CHAO YUE WAH v. MO & CO (HONG KONG) LTD AND OTHERS

HCA 2326/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2326 OF 2001

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REASONS FOR DECISION

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1. On 25 May 2001, the Plaintiff instituted the present Action by a Writ of Summons endorsed with a Statement of Claim. The 1st Defendant is a company incorporated in Hong Kong ("the Company"), having an issued share capital divided into 3,000 shares in total. The 2nd and 3rd Defendants are liquidators of the Company (the chanellenge to whose appointment is not relevant for the present purpose). The 4th Defendant is a shareholder and one of the Company's directors. Also feature prominently in the Statement of Claim is one Lig Shing Zee ("Zee") who had died on 3 November 1998.

2. According to the Statement of Claim, the Plaintiff brought the present action in two capacities. She claimed, first, as the beneficial owner of 900 shares in the Company which, according to her, were sold by Zee to her in about 1991. Despite her claim to ownership of the 900 shares, the Plaintiff was not registered as a shareholder of the Company. As will be apparent later in this judgment, the failure or refusal of the Company to register the Plaintiff is one of the main disputes in this Action. In addition, the Plaintiff also claimed in her capacity as the executrix of the estate of Zee ("the Estate").

The Statement of Claim & the Application to Strike Out

3. A great many details were pleaded in the Statement of Claim. The reliefs sought in the Prayer were extensive, consisting of no fewer than 21 paragraphs of substantive reliefs against the Company. Unfortunately, it is not always easy to distill the causes of action relied upon among the pleaded details. Even giving due allowance, the exact basis upon which some of the reliefs are sought remains obscure.

4. It appears that the Plaintiff's claim against the Company can be identified broadly as follows. First, the validity of the resolutions passed at an extraordinary general meeting held on 31 March 1987 regarding the appointment of new directors were challenged on the ground that Zee had not been given due notice of the meeting. Second, a claim was made against the Company for failing to pay dividend since about 1987. Third, a claim was made for wrongful denial since about 1987 of Zee's, and since his death, the Plaintiff's right to inspect the books and accounts of the Company. Fourth, various reliefs were sought in connection with the Company's failure or refusal to register the Plaintiff as a shareholder of the 900 shares. Fifth, reliefs were sought in connection with an agreement allegedly made in June 1992 between Zee and other shareholders whereby, so it was claimed, all but one of the other shareholders had agreed to transfer their shares in the Company to Zee. Sixth, the Company's decision in 1993 to sell two warehouses (which allegedly were purchased by Zee for the Company in 1968) was challenged on the ground that no meeting had been convened for that purpose. Seventh, the Company's decision to cease business in 1993 was challenged on the ground of want of a shareholders' meeting for that purpose, and in this connection, a claim for damages was made for inducing a breach of an agreement under which the Company, so it was claimed, would have been entitled to payment of commission had it not ceased business. Eighth, the validity of the resolutions passed at an extraordinary general meeting on 25 April 2001 to voluntarily wind up the Company was challenged.

5. The Company took out the present application to strike out the Statement of Claim. By the same application, the Company also sought to have the Action against it dismissed or stayed. The 2nd to 4th Defendants were not involved in the application.

6. The strike out application was taken out on 9 November 2002. Despite the directions given by the Registrar for the filing of evidence, no evidence was adduced by the Plaintiff. On the first day of the hearing before me, an application was made by her counsel, Mr Yeung (who was not involved in the drafting of the Statement of Claim) for an adjournment to enable her to file evidence. The application was refused. As time had been taken up by arguments on adjournment, the hearing of the substantive application was not completed within the day allotted for it. In the course of Mr Yeung's submissions on the second day, in response to a query from the Court, it transpired that Mr Yeung did not in fact wish to defend the Statement of Claim as it then stood. Despite his indication how he would like the Statement of Claim to be amended, no draft amendment was produced for consideration at that stage. A draft of the proposed amendment was finally produced at the third day of the hearing whereby the original Statement of Claim was completely abandoned. In its place was substituted the proposed Amended Statement of Claim, which itself was further revised in the course of Mr Yeung's submissions.

