of it.  So having considered all the relevant circumstances, in the exercise of my discretion, I order that the costs of the present action, including the hearing today, be paid by the Defendant to the Plaintiff. 

10.  As far as the basis of taxation is concerned, it must be apparent from my above judgment that, in my view, the Defendant has really had no defence to the present probate action.  The whole idea of resisting the application for grant was misconceived.  The idea of entering a caveat and an appearance to the warning filed pursuant to the caveat, and defending the present probate action as a means to coerce the Plaintiff into paying up the alleged debt which is the subject matter of the separate High Court action, or at least compromising with the Defendant on her claim for repayment of the alleged debt was, in my judgment, wholly misconceived. 

11.  Mr Chong, on behalf of the Plaintiff, has asked for costs on an indemnity basis. 

12.  The latest and highest authority on the award of costs on an indemnity basis is the decision of the Court of Final Appeal in Town Planning Board v. Society for Protection of the Harbour Ltd (No. 2) (2004) 7 HKCFAR 114. 

13.  I have borne in mind the very flexible approach towards the grant of indemnity costs that has been explained by the Court of Final Appeal in that case.  I have considered the circumstances in the present case.  I have borne in mind what I have said about the Defendant’s position.  In my judgment, a higher basis of taxation is warranted but I do not think this is such a case that should call for the making of an indemnity order as to costs.  The Defendant, as I said, was misconceived in her actions, but I do not think that what has happened was so culpable as to attract the award of costs on an indemnity basis against the Defendant.  In my judgment, costs on a common fund basis would be sufficient to reflect what has happened in the present case. 

14.  I should add that so far as the need for today’s hearing is concerned, I think the Plaintiff, having failed to reach an agreement with the Defendant, was quite entitled to have today’s hearing before the Court so as to sort out the substantive relief to be granted following the abandonment of the defence, and the proper order as to costs.  I note in particular that, even at this hearing, the Defendant was resisting costs and was suggesting that both parties bear their own costs, a position which was rejected by the Court.  So as I have already indicated, the costs of today’s hearing should form part of the costs of the action and they should go to the Plaintiff.

15.  In short, costs of this action, including costs of today’s hearing and all costs previously reserved (if any), be paid by the Defendant to the Plaintiff, to be taxed on a common fund basis if not agreed.