WRIGHT SALLY JANE v. SUSAN COOK

HCAP 26/2012

[2018] HKCFI 953

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO 26 OF 2012

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DECISION ON COSTS

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1.  In this decision, I shall continue to use the abbreviations adopted in the judgment handed down herein on 26 January 2018 (“Judgment”).

2.  To recap, this action was concerned with the administration and inheritance of the Estate (intestate), with each of Sally (the plaintiff) and Susan (the defendant) initially claiming, but denying the other’s claim, to be the Deceased’s sole surviving lawful and natural daughter.

3.  As noted in paragraphs 5 and 6 of the Judgment, on the first day of the trial on 1 August 2017, Susan, through her counsel Mr Enzo W H Chow, conceded Sally’s claim to be a daughter of the Deceased and as such entitled to administer and inherit the Estate.  With Susan’s concession, the issue that remained for determination was whether Susan was also the Deceased’s daughter so as to entitle her to share in the administration and distribution of the Estate with Sally.

4.  I found that Susan was also the Deceased’s daughter and as such entitled to share in the administration and distribution of the Estate with Sally so that letters of administration of the Estate should be granted to them jointly.

5.  I also made an order nisi that Susan should pay Sally the costs of her claim while Sally should pay Susan the costs of her counterclaim and that both sets of costs should be taxed on a party and party basis if not agreed.

6.  By a summons dated 9 February 2018, Susan applies to vary my said costs order nisi as follows:

(1)  that Sally should pay Susan’s costs in relation to Sally’s claim up to and including 15 April 2016 on a party and party basis;

(2)  that Sally should pay Susan’s costs of Sally’s claim after 15 April 2016 on an indemnity basis;

(3)  that Susan should pay Sally’s costs in relation to Susan’s counterclaim up to and including 15 April 2016 on a party and party basis;

(4)  that there be no order in relation to the costs of Susan’s counterclaim after 15 April 2016.

7.  Alternatively, Susan invites the court to vary the said costs order nisi in such other manner as appropriate after considering the litigation conduct of the parties.

8.  At the hearing earlier today, with regard to the costs up to and including 15 April 2016, I questioned Mr Chow (1) why Sally should pay Susan’s costs in relation to Sally’s claim (that Sally is entitled to administer and inherit the Estate as a daughter of the Deceased) which Susan conceded on the first day of trial and (2) why Susan should pay Sally’s costs in relation to Susan’s counterclaim (that Susan is entitled to administer and inherit the Estate as a daughter of the Deceased) which succeeded after trial. 

9.  Upon reflection, Mr Chow has indicated acceptance that each party should pay the other party’s claim or counterclaim (as the case may) up to and including 15 April 2016 on a party and party basis, to be taxed if not agreed.

10.  That leaves only the costs after 15 April 2016. 

11.  After hearing the parties and considering the evidence adduced by the Affirmation made by Mr Jackson Ho, solicitor for Susan, on 9 February 2018, I have come to the view that Sally should bear Susan’s costs, not only in relation to Susan’s successful counterclaim, but also regarding Sally’s claim, after 15 April 2016.

12.  In particular, I have taken into account the following “without prejudice save as to costs” written offer of settlement made by Susan to Sally (“Offer”) on 7 April 2016 for Sally’s acceptance on or before 15 April 2016:[i]

(1)  that Sally and Susan should have equal shares in the Estate;

(2)  that Sally and Susan should jointly apply for letters of administration of the Estate;

(3)  that Sally should withdraw her claim against Susan;

(4)  that Susan should withdraw her counterclaim against Sally;

(5)  that Susan should withdraw the Appearance to Warning filed on 18 July 2012;

(6)  that Sally should withdraw her application for letters of administration of the Estate; and

(7)  that each party should bear her own costs of the action.

13.  What Susan proposed in paragraphs 1 and 2 of the Offer were exactly what I found after Susan’s concession and after trial.  As for costs, taking a broad brush approach, after setting off the costs that each of Sally and Susan would have had to pay to the other under the costs order nisi that I made, I suspect each party would have ended up in a costs position that would have been more or less like paying her own costs.

14.  Sally did not accept the Offer (or make any counter proposal), obviously because she did not wish to concede Susan’s equal claim to the Estate.  She acknowledges that she has not attained a more advantageous position by not accepting the Offer and by going to trial.  In other words, the costs incurred by both parties after 15 April 2016 were thrown away for a result which could and would have been achieved by Sally’s acceptance of the Offer on or before 15 April 2016.

15.  Mr Chow fairly accepts that the Offer did not comply with the requirement in Order 22 rule 5(7), Rules of the High Court (Cap 4A).  That being the case, Susan cannot pray in aid the provisions as to costs and other consequences in Order 22, rule 23.

16.  Nevertheless, the Offer was a valid traditional Calderbank offer that Sally did not beat at trial.  I see no reason why Sally should not bear the costs thrown away by her refusal to settle on the terms of the Offer.

17.  I further take the view that such costs should be taxed on an indemnity basis. 

18.  As said earlier, Susan did not make the Offer in the form and terms required of a sanctioned offer so as to automatically attract the costs and other consequences provided for in Order 22 rule 23 (one of which is that the payment of the offeror’s costs by the offeree after the latest date on which the sanctioned offer could have been accepted without leave of the court on an indemnity basis).  That being the case, taxation of the costs incurred after 15 April 2016 on an indemnity basis must otherwise be appropriate before I could order the same. 

19.  Where the proceedings in question should never have been brought or defended but the party nevertheless unreasonably and unjustifiably persisted, he may well be visited with indemnity costs.  See Huge Dragon Corp Ltd v Lung Mun Oasis (IO) [2014] 3 HKLRD 286, per Jeremy Poon J (as he then was) at [13] and the cases cited therein.  This is such a case.  It would be apparent from the Judgment that I consider Sally’s denial of Susan’s claim to the Estate (which should be understood to be a claim to share in the administration and distribution of the Estate after Susan’s indication of acceptance of Sally’s joint claim in the Offer) to be utterly devoid of merits and should not have been persisted in.

20.  For the sake of completeness, my attention has also been drawn to Sally’s repeated refusals to attempt mediation in 2013 and 2016 on the apparent ground that the parties resided in different jurisdictions (Sally in United Kingdom and Susan in Australia).  Given the steadfastly hostile attitude displayed by Sally towards Susan and her counterclaim, I seriously doubt whether mediation, even if attempted, would have been fruitful.  More importantly, I do not see this as a point separate from Sally’s denial of Susan’s counterclaim on unmeritorious grounds.

21.  For these reasons, I hereby vary the costs order nisi made in paragraph 53 of the Judgment as follows:

(1)  Susan should pay Sally the costs of her claim up to and including 15 April 2016 on a party and party basis;

(2)  Sally should pay Susan’s costs of defending Sally’s claim after 15 April 2016 on an indemnity basis; and

(3)  Sally should pay Susan the costs of her counterclaim on a party and party basis up to and including 15 April 2016 and thereafter on an indemnity basis.