7. Mr Pow for the Company argued that the present Action, insofar as it related to the Company, was not salvaged even by the re-formulated amendments. It is this re-formulated version which I will have to consider in this application.

The Proposed Amended Statement of Claim

8. Only two causes of action remain in the proposed (reformulated) Amended Statement of Claim. The first (which I will call "the first claim") relates to two properties which, until their sale in 1993, were held in the name of the Company and had been used as the Company warehouse ("the Properties"). It is alleged that the purchase moneys were provided by Zee in 1968 and the Properties were held on trust for Zee. The Plaintiff claims, inter alia, a declaration that the sale proceeds were held on trust for the Estate and for an account of such proceeds as well as any moneys coming to the hands of the Company in respect of such sale. The second cause of action (which I will call "the second claim") relates to the Company's refusal to register the Plaintiff as holder of the 900 shares. It is alleged that despite notification to the Company in December 1991 of the sale of the 900 shares by Zee to her, the Company had failed to register the Plaintiff as a shareholder. It was not until 23 July 1997 that the directors had resolved not to register the Plaintiff as holder of those shares and Zee was only notified of the same on 25 July 1997. The Plaintiff claimed that the Company was in breach of section 69 of the Companies Ordinance and sought, inter alia, a declaration that she was the beneficial owner of the 900 shares and an order that the Company be directed to register the transfer of those shares.

9. The Plaintiff seeks to bring the first claim in her capacity as the executrix as well as the sole beneficiary of the Estate; and the second claim in her capacity as the legal and beneficial owner of the 900 shares in the Company.

The First Claim

10. According to the proposed Amended Statement of Claim, Zee left a will ("the Will") appointing the Plaintiff as executrix. By the Will, Zee bequeathed to the Plaintiff all his property, real and personal, tangible and intangible of all kinds and wherever situated. It appears from the evidence that the Plaintiff had made an application before the Courts of the State of New York for probate of the Will. The application was contested by one Lung Hsu who, claiming to be the natural son of Zee, was applying in the same court for administration of the Estate. The grounds of the dispute in the New York probate proceedings are not relevant for the purpose of the present application and I do not propose to set them out in detail. What is material, however, is that on 8 May 2001 the Surrogate's Court in New York considered it necessary to appoint an administrator of Zee's estate pending resolution of the probate proceedings and for that purpose an order was made for the Letters of Temporary Administration to be issued to the Public Administrator.

11. A Certificate signed by the Clerk of the Surrogate's Court is in the following terms:

"Know Ye, that we, having inspected the records of our Surrogate's Court in and for the County of New York, do find that on June 15, 2001 by the said Court, LETTERS OF TEMPORARY ADMINISTRATION on the goods, chattels, and credits of Lig-Shing Zee, deceased, late of the County of New York were granted unto Public Administrator of NY Co. and that it does not appear by the said records that letters have been revoked."

12. In challenging the Plaintiff's locus to bring the first claim in her capacity as executrix, Mr Pow did not argue against the established principle that an executrix derives her authority, including authority to commence proceedings, from the will and not from the grant of probate. Mr Pow, however, argued that as from the appointment of the Public Administrator on 8 May 2001, the executrix had been divested of the authority to commence proceedings. Hence, as of the time the Writ was issued in the present Action (that is, 25 May 2001) the Plaintiff lacked the locus standi to bring these proceedings. Mr Pow further submitted that even if the appointment were only to take effect from the sealing of the Letters of Administration (that is, 15 June 2001) and hence there was a window of opportunity for the Plaintiff to commence the present proceedings in the capacity as executrix, the present claim of a trust of the sale proceeds of the two Properties did not appear in the original Statement of Claim and is therefore a new claim in the present Action. Thus, so argued Mr Pow, the question of the Plaintiff's authority should be considered not with reference to 25 May 2001 but rather May 2003 when this new claim was made for the first time in the proposed Amended Statement of Claim. By May 2003, the Plaintiff could not have the authority to bring proceedings when the administration of Zee's estate had been granted to the Public Administrator. Mr Pow further pointed out that the Company and the liquidators had, through correspondence by solicitors, already indicated to the Plaintiff that they would be prepared to account to the Public Administrator but not the Plaintiff. In support of his argument, Mr Pow relied on section 42 of the Probate and Administration Ordinance which provides:

