TSANG WING KWAI v. TSANG WING FAI

HCMP 3186/2016

[2020] HKCFI 2723

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 3186 OF 2016

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DECISION

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1.  This is the plaintiff’s application by way of Summons dated 2 June 2020 for an order that the sum of HK$1,500,000 paid into the Court by him on 27 June 2018 (the “Sum”), and any interest accrued thereon, be paid out and released to the plaintiff through his solicitors forthwith.

2.  The background and history of the dispute between the parties is protracted and set out in some detail in §2–17 of the judgment of Wilson Chan J (the “Judge”) in these proceedings dated 21 May 2018 (the “Judgment”).  I do not propose to repeat the same here, and will simply set out the following to explain how the Sum came to be paid into Court.

(1)  By an Originating Summons dated 16 November 2016, the plaintiff sought, inter alia, an order to remove the defendant from his position as executor of the Estate.  The trial of the Originating Summons took place on 4 April 2018 and culminated in the Judgment (referred to above) in which the Judge ordered, inter alia, that the defendant be removed as executor of the Estate and a professional accountant be appointed as executor in his place (the “Order”).

(2)  On 19 June 2018, the defendant filed a Notice of Appeal against the Judgment (the “Appeal”).  On 22 June 2018, the defendant took out a Summons for a stay of the Order. 

(3)  By an order of the Judge dated 27 June 2018, the Summons was adjourned for substantive argument on a date to be fixed in consultation with counsel’s diaries, and the defendant’s application for an interim stay pending determination of the Summons was dismissed upon (i) an undertaking by the plaintiff to indemnify the Estate of all costs and expenses reasonably incurred for the engagement of a professional accountant as the executor should the Appeal be successful (the “Indemnity Undertaking”)and (ii) an undertaking to fortify the Indemnity Undertaking by way of payment into Court of the sum of HK$1,500,000 (the “Payment Undertaking”).

3.  Pursuant to the Payment Undertaking, the plaintiff paid the Sum into Court on 28 June 2018.

4.  The Appeal was dismissed by the Court of Appeal by its judgment dated 13 February 2019.  The defendant’s application for leave to appeal to the Court of Final Appeal was dismissed by the Court of Appeal by its judgment dated 28 June 2019 and his renewed application before the Appeal Committee of the Court of Final Appeal was dismissed by order dated 4 May 2020.

5.  The Judgment and the Order are now final and conclusive.  As a result, the premise of the Indemnity Undertaking (ie the defendant’s success in the Appeal) falls away, and no question of enforcement can possibly arise.  The plaintiff is thus entitled to payment out of the Sum.

6.  The defendant opposes payment out on the basis of alleged misconduct by the plaintiff in these proceedings.  He says that the plaintiff, who was the sole remaining director of Open Treasure Industries Limited (“OTIL”), a company partly owned by the deceased, “deliberately obstructed [D] in completing the true and perfect inventory and account of the [Estate]” by failing to provide him with OTIL’s accounts.

7.  I cannot accept this submission.  The sole question before this Court is whether there is any need for continued fortification of the Indemnity Undertaking.  As explained above, there is not.  The defendant’s allegations of misconduct, even if they were to be accepted at face value, do not bear upon this question.  Insofar as these allegations go to the merits of the substantive dispute between the parties, they should have been ventilated before the Judge in the trial of the Originating Summons.  That aspect of the proceedings is now res judicata and cannot be reopened by this Court.

8.  Costs should follow the event.  I make an order nisi that the costs of this application be paid by defendant to the plaintiff, to be taxed if not agreed.