THE ESTATE OF LEE (OR LI) SING HON ALIAS LEE (OR LI) SING HON DECEASED v. THE LUK HOI TONG CO LTD AND ANOTHER

HCA 1348/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1348 OF 2000

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J U D G M E N T

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1.  I do not blame Mr Cheng of C L Chow & Macksion Chan who appears for the 2^nd defendant in the present application.  He, so far as I can see, did not personally handle the case on behalf of his firm, for the 2^nd defendant. 

2.  The case has been a long drawn out one and involved complicated issues.  I gave judgment in favour of the estate of Lee Sing-hon as plaintiff against both defendants on 16 September 2005.  Originally, the estate was represented by its administrator, Lee Chaio Shing.  Lee Chaio Shing was also a beneficiary of the estate.  Unfortunately, after trial but before judgment, Lee Chaio Shing passed away, so for the purpose of handing down the judgment, the Official Administrator was appointed to represent the estate of Lee Sing-hon.  In the judgment, I indicated that judgments would be entered for the estate of Lee Sing-hon against the two defendants on terms to be finalised.  As the Official Administrator’s appointment to represent the estate was limited to the taking of judgment only, after the handing down of the judgment, there has been a long period of delay because the question of representation of the estate of Lee Sing-hon had to be sorted out.

3.  Patience eventually ran out on the part of the 1^st defendant which had taken no active part in contesting the proceedings.  It was more in the position of a stakeholder of the subject shares and dividends, save as to several items of dispute.  It took out an application for the finalisation of the judgment against itself, which I heard some time ago. 

4.  At that hearing, it turned out that the question of representation of the estate was a complicated one.  I indicated to the parties the possibility of somebody applying to represent the estate, limited to the finalisation of the judgments only.  That suggestion was picked up by Madam Lee Jin-ten, the executrix of Lee Chaio Shing, the former administrator of the estate of Lee Sing-hon.  Madam Lee is the executrix named in the last will of Lee Chaio Shing.  She now applies by summons for leave to carry on the action, limited for the purposes of finalising the judgments against the two defendants and dealing with all outstanding matters in the action, including taxation of costs, and to carry on the taxation proceedings relating to CACV 376/2003, which arose from an interlocutory appeal from the present action.

5.  The 1^st defendant takes a neutral stance relating to the application and does not take part at today’s hearing.  That is a fairly sensible position to take.  Unfortunately, not so for the 2^nd defendant, ie Mrs Lee Wong Siu-tsing, a losing party to the action.  She, or more correctly, her late husband, like Lee Chaio Shing, was a beneficiary of the estate of Lee Sing-hon.  So to that extent, Mr Cheng, representing Mrs Lee, the 2^nd defendant, must be correct in saying that the 2^nd defendant, or her family, stands in an identical position to the widow of Lee Chaio Shing, ie Madam Lee Jin-ten, or her family, in terms of their beneficial interests in the estate of Lee Sing-hon. 

6.  However, so far as representing the estate of Lee Sing-hon for the purposes of finalising the judgments and other related matters are concerned, the two sides do not stand in the same position.  Quite obviously, the 2^nd defendant stands in a conflicting position of interest to that of the estate of Lee Sing-hon because, after all, the present action concerns the claim by the estate of Lee Sing-hon against the 2^nd defendant. 

7.  It is at this point that I am in total disagreement with Mr Cheng when he says that Mrs Lee, or Mrs Lee’s son, Mr Harvey Lee, who is very much on the side of his mother, could be appointed, either alone or jointly with someone else, to represent the estate of Lee Sing-hon for the purpose of finalising the judgments against the two defendants.  With all due respect to Mr Cheng and giving due allowance to the fact that he did not handle the case personally in the past, that is quite an outrageous suggestion to make. 

8.  The suggestion of appointing somebody like the Official Solicitor to represent the estate is again unrealistic and not cost effective, given that one is only talking about representing the estate for the purposes of finalising the judgments and other related matters.  One is not here concerned with general administration of the estate, in which case, for reasons explained in the judgment, the family members of Lee Chaio Shing might not be suitable candidates for the job.  As I say, one is only concerned with finalising the judgments in favour of the estate against the two defendants and other related matters.  I do not see why the Official Solicitor, or, indeed, any third party should be dragged in together with its costs implications to represent the estate for such limited purposes. 

9.  So far as I can see, the estate of Lee Chaio Shing and the estate of Lee Sing-hon have an identity of interest in the outstanding matters, because the former estate is a beneficiary in the latter estate.  As I say, the other beneficiary of the estate of Lee Sing-hon is, for all practical purposes, represented by or equivalent to the 2^nd defendant or her family and, for that reason, she or her family is wholly unsuitable to represent the estate of Lee Sing-hon.

10.  In those circumstances, I do not see why Madam Lee Jin-ten cannot be appointed to represent the estate of Lee Sing-hon.  After all, her late husband had represented the estate to sue the two defendants and the action had been successful.  With all due respect, I think the objection of Mr Cheng raised on behalf of the 2^nd defendant is nothing but a tactic to delay the matter further.  That will have to be reflected in the costs order to be made either against the 2^nd defendant or her firm.  I will come to that later after hearing further submissions.