"Where administration has been granted in respect of any estate of a deceased person, no person shall have power to bring any action, or otherwise to act as executor of the deceased person in respect of the estate comprised in or affected by the grant, until the grant has been recalled or revoked."

13. The question as to when exactly the appointment of the Public Administrator is made or takes effect is a matter of some uncertainty on the evidence before me. As of 25 May 2001 when the Writ was issued herein, there was in existence a decision of the appointment by the New York Surrogate's Court which was stated to "constitute the order of the court". However, according to the Certificate aforementioned, it appears that the Letters of Temporary Administration was not actually granted until 15 June 2001. As no evidence on the law of New York has been filed, I am unable to accept Mr Pow's first argument which would have required me to form a view (which I am unable to do) that the appointment of the Public Administrator should take effect from the order of the court rather than the actual sealing of the Letters of Administration.

14. As for Mr Pow's alternative argument, I am prepared to accept that the cause of action based on a trust of the proceeds of the sale of the two Properties did not hitherto appear in the Statement of Claim. Insofar as the Plaintiff is now pleading a trust of the proceeds in the proposed Amended Statement of Claim on the basis of "an agreement" or some "common intention" between Zee and the Company (see paragraph 6), such allegation is clearly new. Insofar as the plea is one of a trust imposed by law arising from the provision of the purchase money by Zee, such plea appears to be a departure from the previous allegation that the two Properties were purchased by Zee "for the 1st Defendant" (emphasis added) (paragraph 6 of the original Statement of Claim). Such view, I think, is reinforced by the absence of any averment of a trust in paragraph 30 of the original Statement of Claim where, instead of any reference to a trust, the allegation was to the effect that the sale of the Properties had been carried out wrongfully without the sanction or authority of a properly constituted shareholders' meeting. The reference to the absence of authority of a shareholders' meeting, if anything, suggests that the Company was free to deal with the Properties in its own right. On a fair reading of the original Statement of Claim taken as a whole, one would not have understood that the Plaintiff was asserting a trust over the Properties or the proceeds. In this connection, I have not overlooked paragraph (19) of the Prayer which claimed a declaration of a "constructive trust" in respect of "all assets now/previously in the Defendant's possession". In my view, paragraph (19) adds nothing to the Statement of Claim. Quite apart from the fact that the prayer for relief is not part of the pleaded cause of action, insofar as paragraph (19) was intended to be a free-standing plea it lacked the material averment necessary to disclose a complete cause of action; and insofar as it was intended to be a conclusion drawn on the averments in paragraphs 6 and 30 such conclusion does not follow from the averments given my view (already stated above) on how paragraphs 6 and 30 would be understood.

15. Having said that, however, I am not convinced that Mr Pow's alternative argument is correct. Quite apart from the question whether the added cause of action should relate back to the time when the Writ was issued, the more fundamental question is the scope of application of section 42 of the Probate and Administration Ordinance.

16. The general principle, subject to limited exceptions, is that a grant of representation to represent a deceased person under the law of a foreign country has no operation in Hong Kong. No person will be recognized by the Hong Kong courts as personal representative of the deceased unless and until he has obtained a grant of probate or letters of administration in Hong Kong. A foreign representative cannot sue in Hong Kong in his capacity as such: see Dicey and Morris, The Conflict of Laws, 13th ed., pp. 1018-9; Williams, Mortimer and Sunnucks, Executors, Administrators and Probate, 18th ed., para. 1-31. Applying the general principle, in order for the Public Administrator to deal with Zee's assets in Hong Kong or take action in Hong Kong to recover such assets, he would have to obtain a grant of administration issuing out of the Hong Kong courts.

17. The above principle is, in my view, relevant to the determination of the scope of application of section 42. Mr Pow's contention would have the effect of asking the Hong Kong courts to give the same effect in this jurisdiction to a foreign grant as if it were granted by the courts of Hong Kong. In the absence of express language or any compelling reason, I do not think it is right to construe section 42 in such a way as to effect a fundamental change to the established principle. In my view, the phrase "where administration has been granted" in section 42 must be a reference to a grant of administration under the jurisdiction of the Hong Kong courts under section 3 of the Ordinance.

18. I seek fortification in the view I have expressed above by reference to the definition of "grant" in the Ordinance - which is defined to mean "a grant of probate or administration". "Probate" is further defined to mean "a grant under the seal of the court ......" and "court" is defined to mean the High Court. It is therefore clear that references to a "grant" in the Ordinance, insofar as they are references to a grant of probate, must be referring to probate granted by the Hong Kong courts and not foreign courts. I do not see any compelling reason in the context of the Ordinance to differentiate between a grant of probate on the one hand and grant of administration on the other by confining the former to a grant by the courts of Hong Kong while ascribing to the latter a wider meaning to include a foreign grant. In my view references to grant of administration should be construed as a grant of administration by the courts of Hong Kong. I therefore conclude that section 42 does not preclude the Plaintiff from issuing proceedings in Hong Kong in her capacity as executrix to seek a declaration and an account of the sale proceeds by reason only that a grant of temporary administration of the personal estate of Zee had been made in New York in favour of the Public Administrator.

19. Mr Pow advanced yet another argument in this connection. While he did not argue against the established principle that an executrix may commence an action before probate, he relied on the equally well established principle that before probate the executrix could not maintain the action but only continue the same up to the point where production of the probate became necessary. In the present case, there is evidence (undisputed by the Plaintiff) that her application for probate before the courts in New York is contested. In the absence of any evidence to the contrary, I must proceed on the basis that those proceedings have not been resolved and the Plaintiff has not obtained probate either in New York or in Hong Kong. In these circumstances, however, the correct approach is not to strike out the action for want of locus on the part of the plaintiff, but stay the proceedings until probate has been taken out and a reasonable time has elapsed after it has been submitted to the defendant for inspection: see William, Mortimer and Sunnucks, (ibid.) para. 8-07 at p.92; Webb v. Adkins (1854) 14 C.B. 401; Tarn v. Commercial Bank of Sydney (1884) 12 Q.B.D. 294.

20. In this connection, I wish also to refer to an argument which Mr Pow advanced in connection with paragraph (6) of the Prayer of the original Statement of Claim. Paragraph (6) in terms sought a declaration in relation to the 900 shares on the basis that "the Plaintiff is entitled to exercise all the powers of an executrix who have the only will of Zee .....". In seeking to strike out this paragraph, one of Mr Pow's arguments was that given the pending contested proceedings for probate in New York, it was frivolous, vexatious and an abuse of process for the Plaintiff to institute "parallel proceedings" in Hong Kong relying on her capacity as executrix. Paragraph (6) is not repeated in the proposed amendment and it is therefore not clear whether Mr Pow is still maintaining the argument. In any event, it appears to me that the analogy with "parallel proceedings" is inapt. First, in the present Action the Plaintiff asserts her capacity as the executrix under the Will. Although her application for probate in New York is being contested, the same issue has not yet arisen in Hong Kong. I do not preclude the possibility of the Hong Kong courts having to visit the question of parallel proceedings if she were to apply for probate in Hong Kong. But at present, I am content to base my decision on the fact that it is premature to say that the same issues involving the same parties will necessarily be litigated in parallel in different jurisdictions. Secondly, although the general principle is that where the deceased dies domiciled in a foreign country, as a matter of comity the courts of this jurisdiction will in general make a grant to the personal representative who has been entrusted with the administration of the estate by the court of such foreign country, the fact that the application for a grant is contested in a foreign jurisdiction would not necessarily render a similar application, if made within this jurisdiction in respect of property situated here, frivolous, vexatious or an abuse of the process: William, Mortimer and Sunnucks, (supra) para. 1-26 at pp.14-15; Duprez v. Veret (1868) 1 P. & D. 583. In short, my view is that the argument based on "parallel proceedings" does not assist the Company in having this part of the Plaintiff's claim struck out.