11.  So far as jurisdiction is concerned, I am wholly satisfied, given what has been said by the Court of Appeal in Ip Cheung-kwok v Sin Hua Bank Trustee Ltd [1990] 1 HKLR 497, 516-520, 523 & 524 that the Court has jurisdiction to grant a representation order under Order 15 rule 15 in the circumstances of the present case and that Madam Lee Jin-ten is a suitable candidate for the appointment. 

12.  Finally, about the complaint that the 2^nd defendant’s legal representative has not had sufficient time to prepare for arguing the present application, there are two points.  First, regarding the fact that Mr Cheng personally was on leave when the summons was served on his firm on 22 December 2006, I am afraid that is not a reason at all for the 2^nd defendant’s or her lawyers’ inability to make preparation in response to the present application. 

13.  Secondly, about the late filing of the supporting affirmation, I think anybody who had followed this case would have no difficulty in understanding generally the rationale for today’s application by Madam Lee Jin-ten.  In fact, the 2^nd defendant’s representatives, both counsel and solicitor, were present at the last hearing when I made the suggestion that Madam Lee Jin-ten could consider making the application for representation. 

14.  Moreover, at today’s hearing I have, with patience, asked Mr Cheng repeatedly to outline to the Court what sort of evidence or grounds of opposition his client would like to include in the suggested affidavit in opposition that he would like to prepare and file on her behalf, and generally what sort of grounds of opposition she would like to raise in relation to the application.  I have heard what Mr Cheng has told me orally.  I am afraid I find nothing in the proposed evidence or grounds of opposition.  In fact, I have dealt with those grounds in the judgment above.  I am unable to discern anything that would be worth the paper that any such affidavit would be written on.  I am afraid there is nothing in the suggested opposition.

15.  One final point.  There is no question of appointing separate persons to represent the estate of Lee Sing-hon for the purposes of finalising the judgments against the 1^st and 2^nd defendants respectively.  I say this because, at one stage, that seems to have been the suggestion of Mr Cheng which, I am afraid, again was a wholly misconceived one.  So for all these reasons, I am inclined to accede to the application. 

16.  Before making the final order, I will deal with the position regarding taxation of costs arising from CACV 376/2003.  I am afraid I totally fail to understand the opposition of the 2^nd defendant.  I only note that the 2^nd defendant is the paying party under the Court of Appeal’s order for costs which gave rise to the taxation proceedings.  Again, I am afraid I need to make the same observation.  The opposition put forward by Mr Cheng today on behalf of his client is nothing more than a tactic to delay the taxation proceedings, which would, when completed, result in an allocateur requiring the 2^nd defendant to pay the estate its taxed costs.  I see no reason why I should not appoint Madam Lee Jin-ten to carry on with the taxation proceedings.  The sooner the proceedings are concluded and the 2^nd defendant required to make payment of the costs as taxed in favour of the estate, the better.

17.  For all those reasons, I make an order in terms of paragraph 1 of the summons.

[Submissions on costs]

18.  So far as costs are concerned, I make an order in terms of paragraph 2 of the summons, save for the costs of today’s hearing. 

19.  Today’s hearing was wholly unnecessary.  If the 2^nd defendant had taken a more reasonable stance, everything could have been dealt with by consent.  As I noted, the 1^st defendant took a very reasonable position and, as a result, it did not need to attend today’s hearing. 

20.  The 2^nd defendant ought to have taken the same stance. 

21.  I do not see why the 2^nd defendant, as a defendant, should have much say in today’s application which is really an internal matter peculiar to the plaintiff.  As a beneficiary of the estate of Lee Sing-hon, certainly Madam Lee or her family would have a say; however, given her conflicting position vis-à-vis the estate in the action, and having considered (and rejected) the 2^nd defendant’s grounds of opposition, I do not think the estate should be made to pay for her appearance today.  What she has submitted as a beneficiary of the estate was of no use to the estate and was not in its best interest.  I do not see why the estate should pay for those submissions.

22.  So far as today’s hearing is concerned, I give the costs to the plaintiff against the 2^nd defendant, payable forthwith, to be taxed if not agreed.  So I make an order in terms of paragraph 2 of the summons, save that costs of today’s hearing be paid by the 2^nd defendant forthwith to the plaintiff to be taxed if not agreed. 

23.  So far as the basis of taxation is concerned, I would keep to the party and party basis because it is plain to me that the opposition is a tactical move by the 2^nd defendant to delay the matter and she does so in her capacity as a defendant, so I think party and party would be a better basis in the circumstances.

24.  Having heard from Mr Cheng briefly about the position taken by his firm, I am prepared to take Mr Cheng’s word – which I have no reason to doubt – that the stance taken by his firm on behalf of the 2^nd defendant reflects the instructions that his firm has received and the oral advice that it has obtained from counsel.  So on that basis, I do not think there is sufficient justification to make the firm bear the costs of today’s hearing.  I will say no more about the firm’s responsibility.

[Further submissions on costs]

25.  For the avoidance of doubt given the different bases of taxation: any shortfall in costs as regards today’s hearing shall be borne by the estate.