21. I will now turn to the Plaintiff's reliance on her capacity as the sole beneficiary of the Estate. It is well established that in an unadministered estate, save the specific legatees with respect to the specific bequest or devise, no beneficiary can assert that he has any legal or equitable interest in any of the assets comprised in the estate. The beneficiary's interest is limited to that of ensuring due administration of assets by the personal representative. The same applies even in the case of a sole beneficiary of the estate. In Ip Cheung-kwok (appointed to represent the estate of Ip Koo-chi, deceased) v. Sin Hua Bank Trustee Ltd. [1990] 1 HKLR 497 at 509 Clough JA said:

"Thus in a wide or popular sense the plaintiff (assuming his claim to be the sole beneficiary to the unadministered estate of the settlor to be established) may be said to have an interest in the assets comprising that estate, but that interest is protected, not by conferring upon him any legal or beneficial interest but a chose in action enabling him to obtain the protection of the court to ensure the due administration of the estate by the settlor's personal representatives." (emphasis added)

22. Such limited interest of the beneficiary is insufficient to enable him, in his personal capacity without having the personal representative before the court either directly or by representation, to claim declaratory relief relating to properties of the estate. Clough JA in Ip Cheung-kwok's case (supra) put the matter as a jurisdictional principle (in the wider sense) when he said at p. 511F-G:

"On the footing that the court was competent to grant the plaintiff declaratory relief regarding the nature of the relevant trusts, the real question, in my judgment, is the wider jurisdictional one, namely could the court in the proper exercise of its jurisdiction grant the plaintiff the declaratory relief he sought when the personal representative of the settlor was not before the court directly or by representation. In my judgment the answer must be in the negative."

The learned judge went on to hold at p. 514H-I:

"Accordingly I conclude that if the proceedings had continued without joining the settlor's personal representative or the joinder of a suitable party to represent the settlor's estate the judge should have struck out the plaintiff's original action if ...... the plaintiff had insisted on continuing without applying for a representation order in respect of the settlor's estate or a stay to enable him to apply for a limited grant. The plaintiff cannot therefore succeed on the 'sufficient interest' point alone."

23. It is true that the Plaintiff brings this Action not only as a beneficiary but also as the executrix and therefore, unlike the situation in Ip Cheung-kwok's case, her claim is not liable to be struck out for want of a personal representative before the court. However, given that the rationale of the principle in Ip Cheung-kwok's case is to avoid the possibility of multiplicity of proceedings or embarrassment to the personal representative as and when he is duly constituted (as to which see p. 511G-H of Clough JA's judgment), such possibility is not removed or minimized unless the court is satisfied that the person who purports to act as the personal representative is indeed properly constituted and hence in a position to bind the estate. In the circumstances of the present case, given the absence of proof of a grant and the uncertainty regarding the personal representative (hence my view that the Action should not be continued until production of probate by the Plaintiff), it must follow that these proceedings cannot be allowed to continue in her capacity as the sole beneficiary either.

Second Claim

24. I will set out the relevant parts of the proposed Amended Statement of Claim (as reformulated) in relation to the second claim:

10. In December 1991, Zee notified the 1st Defendant and its board of directors of the transfer of the 900 Shares to the Plaintiff. In the said notification, Zee also requested the 1st Defendant to

a) Register the Plaintiff as the shareholder of the 900 Shares; and

b) Issue new share certificates in favour of the Plaintiff.

11. Wrongfully, the 1st Defendant only notified Zee, on or about 25 July 1997, that its Board of Directors had only on or about 23 July 1997 resolved not to register the said transfer of 900 Shares.

12. Despite repeated requests and demands, the 1st Defendant failed and still fails to register the Plaintiff's interest in the 900 Shares in its register in the name of the Plaintiff.

13. In the premises, the 1st Defendant was in breach of section 69 of the Companies Ordinance (Cap 32) and the Plaintiff is entitled to have the transfer of 900 shares registered by the 1st Defendant.

25. Article 9 of the Company's Memorandum and Articles gives the directors discretion to refuse to register the transfer of any shares to a person of whom the directors do not approve. With respect to the exercise of such power, section 69(1) of the Companies Ordinance provides:

"If a company refuses to register a transfer of any shares ......, the company shall, within 2 months after the date on which the transfer was lodged with the company, send to the transferor and the transferee notice of the refusal."

26. Mr Yeung referred me to the case of Re Swaledale Cleaners Ltd. [1968] 1 WLR 1710. He submitted that the proposed amendment was based on the argument that the power of refusal conferred on the directors must be exercised within a reasonable time, and in this case a reasonable time (applying section 69 by analogy, a period of two months) having expired, the right of refusal was lost and the transfer could no longer be rejected.

27. My first observation is that Mr Yeung's argument differs from what is actually pleaded in the proposed amendment. Under paragraph 13 of the proposed amendment, the two-month period in section 69 is not merely referred to by way of analogy for determining what constitutes a reasonable time in the circumstances. "Breach of section 69 of the Companies Ordinance" is pleaded as a cause of action forming the very basis of depriving the Company of its right to reject the transfer. In any event, as pointed out by Mr Pow, the two-month period prescribed in section 69 only begins to run from "the date on which the transfer was lodged with the company". Reading it together with section 66 (which prohibits the Company from registering a transfer unless a proper instrument of transfer has been delivered to it), it is clear that delivery of the instrument of transfer is a precondition before the two-month period is set to run against the Company. In the proposed amendment, however, all that was pleaded in paragraph 10 was that the alleged transfer was "notified" to the Company in December 1991. There was no allegation that any instrument of transfer had been lodged with the Company or when delivery of such documents had occurred so as to trigger the running of the two-month period under section 69 or, for that matter, any other period that might be considered reasonable in the circumstances. Indeed, according to Mr Pang Chi Kwong, the manager of the Company at the relevant time in 1991 (the reference to whose evidence was not objected to by Mr Yeung even though it was only tendered at the hearing), no instrument of transfer or any bought and sold note accompanied Zee's letter of notification of the transfer.

28. Accordingly, I accept Mr Pow's submission that an essential element is lacking in the Plaintiff's pleaded case and that any cause of action based on a breach of section 69 is not properly constituted. On this ground alone I would refuse to allow, as against the Company, the proposed amendment as set out in paragraphs 8 to 13 of the reformulated Amended Statement of Claim as well as paragraph 2 of the Prayer. I would also disallow amendment in terms of paragraph 1 of the Prayer for a the declaration of beneficial ownership of the 900 shares insofar as the same is sought against the Company by reason that the Company is not obliged to take notice of any trust pertaining to those shares.

29. Even if I am wrong, according to the evidence referred to in the 2nd Affirmation of Liang Pui Saw Kian (the admission of which Mr Yeung had similarly indicated no objection), the board's resolution on 23 July 1997 to refuse registration of the transfer was passed in response to a request made by Zee in 1997 and not to that made in 1991 (as pleaded in paragraph 10 in the proposed amendment). In light of such evidence (which was not contradicted, and as to which I see no reason not to accept), the Plaintiff's pleaded case alleging that the Company has, by July 1997, lost its right to reject a request for registration made in December 1991, is clearly unsustainable. For this reason also, I would not allow the amendment sought in respect of the second claim.

30. In the light of my views above, it is unnecessary for me to deal with Mr Pow's other submissions on the evidence to the effect that the Company had indeed made a decision to reject registration by February 1992 within 2 months of Zee's notification of the transfer. I propose to say no more on such evidence.

31. Finally, before I leave the subject, I would just like to mention Mr Pow's reference to a recent letter from the Plaintiff's solicitors dated 2 May 2003 which contains the following statement:

"Our client has agreed to send to us the original stamped Instrument of Transfer and Bought Note and Sold Note. We shall produce same for your inspection immediately upon receipt."

32. I was asked to construe the letter as an admission that the relevant instrument of transfer and bought and sold note are still in the Plaintiff's possession. While that may be an obvious inference one draws from the letter, it is not determinative of the question whether the relevant documents were delivered to the Company at the time when notification of the transfer was given or whether they had been delivered and then returned to Zee or the Plaintiff. I do not think the statement in the letter assists my determination of the issue one way or the other.

Conclusions

33. As I have mentioned earlier, Mr Yeung indicated that he would not defend the original Statement of Claim and, as evidenced by the proposed amendment, it was completely abandoned. Subject to working out the exact terms of the order (which I will mention in the next paragraph), I would order that the Statement of Claim dated 25 May 2001 be struck out.

34. As for the proposed amendment to the Statement of Claim (as further reformulated), as already indicated I will disallow paragraphs 8 to 13 as well as paragraphs 1 and 2 of the Prayer. In respect of the first claim, the Action should be stayed as against the Company until a reasonable time after production by the Plaintiff of probate of Zee's Will. In the event of the Plaintiff obtaining probate, she should be at liberty to apply to lift the stay. However, there is a complication in that the 2nd to 4th Defendants have not been parties to the present application. As the abandonment of the Statement of Claim, and my decision to stay the Action against the Company will likely concern also the 2nd to 4th Defendants, I would direct the Plaintiff to serve a copy of the proposed (re-formulated) Amended Statement of Claim together with this Decision on the solicitors for the 2nd and 3rd Defendants. As I understand that the 4th Defendant is represented by the same solicitors acting for the Company, it would be unnecessary to direct service on them. I would further direct that unless there is agreement among all parties, a hearing should be fixed so that all parties can make representation to me as to the terms of the order to be made herein.

35. As to costs of the strike out application, as the Company has substantially succeeded, I would order that the costs of the application be paid by the Plaintiff to the 1st Defendant, to be taxed forthwith if not agreed. Having regard to the fact that the first two days of hearing had been wasted as a result of Mr Yeung's rather belated indication that he would not defend the original Statement of Claim, and further that the proposed Amended Statement of Claim did not become available until the third day of the hearing, I am of the view that a higher award of costs is justified to mark the court's disapproval of the way the application has been conducted by the Plaintiff. I would therefore order that the costs mentioned in this paragraph be taxed on a common fund basis. The aforesaid costs order as well as the basis thereof is, of course, an order nisi.

36. Separately, I will make an order that the costs of and occasioned by the Plaintiff's application for adjournment be paid by the Plaintiff to the 1st Defendant, to be taxed forthwith (on a party-to-party basis) if not agreed.

37. Finally, Mr Pow reminded me of my jurisdiction to order the costs of the strike out application to be paid by the solicitors under O. 62, r. 8. I do not understand him to be invoking the jurisdiction as an application on behalf of the Company. I do not consider it necessary for me to deal with this at length. Suffice for me to say that after due consideration, I am not prepared to make any order against the Plaintiff's solicitors.